H-Net Review [H-FedHist]: Brannon on Cost, 'The Price of Greatness: Alexander Hamilton, James Madison, and the Creation of American Oligarchy'

Andrew Stewart

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Subject: H-Net Review [H-FedHist]:  Brannon on Cost, 'The Price of Greatness: Alexander Hamilton, James Madison, and the Creation of American Oligarchy'
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Jay Cost.  The Price of Greatness: Alexander Hamilton, James Madison,
and the Creation of American Oligarchy.  New York  Basic Books, 2018.
256 pp.  $27.00 (paper), ISBN 978-1-5416-9746-1.

Reviewed by Rebecca Brannon (James Madison University)
Published on H-FedHist (August, 2021)
Commissioned by Caryn E. Neumann

_The Price of Greatness_ is a tightly written (short) book that takes
on a difficult subject. As Jay Cost notes in the introduction, James
Madison's evolution over time from an advocate of greater federal
power to an avowed opponent of projects of federal strength is either
mystifying or hypocritical, depending on your perspective. Cost
argues that Madison's progression from Federalist and ally of
Alexander Hamilton to staunch opponent of centralized fiscal power
was motivated by his concerns for ensuring all people equal access to
and benefit from their government. All along his concern for checks
and balances was part of a system determined to stymie government

Jay Cost is a conservative pundit and writer who left the Republican
Party in 2016 over the nomination of Donald J. Trump for president.
This work tries to understand how on earth we came to this moment in
American politics and life. When the book came out in 2018, it
clearly attempted to explain how the tensions existent in the
American democratic experiment from the very beginning have only
inflated since the founding moment. Cost paints a path from the fight
over oligarchy in the eighteenth century to the moment that brought
seemingly improbable pseudo-populist leader Trump to the highest
office in the most powerful country in the world. The events since
then, including the occupation of the Capitol in January 2021, have
only made these questions more urgent. Perhaps the founders did not
have wonderful solutions to the inherent tensions between the needs
of the people and the lure of federal power for elite
self-protection. Perhaps only luck kept us from always being a very
stratified and unequal society rather than Thomas Jefferson's
imagined middle-class farmers' republic. After all, viewed in
hindsight, eras of extreme income inequality have been at least as
frequent as eras of muted inequality and a "middle-class" America.

This book comes at a moment when early American historians are
joining a wider scholarly community concerned with extreme income
inequality. Scholars such as Daniel Mandell and Terry Bouton have
delved into the myriad ways in which early Americans pushed for
economic equality and a fundamentally middle-class, owner society for
white men. [1] Most early Americans did not want a winner-take-all
society. Furthermore, they saw it as incompatible with their vision
of a participatory democracy. Early Americans were suspicious of not
just monarchy but also concentrated financial power. Early Americans
followed a long line of early modern English and German thinkers who
considered elite wealth concentration a great threat to the rights of
all. With great wealth--or the possibility of great wealth--came
elite power determined to advantage the few at the expense of the
many. For many of these people, the American Revolution was a
revolution in favor of human, or at least white male, equality. They
fought in order to bring a more equal society into being.
Pennsylvanians, long known for living in the best poor man's country,
wrote a revolutionary-era constitution that epitomized the movement.
Power was placed in a unicameral legislature to best represent the
people. There was no upper house to "contain" the lower sorts or
protect elite interests. Democracy required income equality to work.
Otherwise, the elite would hoard opportunity for themselves at the
expense of both everyone else and the health of the democratic
government itself.

Desperate times lead to desperate intellectual measures. Jay Cost has
emerged from a conservatism that promotes not just free markets but
market absolutism to rediscover a long-standing, home-grown
skepticism of elites and their capture of market opportunities
through coercive control of the mechanisms of power. The title of the
book frames the real question--how did we end up with an oligarchy
instead of a thriving democracy? Is this an inevitable cost?

Cost chooses to consider two allies and frenemies who co-wrote the
_Federalist Papers_ and thereby shaped a powerful vision of a strong
federal government--only to diverge in the following decades. In so
doing, Cost tries to move beyond the idea that the prominent founding
fathers were opposed to the most egalitarian impulses of the
Revolution in order to bring them into the conversation about the
value, and limits, of economic equality. In so doing, he has to
grapple with the reality that many of the early national elite were
indeed galvanized by the chance to use their control of government to
line their own pockets. He quotes a senator from Pennsylvania who
resented this devolution from the ideals of the Revolutionary moment.
The Constitution "raised a singular ferment.... Every one ill at ease
in his finances; everyone out at elbows in his circumstances; every
ambitious man, every one desirous of a shortcut to wealth and
honors." And everyone saw how the Constitution could "be wrought to
their purposes," with chances at government sinecures of all kinds
(pp. 75-76). Cost shows how James Madison was alarmed by real-life
examples of government capture, including speculators (including
almost all of Congress) voting for the government to pay back debt at
full face value once they had snapped it up for shillings on the
pound. He was further alarmed by the financial panic of 1792, which
was caused by emboldened speculators trading on inside information to
try to corner the market on public securities. Investors felt no
moral hazard as long as they controlled the public purse. Why not
individualize the profits and nationalize the losses? Hamilton ended
up bailing out emboldened, and connected, speculators with government
money. As Cost shows, "the moneyed class acquired effective control
over the government, directing public affairs for its own ends rather
than the good of all" (p. 75). It had taken less than five years from
the adoption of the Constitution to the possibility of ruinous
government capture.

If this sounds all too familiar, consider that the point of this
trade press book is to speak to where we are today. Cost's dilemma is
what he sees as Madison's--what to do when you support strong federal
government, but see it as fully captured by oligarchy? Madison
famously invoked the realization that men are no angels in the
_Federalist Papers_. In Cost's hands, Madison's naivete led him to be
continually surprised and alarmed as things did not work out in his
favor. Yet was Madison ever really thus? He mistrusted abuses of the
government, but he also mistrusted financiers in general. His own
wealth came from landownership and the exploitation of the enslaved.
Of course he saw his interests as diverging from Hamilton's
commercial and industrial vision.

Cost is a careful scholar who struggles in assessing how far to carry
his own concerns about market concentration and market capture then
and now. One notable absence is any use of or reflection on the new
history of capitalism. This line of thought argues that slavery, not
free labor, was crucial to the development of America's financial and
industrial might. Scholars such as Caitlin Rosenthal and Edward
Baptist have shown how integral slavery was to the development of
modern American capitalism.[2] Cost also is torn about giving up
modern conservatism's belief that Hamilton's vision of a
market-oriented, commercial, industrial America was the right and
inevitable one. He therefore admires Madison's insights into the
limitations of our government structure but also keeps repeating that
he was ultimately wrong about the nation's direction. I am not sure
you can have both. Then there is the problem of Madison's presidency,
which historians usually handle by ignoring it ever happened. Cost
argues that Madison certainly made mistakes but in response generated
a new Democratic-Republican theory of government that merged
republicanism and liberalism. Cost believes that what he calls the
Federalist-Republican fusion worked reasonably well, but the tension
between risks of either oligarchy or a mob rule of united factions
remained. He briefly traces the nineteenth- and twentieth-century
history of the 1 percent bribing politicians for their own interests.
Government capture is reality.

Cost's real concerns are apparent in his language along the way. He
writes of a Republican Party as "an ideologically adrift coalition at
the end of the war, desperately in need of a new direction" (p. 135).
He is referring to the end of the War of 1812, but the description
fits the post-Iraq moment just as well. As a conservative, Cost sees
the "liberal project" as the underlying flaw that has allowed elite
capture of government support while divorcing the people from trust
in their government (p. 192). Needless to say, there are other
possible interpretations of why Americans mistrust their government
that do not depend on jettisoning the social safety net and
infrastructure investments typical of wealthy democratic nations in
the twenty-first century.

So what are the solutions? Cost does not really offer any. We are all
lost together. He calls for a return to a spirit of investment in our
shared democracy--a renewal of "the republican quality of government"
(p. 195). We should remember that our fates rise and fall together,
and act accordingly. The final paragraph reminds us that public
opinion--the opinion of the voters--is the ultimate check on
corruption. He offers no policy solutions or reassuring call to the
finer angels of our nature. Overall, Cost has offered a careful and
thoughtful history of how two influential theorists and writers of
the American Constitution thought about the complicated issues that
government needed to mediate. It is thin gruel for solutions.


[1]. Daniel R. Mandell, _The Lost Tradition of Economic Equality in
America, 1600-1870_ (Baltimore: Johns Hopkins University Press,
2020); Terry Bouton, _Taming Democracy: "The People," the Founders,
and the Troubled Ending of the American Revolution_ (New York: Oxford
University Press, 2007); Woody Holton, _Forced Founders: Indians,
Debtors, Slaves, and the Making of the American Revolution in
Virginia_ (Chapel Hill: University of North Carolina Press, 1999).

[2]. Caitlin Rosenthal, _Accounting for Slavery: Masters and
Management_ (Cambridge, MA: Harvard University Press, 2018); Edward
E. Baptist, _The Half Has Never Been Told: Slavery and the Making of
American Capitalism_ (New York: Basic Books, 2014). For an
interesting corrective sympathetic to the main aims, see Trevor
Burnard and Giorgio Riello, "Slavery and the New History of
Capitalism," _Journal of Global History_ 15, no. 2 (2020): 225-44.

Citation: Rebecca Brannon. Review of Cost, Jay, _The Price of
Greatness: Alexander Hamilton, James Madison, and the Creation of
American Oligarchy_. H-FedHist, H-Net Reviews. August, 2021.
URL: https://www.h-net.org/reviews/showrev.php?id=53686

This work is licensed under a Creative Commons
Attribution-Noncommercial-No Derivative Works 3.0 United States

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