Friday, April 02, 2010

Elevating Wikrent

Tony Wikrent, NBBooks on Daily Kos, and now a contributor at Real Economics, left this comment on MNO’s post In which Rep. Emmer gets a civics lesson. I thought it deserved to be elevated to a guest post:

Actually, these neo-confederate bozos are deadly serious. Unfortunately, the fight over just what the "enumerated powers" meant in terms of the power and reach of the national government began almost as soon as the Constitutional Convention was over. Fortunately for posterity, the first President, George Washington, accepted and applied Secretary of the Treasury Alexander Hamilton’s interpretation that the national government was granted implied powers to perform its function as, well, as a national government, under the “necessary and proper” clause of the Constitution. The unfortunate idea of enumerated powers was birthed in Jefferson’s and Madison’s increasingly open hostility to the growing ministerial powers of Hamilton, and even more unfortunately, given full sanction by both when they in turn served as President, as they vainly attempted to force the United States to remain a utopian paradise of agrarian yeomen.

Even more interesting, given the problems we face today of unaccountable corporate power and unaccountable monetary creation by the privately held Federal Reserve System and the shadow banking system, is that Hamilton’s doctrine of implied powers was fully detailed and explained in the crucial report Hamilton wrote at President Washington’s request, on the constitutionality of the national government establishing the Bank of the United States. The details of this historic pivot point is given by Ron Chernow on pages 350 to 355 in his excellent biography of Hamilton. The Attorney General, Edmund Randolph, had written a report that favored Jefferson’s position. In dismay at the specter of the new national government not being able to actually do what a national government is supposed to do, the President asked Hamilton to write his own report.

Chernow writes that Hamilton:

told Washington that, if adopted, "principles of construction like those espoused by the Secretary of State and the Attorney General would be fatal to the just and indispensable authority of the United States."35 Then, in blazing italics, Hamilton trumpeted his main theme: "Now it appears to the Secretary of the Treasury that this general principle is inherent in the very definition of government and essential to every step of the progress to be made by that of the United States: namely that every power vested in a government is in its nature sovereign and includes by force of the term a right to employ all the means requisite and fairly applicable to the attainment of the ends of such power." If Jefferson's and Randolph's views were upheld, "the United States would furnish the singular spectacle of a political society without sovereignty or of a people governed without government."

Hamilton waved away complaints that the Constitution did not explicitly mention a bank: "It is not denied that there are implied as well as express powers and that the former are as effectually delegated as the latter."37 To argue, as did Jefferson, that all government policies had to pass a strict test of being "absolutely necessary" to the performance of specified duties would paralyze government. How could one say with certainty what was absolutely necessary? Hamilton pointed out that, in setting up the Customs Service, he had overseen construction of lighthouses, beacons, and buoys, things not strictly necessary, but useful for society all the same. He was drafting a rationale for the future exercise of numerous forms of federal power.

The Bank of the United States would enable the government to make good on four powers cited explicitly in the Constitution: the rights to collect taxes, borrow money, regulate trade among states, and support fleets and armies. Jefferson wanted to deprive the federal government of the power to create any corporations, which Hamilton thought could cripple American business in the future. At the time, few corporations existed, and those mostly to build turnpikes. The farseeing Hamilton perceived the immense utility of this business form and patiently explained to Washington how corporations, with limited liability, were superior private partnerships. In the end, his bank argument was predicated not only on interpretation of the Constitution but on his reading of history: "In all questions this nature, the practice of mankind ought to have great weight against the theories of individuals."38

After writing this magisterial defense, Hamilton packed it off to Washington before noon on Wednesday, February 23. The next day, Washington studied the opinion and, despite lingering doubts, was sufficiently impressed that he did not bother to send it to Jefferson. The day after that, he signed the bank bill.

Hamilton's plea for the bank had a continuing life in American history, partly from the influence it exerted upon Chief Justice John Marshall. When Daniel Webster made oral arguments for the Second Bank of the United States in the landmark case of McCulloch v. Maryland in 1819, he quoted Hamilton's 1791 memo to Washington on the necessary-and-proper clause. In words that distinctly echoed Hamilton's, Marshall said that necessary didn't mean indispensable so much as appropriate. Repeatedly in American history, Hamilton's flexible definition of the word necessary was to free government to handle unforeseen emergencies. Henry Cabot Lodge later referred to the doctrine of implied powers enunciated by Hamilton as "the most formidable weapon in the armory of the Constitution ... capable of conferring on the federal government powers of almost any extent."39 Hamilton was not the master builder of the Constitution: the laurels surely go to James Madison. He was, however, its foremost interpreter, starting with The Federalist and continuing with his Treasury tenure, when he had to expound constitutional doctrines to accomplish his goals. He lived, in theory and practice, every syllable of the Constitution. For that reason, historian Clinton Rossiter insisted that Hamilton's "works and words have been more consequential than those of any other American in shaping the Constitution under which we live"40

How, then, to account for the growth of belief in the argument that the national government is limited to the enumerated powers? My own view is that all such arguments have been put forward by factions seeking to preserve their own rent-seeking economic behavior, or to avoid being forced to account for the costs of economic externalities they have imposed on others. Or, in the case of the Southern slave-owning planter aristocracy, to prevent the national government from moving forcefully enough to extirpate their "peculiar institution."

This, obviously, is a long enough comment, and just as obviously, could become even longer. I shall close here with two observations. First, that, as you stated, these neo-confederate yahoos are ahistoric morons, who have never taken the time to actually examine some of the principal founding documents of our nation, such as Hamilton's report on the National Bank. Second, that it is more than coincidence that these neo-confederate yahoos hate the Ameircan government, but love the "free market" and "free trade" economic doctrines of the British East India Co., which doctrines, we should note, were developed as justifications for the slave trade, and later for the opium trade and wars, and even later repackaged by Milton Friedman and marketed as "freedom to choose."

Anyone who tosses off the term “agrarian yeomen” is okay in my book.

Update: Of course, I managed to spell Tony’s last name wrong. I fixed it, but regrettably, this misspelling will live forever in the post link in Blogger. Apologies to Tony.

He also mentioned that the comment was truncated by the comment system, so I’ll fix that shortly. [Done]

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