Throughout the 1980 book The Elusive Republic: Political Economy in Jeffersonian America, Drew McCoy attempts to explore the competing economic visions in the U.S. during the aftermath of the Revolutionary War and how different leaders such as Thomas Jefferson, James Madison, and Alexander Hamilton had conflicting ideas regarding what economic system would be the most suitable for the newly independent nation. Hamilton advocated a commercialized economy in which manufacturing was fundamental. On the other hand, Madison and Jefferson felt that an agrarian economy would be best for the U.S. and would ensure its success as a nation. McCoy explores the relationship between political economy and morality and how this definition shifted during early American history. Furthermore, McCoy argues that the economic visions of Thomas Jefferson and James Madison were short-lived and that several factors prevented them from becoming permanent.
In the first chapter, McCoy discusses the debate during the 18th Century over economics and morality and how they would later influence the founding fathers. By the mid-18th Century, Europe was undergoing a commercial and industrial revolution that led to profound changes in its economic conditions. In addition, the rise of industrialization raised many questions about its effect on society and helped to alter the opinion regarding luxury goods. Since the middle ages, luxury was considered to be a corrupting influence in society and a danger to public welfare. However, the 18th Century marked a transitional period in the perception of luxury goods. As a result of increased materialistic impulses, some began to redefine the meaning of luxury and explore the societal implications of the increased emphasis on luxury goods.
McCoy describes the reaction to the changes in the economy by philosophers during the 18th Century. A major critic of the new social order was Jean-Jacques Rousseau. Rousseau argued that the commercialization of society would have a harmful effect on society and would promote a multitude of artificial needs and desires in men, to which they would become enslaved. Furthermore, Rousseau felt that the drive for status and wealth would never fully satisfy individuals and that it would increase social inequalities. In contrast, David Hume defended the commercialization of society that came as a result of the industrial revolution. Hume argued that the advancement of commerce, mechanical arts, liberal arts, and fine arts were interdependent on one another. As a result of their interconnection, Hume argued that the advancement of commerce would be beneficial to society by establishing a more refined culture. The differences in opinion regarding the growth of commerce and its effects on society would soon influence the debate in post-Revolutionary America over which type of political economy would develop in the new country.
McCoy first discusses the economic ideas of Alexander Hamilton, who served as Treasury Secretary under George Washington. The political economy of Hamilton advocated an aggressive expansion of American commercial interests and the development of a strong manufacturing sector with the cooperation of a strong federal government. Hamilton’s economic plan called for a funding of the national debt and the incorporation of the Bank of the United States, which would help the new government establish its credit and encourage the investment of private capital in the development of a commercial sector. Hamilton viewed the development of commercial relations with Great Britain as a way to supply America with the capital and credit that could ignite the economic growth that he envisioned .
Additionally, Alexander Hamilton felt that a manufacturing economy was a sign of social progress and that the social inequalities resulting from it were inevitable. Proponents of the Hamiltonian system argued that a growing manufacturing sector would also increase individual liberty by giving people more freedom in choosing an occupation. Hamilton’s economic policy was further pushed forward by the Jay Treaty, signed between the U.S. and Great Britain in 1794. In addition to averting a major war between both countries, the Jay treaty opened up limited trade between the U.S. and several of Britain’s colonies. The resulting increase in foreign trade helped to fuel further the commercial revolution and made its eventual spread to the U.S. increasingly inevitable.
In contrast to Alexander Hamilton, James Madison advocated a political economy that focused on agriculture and the growth of a household goods industry as opposed to rapid commercialization. The main component of Madison’s political economy was westward expansion and national development across space rather than across time. By encouraging a spread across western lands, Madison argued that the U.S. would remain a nation of industrious farmers who could market their surplus crops overseas to purchase manufactured goods from Europe. As a result, America could remain a young and virtuous country and at the same time offer a market for advanced manufactured goods from Europe. Unlike Hamilton, Madison believed that the rise of industrialization in countries such as Great Britain was a sign of moral and societal decay. He concluded that Hamilton’s plan threatened to subvert the principles of republican government and would lead to the “Anglicization” of the American government.
McCoy then goes on to describe the political and economic aspirations of Thomas Jefferson after his election in 1800. Jefferson described his election as a return to the original values and ideals of America that were overturned and repudiated under Federalist rule. The main aspects of Jefferson’s political economy included his advocacy of western expansion as a way to encourage the continued strength of a primarily agrarian economy; a relatively liberal international commercial order to offer markets for American agricultural surplus; and a reduction in government spending and the national debt. Through such steps, Jefferson sought to evade the social corruption of an increasingly commercialized society and preserve the republican vision of American society. Jefferson’s political economy was enacted through the Louisiana Purchase of 1803. By purchasing the Louisiana territory from France, Jefferson hoped that the addition of new lands would preserve the agriculture-based U.S. economy and add to his notion of a continuously expanding “empire of liberty” across the western hemisphere.
McCoy main thesis in “The Elusive Republic” is that the political economy advocated by Thomas Jefferson and James Madison ultimately failed and was not realized in the long term. Overall, the basis of his argument is strong and is based on several key factors. The first two factors were the outbreak of the wars resulting from the French Revolution in 1792 and the signing of the Jay Treaty in 1794. Despite the widespread belief that European demand for American exports would decline as a result of the wars, it instead increased dramatically after 1792. McCoy argues that the wars resulting from the French Revolution marked a major turning point in the American economy because it made it profitable for Americans to export goods and materials to Europe. Additionally, the Jay Treaty helped to open the door to increased international trade and cemented America’s economic ties with Great Britain.
Furthermore, McCoy argues that the Louisiana Purchase augmented the spread of slavery and in turn, undermined the political economy of Jefferson and Madison. Despite the fact that the Louisiana Purchase removed several obstacles to the realization to Jefferson’s republican vision, it also exposed some of the contradictions within his vision. For example, the supporters of Jefferson frequently boasted of the isolation and independence of the U.S., but in reality American republicanism depended on both an open international commercial order and the absence of any competing presence in North America. The U.S., McCoy argues, could isolate itself from foreign influences only if it were to resign itself from international trade and westward expansion (204). In addition, the Louisiana Purchase fueled the spread of slavery as the U.S. expanded westward. The Jeffersonian political economy had hoped by the controlled exploitation of land would reduce the need for slavery and that it would eventually die out. In reality, the demand for slave labor increased dramatically as the agricultural industry expanded westward (252).
In conclusion, Drew McCoy explores the competing economic visions in early America in The Elusive Republic: Political Economy in Jeffersonian America. The major figures in the debate over political economy in America were Alexander Hamilton, James Madison, and Thomas Jefferson. Ultimately, the political economy of Jefferson and Madison did not come to define the U.S. in the long-term, and several diverse factors prevented it from becoming permanent. Furthermore, McCoy discusses the implications of the shift towards a highly commercialized economy and the changing moral beliefs regarding luxury goods throughout the 18th and early 19th Centuries.
