Lessons from Alexander Hamilton

To the Editor:

Hopefully the popularity of the musical, “Hamilton,” will create more interest in the ideas of Alexander Hamilton, our first secretary of the treasury. The situation that he faced in the 1790s has many similarities to the one we are in today. Our federal government was broke, we had a large trade deficit and the economy was in the doldrums. Hamilton realized the importance of putting the federal government and the economy on a sound financial basis. Hamilton did understand that, one, the primary objectives of the government was to promote manufacturing and protect it from unfair for- eign competition.

The debate between the benefits of free trade and protectionism existed in Hamilton’s time. The most prominent academic economist of Hamilton’s time was the Englishman, Adam Smith. He extolled the virtues of free trade and opposed mercantilism. Hamilton realized that American manufacturers had to be protected against predatory European nations. Smith’s 18th century mercantilism has a 21st century face of foreign state- owned enterprises that do not have to make a profit; they just have to keep people employed.

Hamilton’s adversaries were free traders, such as the slaveowning Jefferson, who were perpetually in debt to foreign creditors, in spite of low cost labor. They were more con- cerned with maintaining their fancy standard of living than the long-term growth of the United States.

Hamilton would have realized that we cannot have a prosperous growing economy with a trade deficit that equals 2 percent of GDP. He would have used tariffs to protect American manufacturers, such as our steel companies, from dumping by the Chinese mercantilists. What Americans need in 2016 is a government run by people like Hamilton who said the objective of the government is to promote manufacturers. This will promote the long-term growth of our economy and the quality jobs that we need so badly. — Alan Brink, president, Spring City Electrical

Manufacturing Co.