The Problem of Jefferson: Just What Kind of an Economic Developer was he? See elkins the yeoman and then elkins the populist and let’s start jefferson’s presidency off with a better understanding of what he really was. Not what he said, watch what he did–or didn’t do.
Jefferson in Yeoman Farmer and Populist–Just What did he think About ED and how did he act
We are damned if we do; and damned if we don’t. Every so often history changes so profoundly that we have to inject context into our history of economic development. The victory of Jefferson in the 1800 election was momentous, not much appreciated today. The slaveholders took power and wouldn’t let it go for over a quarter of a century, only to see another set of slaveholder presidents dominate for the greater part of the following quarter of a century. History textbooks, aware we are on the road to the Civil War, focus heavily on slavery, cotton plantations and their expansion into the western interior–and the rise of northern opposition to slavery and its expansion. Important and morally paramount to be sure, but I must gently chide the authors that much else was going on–and much of that was hugely important to our economic development history. As budding industrialization, a transportation infrastructure transformation , completed with regionally unbalanced urbanization, and the increasing onslaught of regionally unbalanced immigration, and the emerging of new forms of capitalist managers and organizations are gathering steam in this period–and usually get lost in the shuffle. There is a great deal of federal, state and local economic development history that needs to be told. It is my sad lot in life to focus this history into topics so vastly ignored and politically incorrect, out of tune with the national debate as I write these words. Oh woe is me. So onto the first layer of “context”.
This is the period which I label as the Tidewater/Virginia Dynasty or Ascendancy. It had been on the rise since 1792 and it scored a decisive victory–often called a realignment–in the 1800 elections. With one exception, every president in this period was Virginian. More about J.Q. Adams later. While the Dynasty will change internally, the period persists through 1828–when Andrew Jackson arrives on the scene. The Federalists were booted out of national dominance; their tribal consensus, so fragile, so brief, shattered almost totally–and their iconic hero and charismatic source of cohesion, George Washington, dead in the last days of December 1799. The Federalist tribe did not die out all at once; it was a strong regional power (the North and New England especially), but even in state and local elections it was challenged by Jefferson’s Tribe, the Democrat-Republicans (D-R).
The D-R’s had rose to power surfing the last hurrah of the populist revolution that had thrust us into the Revolutionary War of Independence. As Jefferson took his Oath of Office in 1801, yet another cultural convulsion, known to us as the Second Great Awakening, had begun and by the 1820’s for sure, its effects will be noticed in our history. During the Virginia Dynasty period, an important generational change will also occur, as the Revolutionary War generation left the scene to its children. The Virginia Tidewater Ascendancy is very much an Era meaningfully different from that of Washington, Founding Fathers, and post-colonial national transition in a democratic capitalist republic. In this era despite the bombast of the era, we are less transitioning away from an past, than moving spasmodically, a bit unconsciously, into an little understood future. And for the first half of the Virginia Dynasty it must confront hostile global pressures which threatened out political independence. We will have to fight a “second war of independence” before we will possess the confidence, cohesiveness and capacity to move more boldly into the new world. Hard as it may be, the reader should insert the vulnerability that most Americans felt, and its leadership certainly recognized, even its War Hawks, that characterized the first half of the Dynasty period. Remove the vulnerability and the genie is let out of the bottle.
Virginia Tidewater Presidents are considerably more complex than we may realize. But let’s not get ahead of ourselves. Suffice it to say, these fine folk exerted a considerable impact on the evolution of MED; community development will make its first major appearances on our stage during this period. Equally important, the Jacksonian deluge that awaits (post-1828) will be more understandable if we know how the Tidewater Virginia presidents evolved during this period. To give a slight hint: “states-rights” will be ever more prominent, so will limited government, and paradoxically the federal government will remain a commanding, if frustratingly inadequate, player in S&L ED. Under the Federalists–and the Tidewater Democrat Presidents–the federal government was an active player in S&L ED. That only ended with Jackson. By 1828, the Tidewater Dynasty under its Massachusetts president (J.Q. Adams) will walk, talk and even smell like a Federalist than its 1800 Jefferson would ever care to admit.
The Second Contextual Layer
Cotton was not yet “King” in this period.The real rise of the Cotton Belt was after the War of 1812. Indeed, South Carolina state government until 1808 was dominated by Federalists and coastal non-cotton planters/Charleston merchants. Most of what we know today as the United States lay, in 1801, under European control. From Florida to California, to Washington State–and everything West of the Mississippi was part of someone else’s imperialistic empire. Westernization (Washington’s ED plan), i.e. American settlement of east of the Mississippi territories had commenced, and would become steroidal after 1800. That meant, however, new political forces and dynamics were on the rise, and the threat real and imagined of new balances of power in the Congress, and enhanced regional (North-South) tensions. Ironically, those tensions rising in the West proved a mixed bag indeed, as a redefined Federalism complete with a resurgent federal leadership in economic developed would emerge midstream in the Tidewater Virginia dynasty–led by none other than a Tidewater Virginia migrant to Kentucky, Henry Clay. It is easy to content ourselves with detailing the goings on at the federal level, such as they were, but still waters ran deep and the shifting sands (I love these mixed metaphors, don’t you) of migration and economic change was reshuffling the political deck of cards with each passing year and event.
While the French Revolution had subsided, the Napoleonic (European) Wars were in full fury. Trade embargoes and freedom of the seas were easily the dominant foreign policy issues of the Jefferson and first Madison administrations. Economic development, in their shadows until 1816, reeled from these foreign pressures that forced a great internal transformation of critical importance to our future. Yet, for most of this period the world was engaged in a Great War, seemingly without end–a war that ended America’s entry into it on the side of France, Napoleon’s defeat, and the near simultaneous defeat of England at New Orleans by Andrew Jackson (1815) which negated the consequences of having chosen the wrong side in these wars. Jefferson in practice, was more restrained than Washington, but still sympathetic on the whole to manufacturing–and France. His proverbial hatred of banks was tempered, and not endorsed by his successors, Madison and Monroe. In short, Tidewater Democrats, despite a hard Jeffersonian start, were by no means “Never-Federalist Resisters”. MED in Jefferson’s mind, as it had with Washington, became linked closely to national defense, as economic growth and transcontinental expansion injected American soft power to counter European military dominance.. Tidewater Democrat presidents even held their nose as they used, and watched others use in prolific volumes, the state-chartered corporation. Theirs would be the golden age of the state-chartered corporation and even “implied powers”. Ideology usually succumbs to reality.
Jefferson enjoyed control over both Houses of Congress throughout his two administrations. In his first Congress Jefferson opined: “We have a commanding majority in the House of Representatives (68-37), and a safe majority in the Senate (18-14)  Noble E. Cunningham Jr., the Process of Government Under Jefferson (Princeton University Press, 1978), p. 273. In Jefferson’s last Congress D-R totaled 109 and Federalist 39; the Senate was 35-9 (Ohio had been admitted). This fluctuated in each of the Congressional sessions, but the Federalists were unable to mount a sustained counter to D-R dominance over the federal government. Still, party identification divided Congressional decision-making, and exposed a serious partisan divide that belied the numbers. This was nothing new as the D-R in the minority, except for one session, always served as a major check to Federalist dominance. Having said this internal division within the D-R was always an issue as the D-R did reflect different regional and state distinctions. As time went on, a sizable D-R faction, a sort of “Tea Party” would fester, chafing under some of Jefferson’s and Gallatin’s actions, but would not formalized into a D-R “old Republican” faction until Madison was president. These folk were true Anti-Federalists, state’s righters, and resistant to any expansion of “federal implicit powers”. But Jefferson secured the removal of Randolph–the de facto leader of the Old Republicans– from his Ways and Means Chair when the latter openly criticized Administration decisions. The Senate, of course, elected by the state legislatures, were often cross-pressured in ways and degrees not felt by the House.
The disruption cause by the Vice-Presidential electoral debacle was more a Federalist attempt to defeat Jefferson than an internal D-R insurgency. Burr would continue to be a “burr” in Jefferson’s side throughout the first administration–and it will seriously complicate Jefferson’s approach and implementation on his “westernization” strategy–expansion, settlement and access to the trans-Appalachian and continental west. Jefferson, in his first inaugural address (March, 1801) almost shockingly, given the blistering temper, vitriolically, and ideological/partisan polarization of the 1800 election deferred any attempt to roll back controversial elements of the Federalist past legislation. Rather he called for reconciliation: “we are all republicans; we are all federalists” he claimed. On major points of electoral division, Jefferson’s address took a rhetorical middle ground, and defused passions. This is very important in that his realignment victory clearly offered him a mandate to repudiate the Hamilton Bank and the public credit/debt system–and the Navy against which he had campaigned. Privately, however, he tasked his Secretary of Treasury, Albert Gallatin to investigate the bank with a “mind to find something to close the sucker down” (my words). Gallatin, not inclined to close the bank anyway, reported back to Jefferson the bank was well-run and its disruption would not only hurt the national interest, but restore a measure of unity to the Federalists. The National Bank then would continue, until its term expired in 1811.
While seemingly an odd tangent in our introductory context, the brisk, surprising abandonment of the key issue that had in fact launched the D-R Tribe into its existence, was arguably among the most important and critical economic development actions of the entire two Jefferson administrations. While he campaign and was seemingly elected on the slogan of “Revolution in 1800”, in eight words in his very fist public presentation of his administration Jefferson deferred to, and essentially adopted, the economy and economic institutions established by his arch-enemy Hamilton, and the principal plank of Washington’s first Federalist administration whose overthrow constituted the heart and soul of the Revolution of 1800. Jefferson and the D-R Tribe would not abandon nation-building institutionalization installed by the Federalists, but would instead, despite a better part of a decade in opposition to it, use it to their purposes, and simply move on. The man who had earlier called any attempt by the State or Virginia to establish a state bank as an act of treason, would silently preside over nationwide state-building institutionalization that created such banks, and other state-chartered corporate entities with ever-increasing momentum. By the time he left office in 1809, there were about 100 state-chartered banks in operation  Thomas Fleming, the Great Divide, Da Capo Press, 2015), . Any hope of meaningfully stepping back from an advancing and diffusing capitalist economy, to protect if not advance the interests of the “yeoman farmer”, or satisfying the demands of populist insurgency such as the Shay’s and Whisky Rebellions on which he had rode into office, was simply dismissed in a sentence. “Whatever”!
To be honest, the reader should understand I am at a loss for words to express how important those eight words are to the course of our economic development history.
A classic of American economic history (if oft-times controversial today) is Joseph Dorfman’s, the Economic Mind in American Civilization (1946) . In that tome, Dorfman describes Jefferson as “anti-Hamiltonian out of supreme [i.e. presidential] office , becoming in good part Hamiltonian as President” . Bruchey agrees: “In both his public pronouncements and official acts we see a President desirous of furthering the nation’s economic development” . The essence or take away the reader might glean from this inconsistency is that despite the rhetoric and its inconsistency in governance, the Tidewater-Virginia dynasty through 1828 was in my view, Federalism-lite. The Tidewater-Virginia dynasty is not at all comfortable with Hamilton’s heavy-duty Federalism, in fact the Virginia dynasty is very uncomfortable with it. But not uncomfortable enough to actually repudiate, turn back the clock, and put Federalism in reverse gear. Jefferson is the m most doctrinaire of the Virginia dynasty; his successors monotonically become less doctrinaire and more prone to a softer, restrained Federalism–until thy peak with the cowardly lion Federalist, J.Q. Adams who will be overturned by the final stages of the a populist movement that began in 1763.
Which brings me to the populists. What happens when their Virginia elite desert them?
Whatever else they will not go away. In Virginia itself an important faction will take up increasing opposition to Jefferson from his mid-first term. The focus of populism will again revert to the state, and even local level where the earliest prot0-machines will emerge into the urban policy system (New Jersey is an example  Carl E. Prince, New Jersey’s Jeffersonian Republicans, the genesis of an early party machine (University of North Carolina Press, 1967). In future themes we will dwell much more on the state and local levels and it will be very apparent in those modules how critical and impactful is the populist D-R segment; that segment not only continues in the absence of its national leadership, but picks up steam. What’s more economic development policy is at the vortex of that partisan/ideological struggle.
Hence the national government will continue in its nation-building institutionalization, mostly through a Marshall-led (he is a Tidewater Virginia elite) Supreme Court activism. To introduce another thread that will be development elsewhere, the economic class that seized control over the American Revolution, and then its subsequent constitution-making, is still in charge–if taken aback. Charles Beard, one of America’s most influential historians, pointed out how the elites had displaced populists and seized control over commanding heights of the Revolution and early American governance. We concur–and concur also in a common observation that this is the distinguishing factor in why the American Revolution did not become what the French Revolution became. All that is above our pay grade, but as far as economic development policy-making goes, we will see that American economic development will form its own wing or approach to economic development congruent either with the emerging capitalism and its elites, or the disturbed and dis empowered populists–and in the 19th century both will co-exist in a tension-packed sustained Era of Good Feelings–that will break asunder under the thrust of a Progressive Movement a century in our future.
What we are seeing in this module is that as early as 1801 a noticeable, if gradual shift has begun in economic development policy leadership from the Federalist national to the state, and then even to local policy systems. There the battle between a Federalist and D-R Tribe consensus will be fought–in both North and South. Federalism at the national level never recovered from the 1800 election, and the Tribe itself will cease formally by 1816. At the national level the Federalists will join, of all things, the D-R Tribe, partly because Jefferson, despite his attacks on the midnight judicial appointments and budget-cutting retained a good many Federalists in the small Federal bureaucracy. He did not drain the Federalist swamp. That Federalism-lite will itself be threatened by a rising “western” populism that will grow stronger with each new state admitted into the Union. It will also be forced to lead the attack on foreign enemies and global politics–a losing proposition no matter how generous one is. It will also suffer isolation as more states, regardless of geography, develop increasingly hard-line proto-Whig or pro-Jacksonian policy agendas. The amazing thing to me is that the latter half of this period will be called the Era of Good Feelings, a misnomer if there ever was one.
But we take considerable pains to observe here, the Federalists in effect merging with the D-Rs at the national level, creating within the Virginia Dynasty a Federalism-lite, less aggressive, more muted if not limited federal role in S&L policy-making, and a less ambitious more gradual nation-building institutionalization. The Virginia Dynasty retained the structures and continued accommodation with an emerging and developing entrepreneurial finance and manufacturing capitalism, and tempered where they could national leadership in policy-making. The long-term fortunes of each Tribe will vary by the state/region, and large urban center, and will ebb and flow over time. The populist base will continue its struggle against the hard-line Federalists, and will break away policy by policy from the “Federalist-lite D-R–at the state level principally. In a generation, a new generational cohort will assume command and a new hard-line Federalist political party, the Whigs, will fly from the Federalist-lite D-R nest. More precisely it will be kicked out of that nest by Andrew Jackson.
As we proceed onto a quick review of Jefferson’s two administration, the reader will realize the discontinuity in Jefferson’s bank/public credit decision would not be the only one. There is a literature which attempts to explain the discontinuity between the writings of Jefferson, and much of his governance. For us in this history, the path followed is that we deal with “what he did”, not with “what he wrote”. In my mind Jefferson is the South’s answer to Sam Adams. The latter, although few know it, was a thoroughly prosperous, Harvard-educated, Puritan-conservative traditionalist, and 4th Massachusetts governor (1794-97)–his father made the beer and money not him–but in today’s terms a radical Alinsky-style community activist that when push-came-to-shove supported the military repression of Shays Rebellion and Washington’s suppression of the Whiskey Rebellion, despite his strong Anti-Federalism. Like him, Thomas Jefferson was a wealthy elite, given to radical thought, but like Sam Adams restrained, balanced governance. Said and done, they were not of, but sympathetic with the populists, and found themselves on the fringe of the Federalist Founding Father generation. We will look to them when we discuss the submerged, but rising community development approach to American economic development.