The Party of Jefferson, or the Party of Hamilton?

By David Nace



The Democratic Party has long portrayed itself as the party of Jefferson. This claim is largely the result of a speech made by Thomas Jefferson's grandson, Thomas Jefferson Randolph, at the 1872 Democratic National Convention and not as the result of similarities in ideology between today's Democratic Party and the party Jefferson founded.



Thomas Jefferson and James Madison formed the Democratic – Republican Party in 1792 to oppose the policies of the Federalist Party formed by Andrew Hamilton several years earlier. Hamilton wanted to expand the power of the Federal government and to create a central bank. He proposed that the Federal government assume the debt that the individual states had incurred in fighting the Revolutionary War. To pay for his expansion of the Federal government, Hamilton proposed to issue government securities and institute taxes on farm products and whiskey.



These concepts appealed to the New York and New England merchants and bankers whose interests Hamilton represented. These wealthy merchants and bankers had provided much of the funding to the state governments during the Revolutionary War and provided supplies to the Continental Army. The continental script they had been paid in was now worth a mere fraction of its original value. The devaluation of the continental script made Hamilton's proposal very controversial since it would allow speculators and bankers to receive full value of the Continental Currency. The proposal was considered especially unfair to Virginia who had already fulfilled most of its Revolutionary War debts.



Hamilton's plan also called for promoting American manufacturing interests through protectionist economic policies. He proposed a program of direct government subsidies to manufacturers and tariffs on imported manufactured goods.



The final outrage to Jefferson and Madison was that Hamilton had expressed his belief that America should be a limited monarchy like England and not the republic that Jefferson, Madison and the other Founding Fathers had fought for.



As one of the leading philosophers and writers of the American Enlightenment Movement, it was Thomas Jefferson's vision that helped to transform the British colony of North America into the United States. Two of the fundamental principles of the Enlightenment Movement were the concept that individual citizens were capable of self governance and that the purpose of government was to protect the inalienable rights of the individual. He and Madison believed in the primacy of the rights of the states and that the Constitution was intended to limit the power of the newly created Federal government not to expand it.



Today's Democratic Party bears no ideological similarity to the principals of the Democratic – Republican party that Jefferson started. Its policies are far more like those proposed by Alexander Hamilton in 1790.



Since the election of FDR in 1932, the Democratic Party has expanded the scope of the Federal government far beyond the powers granted to it in the Constitution. Roosevelt and his cabinet used the economic crisis to allow the Federal government to regulate production and prices of all types of products under the National Industrial Recovery Act and Agricultural Adjustment Act. They began Federal control of electric power generation by establishing the Tennessee Valley Authority and began government involvement into the mortgage finance industry by establishing the Federal Housing Administration.



The Constitution clearly establishes the separation and balance between the Executive, Legislative and Judicial branches of the Federal government. Yet as the result of the Supreme Court overturning many pieces of New Deal legislation including the National Industrial Recovery Act and the Agricultural Adjustment Act, FDR instituted the Judicial Reorganization Act of 1937 to increase the number of justices and allow him to appoint justices more favorable to his policies. Ultimately, the act failed to pass, but its creation demonstrated that the Democratic Party did not even recognize the separation of powers essential to the Constitution.



Recent Democratic policies also demonstrate that it subscribes to the Hamiltonian concepts of industrial policy. It has proposed direct subsidies to favored industries. This has taken the form of direct investment in General Motors and Chrysler to prevent lawful bankruptcy procedures that would have reduced the United Auto Workers wages and benefits. It is proposing a Cap and Trade scheme that will subsidize alternative energy providers and politically connected energy companies at the taxpayer's expense. If enacted, this plan will greatly raise the energy costs for Americans of every income level. The tax revenues from this program are planned to fund drastically expanding Federal government programs proposed by the Obama administration.



The party of Hamilton is even promoting a plan to allow individual workers to face coercion and intimidation rather than secret balloting when deciding whether to join a union or not. While the Democratic Party portrays concern for individual workers, one of its largest fundraisers, SEIU wants to use the misnamed Employee Free Choice Act to deprive workers of the fundamental right to secret balloting.



While the remnants of Jefferson's Democratic – Republican Party were absorbed by the political parties that later formed the Democratic Party, their political philosophy of expansive Federal programs at the expense of individual rights, individual responsibilities and their lack of respect for the limitations of the Federal government imposed by the Constitution are far more aligned with the ideals of Andrew Hamilton than those of Thomas Jefferson.



David Nace, an Executive Vice President of a Pennsylvania construction and engineering company, is a Liberty Features Syndicated writer for Americans for Limited Government.