I have had a think-tank director’s crush on Michael Lind, co-founder of the New America Foundation, since I read his four-part filleting of the US Senate in 1998. The man is a polymath with a golden tongue, as he amply demonstrates in his 2012 book Land of Promise: An Economic History of the United States. Better, he is an iconoclast, unsatisfied with any particular ideological presumptions. Not since reading Benjamin Friedman’s Moral Consequences of Economic Growth have I encountered an economic argument that so successfully forced me to examine my own comfortable assumptions.
Lind begins with a detailed retelling of the Jefferson-Hamilton debate over the role of the federal government in economic policy, a debate which at first seems like trivia for history buffs. (Review: Jefferson was the voice for smallness, for economic and political decentralization, against banks and industry and cities; Hamilton was the voice for a vigorous national economic policy, including a national bank, public investments in infrastructure, spending on science and research, and strong central coordination of industrial development.) Lind then shows the unbroken relevance of the debate by retracing American economic history up to the present, following these strands of ideology as they braid through and across the left-right spectrum. Jackson and Reagan = Jeffersonian; Roosevelts and Eisenhower = Hamiltonian. It’s an insightful undertaking, revealing the way Hamiltonian thought runs through both New Deal progressivism and neocon militarism and how Jeffersonian impulses characterize both libertarians and small-is-beautiful greens. He successfully adds another axis to the conventional mapping of American political history.
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More original and important, however, is Lind’s economic assessment. He argues systematically that America’s economic success has almost always flowed from Hamiltonian policies, not from Jeffersonian decentralization. Indeed, he makes a case that much that’s wrong with US economic policy is caused by the polity’s susceptibility to Jeffersonian mythology about decentralization’s virtues. He writes, “What is good about the American economy is largely the result of the Hamiltonian developmental tradition, and what is bad about it is largely the result of the Jeffersonian producerist school.”
Lind argues for a bigness that includes not only much more regulation of corporations, especially financial ones, but also—controversially—larger corporations and more coordination among them. Whole sectors of a post-industrial economy—air travel, trucking and pipelines, telecommunications, financial services—ought to be considered more like utilities than like Adam Smith’s pin factories. They ought to be dominated, in Lind’s view, by giant organizations that are closely and intrusively regulated by democratic institutions. Those companies, in turn, ought to be large enough that labor unions can fruitfully organize the companies’ employees. With public support, those unions will be able to negotiate for a fairer share of capitalism’s rewards, narrowing the astronomical income and wealth gaps of recent decades. These negotiations will be easier on corporations, furthermore, because they will involve not individual companies but cartels of employers in each sector.
This package of prescriptions will sound at first like European- or East-Asian-style capitalism, and in some ways, it is. What’s intriguing about Lind’s argument, however, is that he marshals compelling evidence that this Hamiltonian model is, in fact, the root of the United States’ prosperity already. He uses free-marketeers’ economic scorecard to debunk their pablum about government being the problem. And although he didn’t convince everyone, he convinced me—a proud Jeffersonian of the Schumacher line—that I ought to be less sure of myself. Small may be beautiful, but big may be better.