Lessons to Take From the Failure of the Jeffersonian Revolution
How past wars against cronyism can teach us today
Hamilton and his goons reigned supreme for nearly 12 full years after the passing of the Constitution. He was the man holding the marionette strings during the terms of Washington and Adams. His political chicanery and, honestly, his pretty undeniable work ethic stained America. But all that changed, or supposedly changed, during a period known as the Jeffersonian Revolution.
The Jeffersonian Revolution had been led by a couple of key figures, the most notable being:
Thomas Jefferson (obviously)
James Madison
James Monroe
These figures had always worked diligently against Hamilton’s scheming (with the notable exception of Madison, who we’ll get to later). But in the election of 1800 they really took the center-stage as Jefferson had managed to secure a position as president.
This was bad news for Hamilton, really bad news. Jefferson had always been his archrival in Congress and in the Cabinet, and he had always worked to stop whatever reforms Hamilton was trying to instate. In almost every way up to the Jeffersonian Revolution Jefferson had been Hamilton’s opposite ideologically.
So that settles it. Hamilton’s cronyism, his interventionism, his decades of work would be undone by this great revolution! Well… not so much.
The Revolution itself started off strong, and was, at least in my opinion, moderately successful in Jefferson’s first 2 years in office. It started with Jefferson and his treasury secretary, Albert Gallatin preaching the principles of laissez-faire and working to undo two of Hamilton’s most important reforms: internal taxes and the “monetization of the public debt”. To their eternal credit, they succeeded. Internal tax revenue went from 7% of all of government tax revenue, to less than 1%, and the debt was paid off.
So that’s all well and good, right? The Revolutions over? Hamilton’s defeated? Well not so much. The revolutionaries themselves were always split into two camps, the moderate Republicans and the old (radical) Republicans. The radicals were fighting for true laissez-faire, for the principles of the American Revolution. They supported ending Hamilton’s crony control over the entirety of the judicial branch. They supported repealing Hamilton’s crony central bank (Bank of the United States), in brief, they just supported destroying anything Hamilton had built. The moderate Republicans on the other hand were not anything like their adversaries. They did not support destroying the entire Hamiltonian system, they supported tariffs, and they still supported many interventions. Most importantly, the moderates supported many crony, Federalist and Hamiltonian policies for the goal of “appeasing” New England Federalists into joining the Republican party.
These two factions were now battling it out during the Jeffersonian Revolution, and Jefferson sadly sided with the Federalist in nature moderates.
His decision to side with the moderates defined the Revolution more than anything else. Now instead of true laissez-faire, we got a half-baked version of it. Taxes were lowered, spending did fall, and the debt was paid off but tariffs still remained high, the judiciary still remained controlled by Hamilton, and his central bank was not abolished. This is when the revolution began to falter, and again, it was caused by moderates waffling.
What had happened was that the moderates, in a desperate attempt to solidify their power and their parties power, became what they swore to destroy! A perfect example of this is the war for banks in Virginia. At the beginning of Jefferson’s presidency, the Bank of Virginia was controlled by Federalists, but its charter was coming to an end, and an important decision on whether or not to recharter was coming up. Both Virginia Republicans and Federalists fought hard on this issue, and in 1803 the bank was rechartered. Despite this seeming loss, the Republicans defeated the bill in the Senate. However, the bank was still rechartered, possibly due to the fact that it promised to loan out $300,000 to the state in exchange for 1/5th ownership. This blatant cronyism managed to sway Virginia Republicans into rechartering the bank, and then voting in Republicans to operate it.
This story may seem to have been a win, I mean the state gets $300,000 and Republicans now control the Bank of Virginia, but it was actually one of many losses (similar events to what I described here also happened in Philadelphia and Rhode Island among others). You see, by taking the crony course and deciding to recharter the bill, Republicans in Virginia in essence became Federalists. By deciding to keep these anti-liberty institutions and policies around you compromise on the very principles you espouse. And this is the lesson I think we can all take away from the failings of the Jeffersonian Revolution: “Taking over an anti-liberty institution is not tantamount to increasing liberty”.
To explain what I mean by that sentence I’ll use an example:
You’re a Senator and a part of the Republican Party. There is a decision coming up on whether or not we should abolish the IRS. It is very clear that the Republicans are going to be the ones deciding the vote here, the Democrats aren’t numerous enough. Now you and the party are faced with a choice, do you simply take-over the IRS and instate GOP goons as directors, or do you abolish it out-right?
Abolishing the IRS in this example would be the ultimate pro-liberty move. It would cleanse this nation from quite an evil organization. Taking over the IRS would be the anti-liberty move, as it’d preserve the institution but merely “have it work to our benefit”. And this doesn’t only apply to the IRS, it goes for any anti-liberty organization. The simple fact is that outright abolition is the best course of action.
The reason outright abolition is the best course of action is because these organizations and institutions are antithetical to our fundamental beliefs and principles! In making the IRS “work for our benefit” we become no better than the Federalists, in-fact we become the Federalists as now we are explicitly supporting these institutions! It is a lie that taking over such organizations would benefit the Libertarian cause because all it would do is make Libertarians support such institutions.
I’ll employ another example in order to elaborate on what I mean:
The Holocaust was not a black and white story. The victims were not saints, and the perpetrators were not Satan (of course I am not defending the perpetrators of the Holocaust). It is foolish to imagine that a system as diabolically evil as National Socialism would sanctify its victims, no, it dragged them down to its level. Any miniscule advantage a prisoner could get over another was abused in a desperate fit to stay alive. Even the victims became perpetrators as certain “privileged prisoners” abused their power to torture those beneath them.
Just as the institution and ideology of national socialism degraded and brought its victims down to its level, so to do anti-liberty institutions degrade and bring libertarians down to their level.
In brief, don’t listen to people who clamor and clown on about “taking over” institutions. It’s not a battle that is worth it. Instead, the honorable Libertarian must create their own, liberty-enhancing institutions and abolish these anti-liberty institutions, rather than try to steer them.