Industrial Policy and the Forgotten Side of Alexander Hamilton

Revolutionary Chaos

The Revolutionary War era was marked by economic chaos and disorganization. Christian Parenti describes how the war effort relied on an unstable system of paper currency, leading to inflation and a post-war economic crash. Soldiers often had to procure supplies with increasingly worthless scripts, and the lack of a stable supply chain highlighted the importance of manufacturing for national security 1.

Salt was as important to the revolutionary war armies as gasoline was to the armies of 1945.

--- Christian Parenti

This chaos underscored the need for a robust domestic manufacturing sector, a sentiment echoed in modern discussions about national security and economic independence 2.

   

Early US Economy

The early American economy was predominantly agrarian, with significant regional differences. In the South, large plantations dominated, while the North had small, self-sufficient family farms with limited market interaction 3. Christian Parenti explains that the Revolutionary War pushed northern farmers into the cash economy due to taxation needs.

Hamilton's concern is first and foremost national security. Says we're going to be reconquered and recolonized if we don't have a strong army and navy and state.

--- Christian Parenti

This economic backdrop set the stage for Alexander Hamilton's advocacy for industrial policy, challenging the agrarian ideal popularized by figures like Thomas Jefferson 4.