Keeping a Commercial Republic

BY: Micah Meadowcroft  |  Tennessee Watchman 

Let us begin in the Most Serene Republic of Venice. At its head sat the Doge, elected for life by an assembly that was itself produced by lots and votes cast by a lattice of bodies and councils. The commercial city’s constitution was, at its most reduced, a mixed regime made up of monarchic elements in the Doge, an enshrined aristocracy in its senate, along with democratic elements found in the merchant and patrician families of its Great Council. In fact it was far more convoluted than that, with rules written and unwritten and assemblies official and de facto distributing power in networks as winding and murky as the Venetian canals, and like the spongy, swampy earth beneath the palazzos, shifting from year to year. That once mighty and splendid state sank into the waves of history and the rule of Napoleon just as the United States found its footing on solid ground.

And as they set out to defend the transformation of representative delegations into a governing federal system, Alexander Hamilton and James Madison both thought Venice important enough to mention. In Federalist 6, Hamilton took it as a matter of course that the “Most Serene” city was indeed a republic as it styled itself, and used it and the other petty-states of disunited Italy as an analogy for these United States under the Articles of Confederation. That even Venice’s commercial republic “figured more than once in wars of ambition” and that “rivalships and competitions of commerce between commercial nations” often lead to active hostilities prompted Hamilton to state in Federalist 9, “A firm union will be of the utmost moment to the peace and liberty of the States, as a barrier against domestic faction and insurrection,” for the American states were just such commercial rivals ready to rend their confederacy.

While Hamilton saw in Venice and the rest of Italy the tendencies to which the newly independent confederated states were and could be tempted, Madison denied the accuracy of calling Venice a republic at all, referring to it instead as an “elective despotism” in Federalist 48, as opposed to the checked and balanced mixed regime the Constitution proposed. And in Federalist 39 he had emphasized that in a real republic “supreme authority is derived from the people,” and dismissed Venice as a state “where absolute power over the great body of the people is exercised, in the most absolute manner, by a small body of hereditary nobles.” For Madison, while the cities of Italy had been used as illustration of the “vices and defects of the republican” form of government by theorists before him, they were in fact “turbulent democracies” and so not legitimate examples of the natures and limits of truly republican constitutions.

These two differed in their treatment of Venice precisely where they differed in their primary concerns about the strength of the Constitution they defended. While neither of them had gotten in its final draft the fullness of their hopes—Hamilton had notoriously advocated life tenure for presidents and senators—both saw the need for and potential of the document and championed its adoption. For Hamilton, the states required a central government with sufficient energy to harness their economic rivalry for their shared interest and common good. While he only specifically mentioned Venice in light of its status as a commercial republic among many, like any of the soon-to-be United States, nothing else he wrote as Publius could cause one to think Hamilton would object, like Madison, to the form Venetian republicanism took. Indeed, a Doge and councils of mercantile nobility seems strikingly harmonious with the Hamiltonian vision. Madison, meanwhile, was less worried about the strength of the federal system to channel the energies of the states as he was driven by the dream of an extendedrepublic. His dismissal of Venice and the other petty republican cities of history freed him from the shackles of their precedence, so he could set forth his vision of faction checking faction and truly republican institutions uniting all the tensely confederated colonies, and perhaps beyond.

Those men, and this difference in priority as it played out in the political life of our nation’s adolescence, are the subjects of Jay Cost’s new book, The Price of Greatness: Alexander Hamilton, James Madison, and the Creation of American Oligarchy. In Cost’s compelling account, the task those two giants set for themselves and the country was “securing the principles of liberalism, republicanism, and nationalism” in balance. Hamilton plays the part of thesis in this story, wishing to transform “the moneyed class into mediators of the national interest.” Madison, keeping in mind an antithesis found in both the interests of the common man and the agricultural gentry of the Virginia planters—a distinct moneyed class from Hamilton’s financiers and speculators—attempts the synthesis that sought to harness the economic power Hamilton unleashed and distribute its benefits as widely as possible. Cost sums up this tug-of-war as a program of “national vigor” opposed by “republican balance.” In a work of generously editorialized history like this, the political theory is stuck in at the margins as Cost traces his paradigm both chronologically and thematically from the Constitutional convention to the national banks and nullification crisis, and even up through to the Progressives.

Hamilton and Madison shared “a commitment to a liberal government, which emphasized the protection of individual rights.” As to what that looked like, and to what ends those individual rights ought be oriented, they often parted ways, usually along these nationalist or republican lines. Reading Madison’s preparations for the Constitutional convention, Cost reminds us of the diffusive and mechanical nature of the Madisonian idea, for the fourth president “argued that the great desideratum in government was to make it ‘sufficiently neutral’ toward all parts of society that it could prevent one part of the nation ‘from invading the rights of another,’ without becoming an interest of its own, ‘adverse to that of the whole society.’” Hamilton, on the other hand, saw a need for personality and decision, even choice, in protecting the interests of citizens. Hamilton, Cost writes, “thought government should function more like a head coach. Just as a coach starts some players and benches others to maximize the team’s chance of victory, Hamilton intended to favor some factions over others based on their usefulness to the national good,” and specifically hoped to “incentivize the wealthy to create a sound currency and diversified economy, which would be good for everybody.” Madison thought the right engineering could guarantee broad self-government and a fair playing field. Hamilton saw the chance to turn liberalism’s self-interest into public goods.

Cost has written an engrossing and useful book in The Price of Greatness, for it both provides an accessible (short) history of this country’s beginnings and illustrates dynamics fundamental to the American model. Christ said the “poor you will always have with you,” but Hamilton said we will always have the rich, and so we’d better make use of them. He was naive about that, as time and Madison and Cost would tell, but it is certainly an idea with staying power in the American psyche. The conflict between Hamilton and Madison “illustrates a paradox at the heart of the American constitutional order. Our Constitution simultaneously promotes the notions of liberalism, republicanism, and nationalism….yet the sorts of policies that strengthen our national fiber can also diminish the republican character of our government, most often in ways that redound to the benefit of the wealthy.” But if there’s an obvious oversight to the work, it lies in its comprehensiveness or nuance as history, for, while the paradigm Cost shows us is deeply ingrained in Hamilton and Madison and, through them, the country, in illustrating it not just details but entire structures and builders of 19th century America are flattened: most notably, slavery, Lincoln, and the Civil War. It seems a mistake to argue a Madisonian “fusion” of republican principles with Hamilton’s nationalist engine “had in fact laid the groundwork for the corruption that the Progressives were struggling against” without acknowledging the enormous nation-altering and redefining consequences of the war between the states and Southern reconstruction. American liberty, republicanism, and nationhood cannot be discussed post 1861 without recognizing that Lincoln, as he said in his second inaugural, “accept[ed] war rather than let it perish.”

In Cost’s telling, “The key lesson from the Madison-Hamilton battle is not that one was right and the other was wrong, but that their feud represents a clash of fundamental American values.” And moreover, “Just as a circles cannot be squared, our nationalist ambitions cannot always be reconciled to our republican scruples.” That is probably so, but what is also is that Hamilton and Madison both saw economics in direct relationship to the nationalist and republican character of the United States—one seeking to give the wealthy rein to pull along the rest of the country and the other trying to check and steer that interest as one faction among many. Today the centrists most reflective of Hamilton’s rosy view of the financial class, however, do not possess his nationalism, and certainly not Madison’s republicanism. The global market has, twixt the moneyed and their nation, severed the ties that might have made them mediators of the common good.

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