Breaking our Concentration: Lessons from Jefferson, Hamilton, and Lincoln on Local Economies

Aberdeen, SD. In October 1785 Thomas Jefferson, then living in Paris as the American envoy, wrote a letter to his friend James Madison. In this justly famous letter, Jefferson relates a recent event. Jefferson had been strolling the countryside when he came across a poor woman. Wishing to learn something about the ways of the French poor, as well as seeking directions for his travels, he struck up a conversation. The woman explained to him the facts of her extreme poverty. For example, her wages were so low that it cost her seventy-five-days wages simply to pay the rent on her house. She and her two children were often hungry. Jefferson gave her a sum of money and went on his way.

This event characteristically spurred Jefferson to thought. “The property of this country is absolutely concentred in a very few hands,” writes Jefferson. The “flower of the country” are employed as servants on great estates rather than doing more productive work. While there is some manufacturing, there are countless French who are idle, unable to provide for themselves while, Jefferson notes, vast tracts of land lay uncultivated as part of the large estates. “I am conscious that an equal division of property is impracticable,” he proclaims, “but the consequences of this enormous inequality producing so much misery to the bulk of mankind, legislators cannot invent too many devices for subdividing property.” Jefferson recommends two provisions, namely abolishing primogeniture and eliminating “all from taxation below a certain point, and to tax the higher portions or property in geometrical progression as they rise.”

Then Jefferson famously states, “The earth is given as a common stock for man to labor and live on.” In a Lockean vein, he argues that we allow land to be appropriated for the “encouragement of industry.” Those without land, however, deserve access to some productive labor. The poor should be allowed access the uncultivated land so as to provide for their own needs. “The small landholders are the most precious part of a state,” opines Jefferson.

This echoes Jefferson’s famous statement in Notes on the State of Virginia, in Query XIX on the dangers of a manufacturing economy, wherein he states, “Those who labor the earth are the chosen people of God, if ever he had a chosen people.” This speaks well of the farmers, but represents a demotion for the Jews. In this Query, Jefferson urges America to reject manufacturing. “While we have land to labour then, let us never wish to see our citizens occupied at a work-bench, or twirling a distaff.” Why is this? Jefferson’s reasoning is clear: Those who labor the earth are able to provide for their own sustenance. Able to cultivate the earth and receive her bounty, they rely on no one else for the livelihood. This makes them independent, thus good republican citizens.

Manufacturing, on the other hand, relies on sales. You need people to buy your goods in order to make money to purchase the things that the farmer can provide for himself (a domicile, clothes, food). The manufacturer has to manufacture something in addition to his goods, namely demand. He must convince people, through advertising and marketing, that we need the things he makes. To that extent he is dependent. He’s dependent upon earning money from others so he can purchase life’s necessities, but also dependent upon the whims of public opinion in order to sell his goods. Jefferson contends, “Dependance begets subservience and venality, suffocates the germ of virtue, and prepares fit tools for the designs of ambition.” Cities filled with banks and industry, concludes Jefferson, contribute so much to “pure government” as “sores do to the strength of the human body.”

There is much to be said for Jefferson’s vision. Wendell Berry has defined freedom as “pretty much a synonym for personal and local self-sufficiency.” The more we think of life’s goods as something we purchase as opposed to something we can make, the more we are dependent upon others or the impersonal “market” to provide these things. One theme of zombie literature, I have contended, is that it speaks to our fear that absent on-demand electricity most of us would struggle to survive. What we gain in convenience we lose in resilience and independence, and recent power outages in Texas and California have reminded many of these dangers. As Berry points out, without electricity “it would be difficult to travel, especially in cities. Most of the essential work could not be done. Our windowless modern schools and other such buildings that depend on air conditioning could not be used. Refrigeration would be impossible; food would spoil. It would be difficult or impossible to prepare meals. If it was winter, heating systems would fail. At the end of forty-eight hours many of us would be hungry.” Does that sound like a free people?

But there is a shortcoming to Jefferson’s agrarian paradigm. As his argument suggests, it depends upon plentiful land. Jefferson became a proponent of expansion of the American republic, constantly eyeballing new lands in which to grow. His theory depends upon there being sufficient uncultivated lands to meet the needs of every citizen. An imperialist germ lurks within this seemingly benign agrarian archetype. There is the further problem that not everyone has the desire or aptitude to be a farmer. There needs to be an outlet for those who wish to use their talents to provide for themselves and their families. For most that will mean something other than agriculture.

That is part of the argument Alexander Hamilton articulates in his “Report on Manufactures.” There are some obvious shortcomings to Hamilton’s “Report,” such as his enthusiasm for child labor and his blindness to the problems that attend the division of labor. But Hamilton sees things Jefferson does not. First, nations have to be independent as well as individuals. As with people, can a nation be free when it is dependent upon foreign nations for manufactured goods? Hamilton posits as a leading argument in favor of domestic manufactures that it “render the United States, independent on foreign nations, for military and other essential supplies.” One might think of the hold that China has on the United States in the present day as an illustration of Hamilton’s fears.

Further, Hamilton sees manufacturing as an outlet for the diversity of talents a nation might possess. He explicitly lists as advantages of manufacturing, “The furnishing greater scope for the diversity of talents and dispositions which discriminate men from each other,” and “The affording a more ample and various field for enterprize.”

Both Hamilton and Jefferson are making an economic and a political argument. Jefferson believes wealth comes from owning land, thus the more land a nation owns the wealthier it is. Hamilton, more in line with Adam Smith, believes wealth comes from productivity, thus the need for diversity and specialization in economic activity. On the political side, Jefferson holds up the economic independence of the yeoman farmer as essential to free government, while for Hamilton it is national independence from foreign powers that is more important.

Both Jefferson and Hamilton speak important truths. Can we find some harmony or synthesis between the two? I think we can in the economic thought of Abraham Lincoln. With his Whig political education, Lincoln inherited a Hamiltonian vision of an active government that promoted economic activity. Lincoln was skeptical of a simple agrarian economy as it did not allow for the diversity of talents and interests that exist in society. Therefore government must take active steps in promoting economic activity beyond that of agriculture. Throughout his political career, both in Illinois and Washington, D.C., Lincoln supported internal improvements, banking, and a protective tariff.

On the other hand, Lincoln’s vision of labor was decidedly Jeffersonian in that Lincoln held individual self-sufficiency as a primary economic and political good. Hamilton, Lincoln might argue, gives insufficient attention to the threat of centralization of economic power. As I have argued previously here on the Front Porch, Lincoln’s economic vision bears remarkable resemblance to distributism. Lincoln’s well-developed theory of free labor gave strong preference to small farmers, small businessmen, and independent entrepreneurs. Lincoln made an explicit distinction between free labor and wage labor, claiming wage labor was inferior to actual free labor. Lincoln laid out what he saw as an ideal economic arrangement: “Men with their families—wives, sons, and daughters—work for themselves, on their farms, in their houses, and in their shops, taking the whole product to themselves, and asking no favors of capital on the one hand, nor of hired laborers or slaves on the other.”

Here Lincoln wishes to promote Jeffersonian virtues by Hamiltonian means. In a Jeffersonian vein, Lincoln wants to encourage small, independent operations that free people from dependence on “the man.” Such an economic structure inspires a kind of self-sufficiency and economic independence that itself creates political virtues necessary for a free citizenry. But Lincoln, like Hamilton, recognizes that wealth comes from productivity. In his Wisconsin Agricultural Address Lincoln exclaims, “Every blade of grass is a study; and to produce two, where there was but one, is both a profit and a pleasure.” The application of industry and knowledge to farming will allow for equal production to come from smaller farms. This will allow for farming to remain profitable even after land is exhausted. Lincoln’s support for Homestead legislation goes hand-in-hand with Land Grant College legislation. Disperse public lands widely, but also give people the knowledge to use that land profitably. Further, Lincoln wants to use government to promote business and manufacturing so that individuals such as himself who had little talent or inclination for farm work could find economic independence. Lincoln’s opposition to the expansionist Young America movement stems from his rejection of the notion that wealth comes from ownership of land.

This debate is a live one in our day. The centralization of wealth is reaching levels unseen since the Great Depression. Corporations seem to have ever greater control of our lives, especially those that deal in technology and information, the essential goods of our day. While some note that ownership in publically traded companies is widely distributed, largely through retirement accounts, legal ownership of shares in corporations does not produce the virtues of ownership that Jefferson and Lincoln wish to propound. Indeed, it leaves corporations in the hands not of vigilant democratic ownership, but of a managerial class whose values may run counter to that of a free people. Our corporate structure of wealth leaves most of us, even if nominally in ownership through some retirement or mutual fund, unable to practice the habits of ownership that Jefferson and Lincoln favored. In Allen Tate’s terminology, it is the difference between mere property and effective property, or passive versus active ownership.

What can we do, other than gripe and write online essays? We ourselves can watch our buying habits. We can buy local when possible and avoid the biggest corporation when local is not possible. I live in a very small town without a bookstore. I must purchase almost all my books online. I recently decided, for many reasons, not to buy books from Amazon. Instead, I purchase from Barnes and Noble. Others use Thrift Books. My family avoids Wal-Mart and buys most of our groceries from a locally-owned supermarket. Few of us are farmers, but we can grow at least some of our food in a garden. Most cities now have a farmers and crafts markets. We can support such endeavors. There is a growing sense that more vigorous use of anti-trust legislation against our larger corprations might be in order. On the other hand. we can encourage legislation to make it easier to start small businesses. My family in recent years has been involved in starting two small not-for-profit educational endeavors. Luckily, we have lawyer friends who are willing to help draw up papers, but should it really take a lawyer to successfully open a small, non-descript operation? Is society really threatened because my family barters our kids’ haircuts with a former hair-stylist friend who, gasp!, is not licensed by the state to cut my six-year-old’s hair? These licensure requirements are absurd on their face and stand in the way of people using their talents to gain a little independence. We should support legal changes to make it easier to start small business operations while voting with our dollars in support of those who already model such virtues. As Lincoln so nobly said, “Such community will be alike independent of crowned-kings, money-kings, and land-kings.”