It takes a big person to admit the achievements of someone he dislikes. Today, I will be that person. I have a strong dislike of one of our Founding Fathers. He was arrogant, self centered, far too conservative, anti-republican, a militarist and seeker of self wealth, that man is Alexander Hamilton. However, for this time and this time only I am willing to put my views of Hamilton on the side, because the man did get something right, something that could single handedly save America today.
So aside from being a sneaky bastard we can see Hamilton was one good looking son of a gun (No pun intended). But good looks aside, Hamilton's most important work is often is most forgotten. He is most famously known for his work during the Revolution, the framing of the Constitution, his work with the Federalist Papers and his duel with Aaron Burr. But one work of Hamilton's has been over looked by mainstream history and that is his Report on Manufacturing. This work was so through and so well planned that it was used for 190 years as the back bone of American economics. But what is it? And perhaps more importantly why the hell have we stopped using it?
As the Revolution ended the United States was at a cross road. The two options for the U.S. was to become an agriculturally based society and economy or become an industrially based society and economy. Both societies were argued by two of the greatest minds of our nations, Hamilton for industry to Thomas Jefferson for agriculture. I think most of us can tell today who ultimately won that debate, but that aside Hamilton knew that their needed to be a way to help American industry grow and more importantly produce profits for the government but more importantly the nation's wealthier citizens. In 1791, he laid out his plan to Congress in the Report on Manufacturing. The report laid the basis for which the U.S. would run its economy and how it would make it flourish and raise America onto the world stage as a force to be wreckin with. The plan was simple and plain. It is easy enough for a high school student to understand. But before we look at why we have never heard of it, lets look at what it does.
Now you must do something pretty awesome to be put on the $10 dollar bill and that's exactly what Hamilton's report is. The Report on Manufactures is basically in short a series of economic policies that were aimed at stimulating the economy and making the U.S. a self sufficient nation, while keeping businesses in the states. The report has three key components, which in the last 30 some years has fallen by the way side. Step 1, according to Hamilton, was to promote economic growth. They government would encourage economic growth with policies not only focused on business. It tied in the employment but more importantly the embracing of immigrants to diversify not only the work place but the industries that could be created. Along with immigration, it would be the responsibility of the government to help manufacturing not just apply new technologies and sciences to every industry in the nation but to advance those technologies and sciences to make American industries the standard for world manufacturing. This would be done by offering incentives and such but that will be explained a little later. This is the foundation of the report and it is the stepping stone for the next two steps and for what made the American economy and manufacturing industries a world power.
Time for Step 2. Once you have a steady workforce and industries that are on the cutting edge you need to protect the nation and the industries interests. Let me introduce a little something known as a tariff. Webster defines a tariff as "a schedule of duties imposed by a government on imported or in some countries exported goods." The 10 cent definition is tax stuff coming into the country to encourage people to buy locally made products. This is exactly what Hamilton proposed. A tariff is a double edge sword for a nation. First and most obvious it raises money for the federal government. Higher imports taxes equal lower taxes for Americans because now it is not on the American people to be taxed and support the government. Secondly, it forces industries to stay in America. This in turn then creates jobs and employees the populace. It increase job opportunities because now under Hamilton's idea infant industries are given a chance to grow with the U.S. and not compete with larger industries outside the states. Third and finally it allows for American manufactures to raise its own revenues thus increasing economic growth and national GDP. This is good and all but how would Hamilton make this happen? How can you convince a company to stay in the U.S., higher American workers and continue to operate in the U.S. once the business is successful? Bounties, that's how.
Bounties are exactly what they sound like, a monetary reward from the government. Today, we know these as subsidies. The subsidies would be paid off by, you guessed it the, by the tariffs raised from imported goods. The subsidies would help grow American business without hurting supply and demand. It would also make for a more competitive and self sustaining industrial field. This does two things, it strengthens the nation economy and industries while at the same time makes the American economy more and more dominant on the world stage. The subsidies would only be used in support of these industries. First, they'd be used to promote innovations in products, factories, etc. Second, for building infrastructure. Industry needs roads to ship product, so their subsidies would be used to better the national infrastructure. Third, they'd be used for the benefit of the nation. The stronger the industry the strong the economy the stronger the nation. Hamilton believed that for the U.S. to be independent it must do so through its production of domestic goods. It can be seen that through the use of this system the American economy would be able to do nothing be productive and there'd be prosperity across the board.
I know what your thinking, this is just a plan for the rich to get richer, right? Well your right, but also wrong. This plan of Hamilton's is perfect, yes there are those masters of industry that would profit beyond any of our wildest dreams. But your missing the key idea. If all industry was kept within the U.S. there would be almost zero unemployment. Ok, maybe not zero but throughout American History there has only been a few times when the U.S. unemployment rate passed 10%. In fact the U.S. government has always tried to enforce Hamilton's idea. The Homestead Act of 1862, Union movements, The New Deal all across U.S. History we can see ways that the government and Americans try to succeed at promoting domestic employment and industry. But how did Hamilton's work slip into the shadows of history? Well if your still reading Republican audience, you might want to now.
Thats right it was the almighty conservative Republicans hero himself, Ronald Reagan. Reagan's economic policies of Reaganomics started the snowball which over the last 30 years has turned into the avalanche that is the current U.S. economy. Yes, we had that bump when President Clinton saved the American economy by, well he used Hamilton's report. The basic idea here people is that in order for America to be successful again it's time we look at what our Founding Father's laid out for us. People love to say what the Founders would think but with Hamilton's Report on Manufactures, he leaves no room for interpretation. He says it in plain 18th century English and for 190 years American Presidents, Congressmen, Senators and others listened and it's time we listen again. Hamilton's report has made resent headlines as if it is some lost treasure, but it's always been there. President Obama is trying to revive the economy and you can see that in resent steps taken by his administration. The American car industry is making a terrific turn around, he is trying to kick start the renewable energy industry which Ronald Reagan killed before it could even get started, giving tax cuts to American companies that in source jobs to the states and is now taking on the task of taking on the education systems which in the end will create a more technologically advanced American workforce. There are several steps that the Obama administration is using to get America back on track, the American Jobs Act, the Made in America Act and so on. American History is filled with great inventors, manufacturing geniuses and industrial giants but over the last 30 years we have seen to stalled out. Henry Ford once said, "A business that makes nothing but money is a poor business" perhaps one of America's greatest businessmen should be heard again by today's business world, a good kick in the pants is needed every now and again.