What President Trump Can Do With The American System 2.0 - Flipbook - Page 7
Unlike today’s Federal Reserve, Hamilton’s
national bank was a bulwark against 昀椀nancial
speculation, and it did not act as a lender of last
resort for unsound private banks or 昀椀nanciers.
Hamilton stated that it would be the policy “to
succor the wary and industrious; to discredit
the rash and unthrifty; to discountenance both
usurious lenders and usurious borrowers.”
The axiomatic basis of Hamilton’s approach,
and what became known as the American System, is the understanding that the ultimate
source of all wealth comes from mankind’s creative discoveries. Money has no intrinsic value,
but must be used as a tool to facilitate the creation of true value through human enterprise.
As Hamilton wrote,
The intrinsic wealth of a nation is to be
measured, not by the abundance of the
precious metals contained in it, but by
the quantity of the productions of its
labor and industry. … The tendency
of the national bank is to increase public and private credit. Industry is increased, commodities are multiplied,
agriculture and manufactures 昀氀ourish,
and herein consist the true wealth and
prosperity of the state.
The full intention of Hamilton’s system is revealed in his 1791 Report on the Subject of Manufactures. What Hamilton presents in this work
is an extended argument in favor of scienti昀椀c,
technological and industrial progress as the
foundation of the sovereign nation state and the
basis for the advancement of the people.
A careful reading of this report reveals that
the primary intention of the national bank—together with Hamilton’s other initiatives in tari昀昀s, taxation, and internal improvements—is
to foster rapid advances in upward human development. Everything is designed to serve the
interests of the people, to create more opportunity, and to support the inventiveness and creativity of the citizenry. As Hamilton says in the
report, “to cherish and stimulate the activity of
the human mind, by multiplying the objects of
enterprise, is not among the least considerable
of the expedients by which the wealth of a nation may be promoted.”
Promethean Action
Hamilton proceeds to de昀椀ne a series of measures to actively promote the manufacturing
and technological development of the nation,
including:
1. Protective Tari昀昀s
2. The Prohibition of Rival Articles [restricting
imports of goods that compete with domestically produced items]
3. Premiums and Pecuniary Bounties [using
tari昀昀 revenue to sponsor new inventions and
technologies]
4. The Encouragement of New Inventions and
Discoveries
5. The Facilitating of the Transportation of
Commodities
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