Lawyer, soldier, journalist, statesman, and economist: Alexander Hamilton is widely recognized as one of the most talented men of his generation, but he rarely receives sufficient credit for his legacy as a strategist. By championing robust federal institutions and leveraging his country’s economic power, Hamilton formulated a grand strategic approach that would counter European adversaries by cementing American regional hegemony.
To understand Hamilton’s grand strategy, one must first recognize that, during the late 1700s, the North American geopolitical environment was particularly unfavorable for the newly independent United States – a fact Hamilton makes plain throughout his writings. [1] Great Britain had ceded the Northwest Territory to the new country as a part of the Treaty of Paris, but the British refused to abandon their strategic forts on the frontier and kept a formidable presence in Canada. Further west, Spanish claims stretched from the modern-day U.S.-Canada border to the Tierra del Fuego; Madrid also controlled Spanish Florida and the Louisiana territory. Each power sought alliances with hostile Native American tribes to prevent America’s western expansion. And, although France had relinquished its territorial claims in the aftermath of the French and Indian War, it maintained a substantial commercial footprint in North America. If the new nation was to become a great power or, more modestly, even preserve its newly-won independence, it would need to navigate a precarious geopolitical environment.
Because he recognized these geopolitical constraints, Hamilton, perhaps more so than any of his American contemporaries, emphasized power dynamics as the chief variable in international relations. “The rights of neutrality will only be respected,” he asserted, “when they are defended by an adequate power. A nation, despicable by its weakness, forfeits even the privilege of being neutral.” [2] Hamilton was clearly alarmed by his country’s lack of an “adequate power:” throughout The Federalist, his arguments in favor of the new constitution emphasized the nation’s weakness under the Articles of Confederation. The confederation’s lack of a centralized authority left it without “troops, nor treasury, nor government,” and this weakness left America acutely vulnerable to foreign threats. [3]
Hamilton’s answer to the country’s inauspicious strategic situation lay in the creation of robust federal institutions. In his mind, institutions, or “organs” of government, functioned as both gauges and instruments of national power. Without an “adequate power” – and, by necessary extension, robust institutions that could effectively wield that power – the nation would remain vulnerable to foreign coercion or invasion.
This dual focus on national power and institution-building sits at the core of Hamilton’s argument in The Federalist, serving as the foundation of his grand strategic thought. If the newly independent states were to remain sovereign and become more powerful, he believed, they would first need to unite under a robust federal government, led principally by a strong executive. Only then could the American nation develop and leverage powerful institutions, including a capable navy, a domestic manufacturing base, a national bank, and a flourishing merchant marine, to resist and deter European coercion while ensuring sustained growth. If it could hold off its European competitors, the country would eventually grow powerful enough to assert control over its near abroad, granting it regional hegemony and a place among the world’s great powers.
An Energetic Executive
Consequently, the first item on Hamilton’s grand strategic agenda was forging a new federal government capable of defending the nation from external enemies. This goal grew out of his political philosophy. Due to the critical importance of “providing for the common defence,” he explained in “Federalist No. 23,” a government must always retain ample power to respond to national emergencies:
Powers [related to national security] ought to exist without limitation; because it is impossible to foresee or to define the extent and variety of national exigencies, and the correspondent extent and variety of the means which may be necessary to satisfy them. The circumstances that endanger the safety of nations are infinite; and for this reason, no constitutional shackles can wisely be imposed on the power to which the care of it is committed. [4]
Hamilton reveals in this passage the logic behind his desire for a strong national government. If government exists first and foremost to preserve the integrity of the social compact, and threats to national survival are impossible to anticipate, then implementing “constitutional shackles” that may interfere with this responsibility is as imprudent as it is nonsensical. To faithfully perform the duties associated with national security, he explains, “the means ought to be proportioned to the end.” [5]
Hamilton’s desire for a robust national government that could resist coercion and defend against foreign threats naturally led him to argue for a powerful executive department. However, the executive he had in mind would have wielded significantly more power than Article II of the Constitution ultimately provided. In a 1780 letter to James Duane, for instance, Hamilton presented his preferred executive as an elected governor-for-life, his standing contingent on good behavior. [6] Though this proposal predictably failed to gain much traction, shades of his preferred executive can be seen in his argument for an “energetic executive” in The Federalist. [7] A unitary executive, Hamilton explained, would provide “decision, activity, secrecy, and despatch” – attributes crucial to the successful conduct of foreign policy and war. [8] “Of all the cares and concerns of government,” he continued, “the direction of war most peculiarly demands those qualities which distinguish the exercise of power by a single hand.” [9] Hamilton envisioned an executive that would play a leading role in national security affairs, making it the preeminent institution responsible for stewardship over the levers of American power.
Economic Statecraft & its Institutions
Beyond his appeals for a robust national government and a powerful executive, Alexander Hamilton sought to cultivate the nation’s economic power which, in his mind, underpinned both American national security and sustained growth. Power without revenue, after all, was only nominal. Hamilton envisioned a set of economic, commercial, and financial institutions – including a flourishing merchant fleet, a domestic manufacturing base, and a national bank – that would channel and multiply the nation’s economic power. In addition, he felt comfortable wielding economic tools to accomplish geostrategic ends. This tendency, coupled with his desire to forge a robust American union, has led scholars to accurately classify Hamilton as an economic nationalist.
He “was certainly a nationalist,” writes scholar Edward Mead Earle, “and he certainly believed in using economic policy as an instrument of both national unification and national power.” [10] Hamilton’s firm belief that economic power is a crucial component of national power remains one of his foremost contributions to the American strategic canon.
Despite his willingness to meddle in the economic sphere, however, Hamilton remained a staunch market capitalist. He “was emphatic in his commitment to private enterprise and to a market economy,” historian Forrest McDonald claims. [11] A closer look at Hamilton’s writings verifies McDonald’s assessment. In “Federalist No. 12,” for instance, the New Yorker endorsed market capitalism for introducing “human avarice and enterprise” as a way to “vivify and invigorate all the channels of industry.” [12] And, as Thomas G. West notes, many of Hamilton’s points in his Report on Manufactures paraphrase arguments made by Adam Smith, including his emphasis on the domestic manufacture of supplies essential for national defense. [13] For Hamilton, a commitment to market capitalism was more than compatible with economic nationalism.
Examining Hamilton’s approach to international trade helps clear up potential contradictions in his economic views. In principle, as treasury secretary he supported a system of free trade between nations. “If the system of perfect liberty to industry and commerce were the prevailing system of nations,” then “a free exchange, mutually beneficial…might be carried on between them,” he explained in his Report on Manufactures. But such a system “is far from characterising the general policy of nations,” he continued. Since the European powers relied on trade barriers to protect domestic markets and industries, playing strictly by the rules of free trade would leave America at a significant disadvantage. To overcome economic obstacles, Hamilton concluded, American leaders would need to take matters into their own hands: “‘Tis for the United States to consider by what means they can render themselves least dependent, on the combinations, right or wrong of foreign policy.” [14] While he favored a system of free trade, Hamilton’s acknowledgement that the commercial playing field was anything but level led him to embrace protectionist measures on strategic grounds.
One specific measure involved the use of trade barriers to play European competitors off one other. In the late 1780s, the United States remained a newly independent country lacking any significant industrial capacity. While Hamilton found this shortage of domestic manufacturing deeply concerning, he also recognized that the nation’s growing markets granted it tremendous geoeconomic leverage. “By prohibitory regulations,” he explained, “we may oblige foreign countries to bid against each other, for the privileges of our markets.” If the United States had a government “capable of excluding Great Britain” from American markets, the country could use its leverage to negotiate for valuable commercial privileges. [15] Hamilton’s use of economic tools to pursue strategic objectives is a hallmark of what is today referred to as economic statecraft.
The Industrial Base
Hamilton’s economic statecraft and strategic focus on institution-building converged in his insistence that the country build a robust domestic industrial base. Indeed, his 1791 Report on Manufactures was drafted chiefly with a view toward “render[ing] the United States, independent on foreign nations, for military and other essential supplies.” For Hamilton, building a secure and reliable domestic industrial base was nothing less than a national security imperative:
The independence and security of a Country, appear to be materially connected with the prosperity of manufactures. Every nation, with a view to those great objects, ought to endeavour to possess within itself all the essentials of national supply. These comprise the means of subsistence, habitation, clothing, and defence.
The possession of these is necessary to the perfection of the body politic, to the safety as well as to the welfare of the society; the want of either, is the want of an important organ of political life and Motion; and in the various crises which await a state, it must severely feel the effects of any such deficiency. [16]
Given the nation’s relative weakness and fraught geopolitical situation, American leaders could not rely on European suppliers during a foreign invasion or any other national emergency. Hamilton’s solution, presented in the remainder of his report, was to rapidly build up the nation’s industrial capacity, with a focus on essential industries related to “subsistence, habitation, clothing, and defence.”
Hamilton’s argument on this point was informed by theory as well as experience. As Earle points out, Adam Smith presents a similar argument in favor of the domestic manufacture of essential supplies in Book IV of The Law of Nations. [17] Beyond Smith’s theory, Hamilton bolsters his argument by citing the colonists’ experience during the Revolution: “The extreme embarrassments of the United States during the late War, from an incapacity of supplying themselves, are still matter of keen recollection,” he wrote. “A future war,” he added, “might be expected again to exemplify the mischiefs and dangers of [such] a situation.” [18] As with many of his projects, Hamilton’s attempts to bolster the country’s industrial base sprung partially from concerns regarding how the country would fare in a future conflict.
Sinews of War: The National Bank
Hamilton’s national bank plan serves as another example of an economic project undergirded by a dual concern for national security and future growth.
First, he explained, a bank would be an essential provider of short-term loans in the case of war or invasion. [19] Second, as Richard Sylla and David J. Cowen have noted, the treasury secretary considered a national bank a necessity if the United States was to compete with European great powers. “Hamilton stressed that all the great powers of Europe possessed public banks and were indebted to them for successful trade and commerce,” they explain. His “implication was clear: if young America wanted eventually to join the ranks of the elite powers, it too must create a banking infrastructure.” [20] Hamilton’s national bank plan constituted yet another part of his grand strategic plan for guarding against foreign threats while ensuring sustained growth.
Hamilton’s insistence that the new nation become a commercial republic was central to his economic and grand strategic vision. In “Federalist No. 11,” he identifies the country’s navigable waterways, abundant supply of natural resources, and favorable geographic position as factors that pointed to America’s rise as a commercial power. [21] To Hamilton, ensuring that the country became a flourishing commercial power – rather than an agrarian society of republican small farmers, as Thomas Jefferson preferred – was integral to the country’s sustained growth and ability to defend itself. By extension, increased commercial activity also meant additional revenue to bolster a sorely underfunded government. Collecting imposts and customs duties would allow the nation to fill its treasury without levying burdensome taxes on the populace. [22]
Power Projection: The Navy and the Merchant Marine
Hamilton was also an early advocate for the creation of a federal navy, an institution he supported on economic, political, and strategic grounds. In addition to protecting American commerce, he argued, a navy would strengthen the bond of union between the states. “It would embrace the resources of all,” he explains, as wood, naval stores, and iron would be furnished by the southern and middle states, while sailors would be drawn primarily from New England. [23] In Hamilton’s mind, such an arrangement would foster commercial ties while cultivating a sense of national unity between the states – another clear example of his economic nationalism.
Hamilton also advised that a navy of even “respectable weight” might offer tremendous geopolitical utility. Beyond a navy’s obvious role in protecting America’s ports and coastline from piracy and foreign invasion, he proposed a creative, geopolitically savvy role for American naval forces as well: through targeted naval interventions and offers of foreign aid, a mid-size American navy could play a deciding role in ongoing European naval conflicts in the West Indies. “A few ships of the line, sent opportunely to the reinforcement of either side, would often be sufficient to decide the fate of campaign,” while America’s relative proximity to the West Indies meant it could strategically offer military supplies during such a conflict. Hamilton hoped these interventions might “incline the balance of European competitions” in the Caribbean, creating commercial and geopolitical leverage his country could exploit to sustain growth and compete with the European powers. [24]
The Long Game: Regional Hegemony
Having proposed American intervention in European conflicts in the New World, Hamilton took his argument a step further, revealing the telos of his strategic vision. “By a steady adherence to the union,” he explained, “we may hope, ere long, to become the arbiter of Europe in America; and to be able to incline the balance of European competitions in this part of the new world, as our interest may dictate.” [25] Hamilton’s argument on this point reveals the ultimate objective of his grand strategy: a desire to wrest control of the country’s near abroad from its European competitors. Given European opposition to American growth, he believed, this goal was a necessary step to guarantee the nation’s security. Nearly four decades later, this objective would form the strategic rationale for what eventually became known as the Monroe Doctrine.
From the standpoint of grand strategy, Hamilton’s ambitious dream of American regional hegemony and commercial dominance set him apart from the rest of America’s founding fathers. Hamilton, more so than his contemporaries, realized that preserving the new country’s independence would require a strong national government equipped for great power competition. By lobbying for federal institutions capable of both wielding and increasing national power, he forged the tools that could preserve his country’s freedom of action. Meanwhile, the nation’s commercial acumen would grow its economic power and influence, but competing successfully meant readily employing economic tools for strategic purposes.
Hamilton’s example demonstrates that grand strategy, at its core, involves the linking of strategic vision with power, or means. Power is channeled through and exercised by institutions. But these institutions are not finite; statesmen can either nurture them or allow them to erode. Hamilton’s fine grasp for strategic realities is an important part of the American tradition, and as the United States enters a new era of great power competition, we would be well-served to recover his example.
Brady Helwig was President of the AHS Chapter at Hillsdale College, where he studied politics with an emphasis in strategy and statesmanship. He graduated in May 2021, completing a senior thesis on Alexander Hamilton’s grand strategic thought.
Notes:
[1] Alexander Hamilton, “Federalist No. 11,” in The Federalist: The Gideon Edition, ed. George W. Carey and James McClellan (Indianapolis: Liberty Fund. Inc., 2001), 52-54. Hamilton’s Federalist essays will be cited from The Gideon Edition throughout.
[2] Hamilton, “Federalist No. 11, 51.
[3] “It is in vain to have good plans if there are not proper organs of execution,” Hamilton noted. The Papers of Alexander Hamilton, ed. Harold C. Syrett, et al. (New York: Columbia University Press, 1961-1987), Vol. XXIII: 327. The Papers of Alexander Hamilton will be abbreviated as ‘P ‘ throughout.
[4] Hamilton, “Federalist No. 15,” 69.
[5] Hamiliton, “Federalist No. 23,” 113.
[6] Hamilton, “Federalist No. 23,” 113, emphasis Hamilton’s.
[7] Hamilton, P: II, 404.
[8] In “Federalist No. 71,” Hamilton makes a decidedly overt reference to his president-for-life plan. See 372.
[9] Hamilton, “Federalist No. 70,” 363
[10] Hamilton, “Federalist No. 74,” 385.
[11] Hamilton, “The Continentalist No. IV,” P: II, 671.
[12] Edward Mead Earle, “Adam Smith, Alexander Hamilton, Friedrich List: The Economic Foundations of Military Power,” in Makers of Modern Strategy: From Machiavelli to the Nuclear Age, ed. Peter Paret (Princeton: Princeton University Press, 1986): 232.
[13] Forrest McDonald, Alexander Hamilton: A Biography (New York: W.W. Norton & Company, 1982): 235.
[14] Hamilton, “Federalist No. 12,” 55.
[15] Thomas G. West, The Political Theory of the American Founding: Natural Rights, Public Policy, and the Moral Conditions of Freedom (Cambridge: Cambridge University Press, 2017), 380-381.
[16] Hamilton, Final Version of the Report on the Subject of Manufactures, P: X, 264.
[17] Hamilton, “Federalist No. 11,” 50.
[18] Hamilton, Report on Manufactures, 291.
[19] Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (New York: Modern Library, 1909), Bk. IV, Ch. 2, 430-431, quoted in Earle, “The Economic Foundations of Military Power,” 224.
[20] Hamilton, Report on Manufactures, 291.
[21] Hamilton, Opinion on the Constitutionality of an Act to Establish a National Bank, P: VIII, 124.
[22] Richard Sylla and David J. Cowen, Alexander Hamilton on Finance, Credit, and Debt (New York: Columbia University Press, 2018), 119.
[23] Hamilton, “Federalist No. 11,” 51-52.
[24] Hamilton addresses this topic at length in “Federalist No. 12.” See 55-60.
[25] Hamilton, “Federalist No. 11,” 53.
Image: “Alexander Hamilton, from John Clark Ridpath et al, ‘Life and Work of James G. Blaine’, 1893” by Political Graveyard, retrieved from https://flickr.com/photos/36380617@N06/8751752810, used under Creative Commons Attribution-NonCommercial-NoDerivs 2.0 Generic license (http://creativecommons.org/licenses/by-nc-nd/2.0/).
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