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Free Minds & Free Markets

Alexander Hamilton May Rule Broadway, But He Was No Banking Genius

Larry White, avatar of the libertarian tradition of advocacy and scholarship regarding "free banking," takes the enormous revival in popularity of Broadway sensation and founding father Alexander Hamilton as a teaching moment about how state monopoly banking wasn't a genius innovation of its time.

sniggie/Fotersniggie/Foter

None other than former Federal Reserve chieftain Ben Bernanke (who tends to overrate the historical wisdom and necessity of the central banking he served and is as stained by politics as can be) avers, "Hamilton was without doubt the best and most foresighted economic policymaker in U.S. history." Why? Partly because he helped shove through "the chartering in 1791 of the First Bank of the United States, which was to serve as a central bank and would be a precursor of the Federal Reserve System."

The tricky thing about that First Bank, says White from his free banking perspective, is that it was granted a state monopoly on interstate branch banking. (States at that time did not let out-of-state banks operate branches in their state.)

White insists that "Creating a legal monopoly where open competition could and should prevail is hardly a mark of good or foresighted economic policy."

Even the evidence potentially available to Hamilton at the time would have indicated aspects of his error:

A more wholesome, solid, and beneficial credit system could be observed in Scotland at the time, with free entry into nationwide branch banking. Hamilton's "masterpiece" was oblivious to the benefits of competition in banking, much less the separation of banking and state. In his banking policy views, as in his tariff policy views, Hamilton was a retrograde mercantilist.

Adam Smith knew the score, and Hamilton should have gotten the point from him, as per this from Wealth of Nations:

The late multiplication of banking companies in both parts of the United Kingdom, an event by which many people have been much alarmed, instead of diminishing, increases the security of the public. … By dividing the whole circulation into a greater number of parts, the failure of any one company, an accident which, in the course of things, must sometimes happen, becomes of less consequence to the public. This free competition, too, obliges all bankers to be more liberal in their dealings with their customers, lest their rivals should carry them away. In general, if any branch of trade, or any division of labour, be advantageous to the public, the freer and more general the competition, it will always be the more so.

Some of Hamilton's academic cheerleaders note that he had read Smith, so obviously "Hamilton either didn't understand Smith's policy message — the more banks competing the better — or rejected it as not helpful to his own mission of empowering the federal government, for which his chosen means was to forge an alliance between the government and a new privileged financial elite."

Hamilton, as great a showman as we now know he was, was in fact not far-seeing but behind the times in "pushing for an exclusive nationwide bank with a sweetheart government deal. He was...a persuasive second-hand dealer in discredited mercantilist ideas.

A quick explanation on how and why too many mainstream economists and historians overprivilege the wonders and necessity of central banking of the sort of which Hamilton is a patron saint.

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  • Fist of Etiquette||

    Well, write a musical about it.

  • Rhywun||

    Black it up and watch the dollars roll in.

  • __Warren__||

    BLACK THAT BITCH UP!

  • Heroic Mulatto||

    What the fuck did The Wiz ever do to you?

  • Rhywun||

    Heh I remember singing some of those songs in early 80s elementary school music class.

  • AlmightyJB||

    Speaking of banking, just saw this.

    http://money.cnn.com/2016/09/0.....index.html

  • ||

    Obama pardons them all, blames racism and Trump, hires them all for high level government positions.

  • You Sound Like a Prog (MJG)||

    Oh yah?

  • __Warren__||

    Wells-Fargo is the worst. I had a three year battle with those bastards over a $25 dollar fee that I knew I didn't owe them.

    And then...it all disappeared. Maybe it was connected to this fraud and got zeroed out by auditors.

  • ||

    So, an institution is allowed to borrow money created out of thin air by a quasi government entity created out of thin air, and then loan it to the poor serfs for interest, and you expect that they will be angels? BOA is much better... I LIE!

  • Tagore Smith||

    I disagree- Comcast is the worst. Wells-Fargo just sucks. WF did just cancel my debit card with no notice in order to issue me a new one with a chip, but that's bush-league annoyance, and my local merchants know me well enough that they were like "take the stuff, and pay us tomorrow" when my WF debit card inexplicably stopped working.

    Comcast on the other hand- one day I was looking over my bill and realized they'd been overcharging me $40.00 a month for 8 months. That's 320 dollars, and while I'm a bit sloppy when it comes to money that's enough for me to bother making a phone call.

    So I call them up, they agree that they've overcharged me, and tell me that I shouldn't pay my next bill, because it might not reflect the credit. Then they shut off my internet, and charge me 5 bucks to turn it back on. So I call them up, they once again agree that they've overcharged me, and tell me to not pay my bill... wash rinse and repeat. They also manage to disconnect me entirely for a month while hooking up my neighbors. And refuse to even credit me for that month.

    Eventually I get drunk, call them up, and threaten to take a baseball bat to the next Comcast van I see in my neighborhood. The conversation is hilarious, and they don't like me much, but srsly- the only reason I don't do that is that the guy driving the van isn't responsible for any of this. The next time I run into Brian Roberts at a social function I'm going to punch him in the face.

  • Trshmnstr smells of Lo Mein||

    Comcast does blow. I did some software work on their set-top boxes about 8 or 9 years ago. The hardware in those boxes was nice enough that you could have 4 football games on the screen at the same time, and you could have custom designed graphics on the screen pulling info from the internet.

    Comcast pretty much put the kibosh on that, locked down the boxes, and loaded their last-gen software onto the high-performance hardware.

    That's when I knew that Comcast didn't care about their customers.

  • Agammamon||

    They're the cable company, they don't care - they don't have to.

    https://www.youtube.com/watch?v=CHgUN_95UAw

  • Tagore Smith||

    I have another fun Comcast story- my connection failed when they were trying to do a firmware upgrade, so my router got half of it. The funny thing about it was that I could do anything _except_ connect to port 80 at any other site. That made it hard to browse the web.

    The conversation I had with Comcast was great, though. I used a Linux boot disk to diagnose the problem. "We don't support Linux" they said. Idiots.

  • Ted S.||

    I prefer the George Arliss movie.

  • Adans smith||

    Have a good night everyone. Time to watch some football and have a few brews.

  • __Warren__||

    I'm liking this run-heavy Panthers' offense.

  • DenverJ||

    They're working awfully hard. Also, Cam is a punk.

  • __Warren__||

    Hey, I'm a Bucs fan so I despise the other teams in the NFC South but as I'm a run-first guy I like to see a big emphasis on the run game.

  • ||

    Cam is a whiney bitch punk and the Donkey's suck donkey ballz.

  • __Warren__||

    Who the hell is Trevor Simian?

  • ||

    Who?

  • __Warren__||

    IKR?!

  • DenverJ||

    This is what the state of Colorado is asking. We're going that the rest of the team is so strong (super bowl champs!), that you can plug anybody into the QB and still win. Well see. Also, although Cam is a whiny ass link, he does have mad talent.

  • DenverJ||

    *punk, not link

  • DenverJ||

    * and hoping, not going

  • ||

    Except when a good defense gets in his bitch face.

  • DenverJ||

    Ten point lead. Damnit donkeys! Get it together!

  • __Warren__||

    I agree. Start the Panthers off with a loss.

  • __Warren__||

    Cam be injured.

  • DenverJ||

    Yeah. I was joking earlier after a hit about "how's your knee, Cam?" But I was joking. I sincerely hope that he is not badly injured.

  • DenverJ||

    (as long as he misses the rest of this game)

  • ||

    Peyton is gone. He sucked in the last SB, but he must have had a psychological effect on the team, even though the win was all D. The Donkeys shall soon meet their doom and it's name is Khalil Mack.

  • DenverJ||

    Think of the knowledge and experience. Even in poor physical condition (comparatively), he still could outthink his opponents. This new guy? Maybe not so much. Like I said, we'll see. Lot of season left, this is the very first game.

  • ||

    I blame the patriarchy.

  • DenverJ||

    Yeah, weren't they accused of under-inflating balls?

  • ||

    If not for these old white devils, then all of the world would be a paradise, a veritable heaven on earth. Just look at the rest of the world and how horrible the USA and Europe are in comparison. We have to wipe out the white devils so that paradise will appear.

  • Agammamon||

    https://youtu.be/NP75VTs4mBQ?t=63

    White man's gotta rule the world, dawg.

  • Holger da Dane||

  • ||

    Some misdemeanors also strip citizens of their 2nd amendment rights forever. Look for this to increase dramatically in the future. And now, they've even stripped users of medical cannabis of their 2nd amendment rights.

    The Constitution is dead, the rule of law is dead.

  • Holger da Dane||

    Well this at least tugs a tiny bit in the other direction. If barely.

    As a more broad policy, I think sentencing reform should include automatic pardoning of crimes after a period of time. It doesn't make sense that people are forgiven for a crime when the statute of limitations run out, but only if they weren't caught.

    Wipe the crime from a person's record once their sentence has been completed. Or, if that's too horrifying for the nannies, wipe it after punishment, plus the SoL of the crime.

  • Agammamon||

    The main problem with misdemeanors stripping 2nd amendment protections is that the Federal government strips those protections when someone is convicted of a crime with a *one year* or more sentence - misdemeanor or felony.

    If they simple left it at felonies - as defined by whichever court/legislature is doing the convicting - there'd be a lot less people losing their rights after a conviction for minor bullshit.

  • Agammamon||

    Personally - all protections should be restored at the end of your sentence. In addition, no 'regulatory' bullshit either (like sex offender registries). If it ain't punitive then there's no justification for a restriction and if its punitive then the convict has some protections from being fucked with (like no post-hoc punishments).

  • bricoleur||

    Doesn't matter. Heller is going to be either overturned or completely gutted within the next two years.

  • spqr2008||

    And liberals don't get why I think it's so dangerous to overturn Heller. If a ruling rooted in the actual constitution can be overturned easily, who's to say that a different Supreme Court won't just look at Roe vs. Wade and laugh?

  • Holger da Dane||

    Well obviously this is why only they should be allowed to have any power..

  • __Warren__||

    Free Banking is a awesome but little known bit of history.

  • ||

    While John Adams weeps and wonders where's his musical?

  • You Sound Like a Prog (MJG)||

    "Alex gets a black hip hop musical, and I get played by Paul Giamatti? Fucking great! That's just fucking perfect!"

  • Grand Moff Serious Man||

    He was played by Mr. Feeney from Boy Meets World in the musical 1776.

  • Grand Moff Serious Man||

  • Quincy.||

    Hey, they could have cast Steve Buscemi.

  • wef||

    The practice of apologetics is in essence an exercise is defending what turns out to be a very convenient claim in support of power or self-congratulatory delusion or some incoherent mix of both. For some time now it has been clear that central banking apologetics is more corrupting than religious apologetics. In both cases the apologists rely on a mass of unsophisticated dupes and - worse - a herd of eager-to-believe sophisticates who are besotted by confirmation bias.

  • Acosmist||

    So, no libertarian apologetics, then? Seems like you might be on the wrong site.

  • Quincy.||

  • straffinrun||

    Always despised the plastic, manipulative vibe most TED talks emit. This guy nails it.

  • __Warren__||

    Don't enact our labor, dude!

  • straffinrun||

    The Onion. *Tents finger*. https://m.youtube.com/watch?v=tom6_ceTu9s

  • __Warren__||

    Holy shoit that's a masterpiece.

  • __Warren__||

    *shit

  • straffinrun||

    The sycophants nodding approvingly as they gut gibberish. Who falls for that blatant brainwashing attempt?

  • GILMORE™||

    "lets look at a picture of the planet for no reason".

    Yeah, that's good.

    This is an even deeper parody/satire of TED talks... because it is one. Don't ask me about the costume.

  • straffinrun||

    So he feigns being a bumbling idiot in order to add ironic levity to what he obviously considers a profound idea. Doesn't quite work when he says, in seriousness, "Ideas are amazing!".

  • straffinrun||

    Did I miss some triple reverse /sarc on that?

  • GILMORE™||

    Did I miss some triple reverse /sarc on that?

    Yes.

    its not for everyone. its very dark gonzo humor. Everything he says is one big "fuck you". he's purposely horrible. he just spouts a stream of cliches that all these other TED-talkers do, and does it really badly and illogically, and jumps from one claim to another with no actual support (look at his "charts"), but because (like all TED talks) the say what people already want to hear

  • GILMORE™||

    Here's the same guy volunteering for Bernie Sanders. I think at one point he's being to go door to door and hand out leaflets and he asks, "Do we tell them just what's on the script, or can we also talk about rounding up and killing the bankers - or is that just like, for later, when we win?""

  • bricoleur||

    A lot of the talks are utterly insipid of content, but we shouldn't dismiss the importance of an effective speaking style. Gary Johnson could learn a lot from TED talks or Toastmasters or even just surrounding himself with advisors instead of adoring sycophants.

  • GILMORE™||

    utterly insipid of content

    totally indubitably

  • DenverJ||

    Yeah, good call, that wasn't a first down. Too bad.

  • DenverJ||

    Yeah baby. Bronco's lead.

  • __Warren__||

  • __Warren__||

    Way to go there #25. There was no need to touch the guy at all.

  • __Warren__||

    And now #48 decides on a bit of dumb-fuckery.

  • __Warren__||

    Gano good!

  • Libertarian||

    Let the record show that this did NOT happen in Florida, but the state where the wind comes sweeping down the plain. (and, once again, I have to go to the UK papers to get the best stories of what is happening in the USA).

    "According to a KFOR report, Patricia said she didn't believe that she would be breaking the law by marrying Misty as her name does not appear on her daughter's birth certificate.

    Patricia had previously married her son, Jody, in 2008, with the marriage annulled two years later."

    http://www.telegraph.co.uk/new.....-marriage/

  • DenverJ||

    Well, the bronco's tried to loose through completely unnecessary and uncalled for fouls, but still managed to beat the number two team, (cough) again.

  • bricoleur||

    Yeah, I thought personal fouls didn't get offset by non-personal fouls anymore?

    Or was that just another temporary blip in Goodell's fearless experimentation with the rules of America's national pastime?

  • Vampire||

    Hamilton was secretary of the treasury in 1789. Not sure why any of the panics/crashes due to gov't and central bank policy were mentioned???? In short order, Hamilton helped create the Bank of the United States in 1791, followed by the panics of 1792, and also 1796/97, where a real estate bubble burst after great land speculation that was driven by gov't policy/credit expansion.

    Central banking should be opposed by all. Yet people talk of fire and brimstone raining down if the fed didn't exist. This is nonsensical, as they wouldn't be saying that if they realized how much the gov't & central bank had robbed them through currency debauchery.

  • W. Chipper Dove||

    This.

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