Reading Alexander Hamilton in California

WHAT’S WRONG WITH CALIFORNIA?

California, as usual, has been making headlines nationwide for a number of reasons. Democrats in state government, primarily under the ringleader-ship of State Senate President Kevin de Leon and Attorney General Xavier Becerra, continually go out of their way to snub the Trump Administration on everything from immigration to healthcare to the environment. Its rising crop of Democratic stars- Senator Kamala Harris, Lieutenant Governor Gavin Newsom, Los Angeles Mayor Eric Garcetti, even tech titan Mark Zuckerberg- are routinely cast as prospective presidential candidates for the 2020 cycle. Seven GOP-held Congressional seats whose populations voted for Hillary Clinton in 2016 are under intense targeting by California Democrats in the national party’s bid to take back the House of Representatives in 2018. California’s a happening place these days.

But all the national political posturing and gossip going on within the Golden State’s borders is a distraction from the real story- the absolute dereliction and failure of California’s governing class to address the very real problems afflicting the state. On everything from housing shortages and soaring costs of living to bloated, out-of-control spending apparatuses and a hemorrhaging statewide debt, California’s politicians have hitherto only been able to offer piecemeal and token reforms, policy Band-Aids, even as they pursue symbolic campaigns to cleanse the history books and promote “international climate leadership.” There are many reasons for this dreamy situation, especially including the absence of a competitive opposition Republican Party, but the biggest problem remains a classically Californian one.

In short, in the late 19^th century, California was largely under the control of the Southern Pacific Railroad and other major industries that dominated statewide politics. The Progressive Era saw a successful revolt against this oligarchic rule by the Lincoln-Roosevelt League and others, and the imposition of progressive and democratic reforms that radically altered- and hardened- state government structures. The decline of bipartisan progressive politics in the mid-20^th century saw a partisan golden age, and California throughout the Second World War and Cold War seemed to be the kind of middle-class utopia Norman Rockwell spent his time depicting in his paintings.

But that middle-class utopia, for various reasons, gave way to the rise of a new oligarchy allying itself with the progressive structure of the post-Progressive Era California Constitution. Thus, as California weathered the crises of the 1990s and entered the 21^st century, it found itself shackled by the ghosts of its past- the domineering tech sector in Silicon Valley and the Bay Area, which was on its way to becoming a new nexus of wealth and power, and the mutated legacy of the Progressive Era in the form of century-old reforms that now made state government dysfunctional, and empowered a new interest group in the form of public-sector unions. These forces, both sympathetic to the state Democratic Party (as they had begun to rise in influence while the California GOP was still dominated by the Cold War’s aerospace industry and military-industrial complex of Southern California) have in the last two decades risen further in prominence, to the point that they possess a negative veto power against certain reforms and a budding positive power to push their own reforms without opposition.

Furthermore, most of the intractable problems in California remain intractable primarily because these interest groups benefit from the current structure, and dominate decision-making in the left-leaning Democratic legislature. And they have the money to back up their proposals, as well. Public-sector unions, as a rule, oppose restructurings of overly-generous statewide pension systems; teachers’ unions oppose any new oversight and reform of the teacher hiring system and school districts in general; the tech, media, and other upper-middle class industries, and the coastal liberal homeowners who work for them, support increased environmental regulations on principle, without feeling, particularly harshly anyway, the effects of higher energy and housing costs. It’s not the “Green-and-Blue conspiracy against the middle class” some anti-establishment rhetoric suggests; but it is an unchecked domination of the state’s Democratic Party-dominated political structure by “Green” and “Blue” forces. In a nutshell, California faces massive fiscal and cost-of-living problems, because the groups that benefit from those problems’ remaining unresolved, all dominate statewide politics.

The California Republican Party, meanwhile, is negligible in influence. It doesn’t really have opposition power in the legislature anymore, and Mayor Kevin Faulconer of San Diego is just about the only Republican of significance in statewide politics. It does represent the redder businesses and industries that still have a presence in the state, but even these typically take to negotiating directly with moderate Democrats to preserve their interests against the coastal elites and public-sector unions. Meanwhile, the urban working classes, nominally represented by Democrats, tend to go unrepresented, their interests considered only third, after those of public-sector unions and the green coastal gentry have been sated.

While the ideal solution, as is a typical ideal solution in American politics, would probably be to restore partisan competitiveness and economic diversity to the state, the current dominant groups have no interest at all in making that happen. So some real institutional creativity is required for those hoping to work within the current system and structure to allay these major problems.

A potential source of institutional creativity and inspiration can be found in theaters across America- the career of Alexander Hamilton.

A USEFUL HAMILTONIAN PRINCIPLES

The “ten-dollar founding father” has been appropriated and abused over the last two years, since his 2015 Broadway debut endeared him to the hearts of millions of liberal fans. In fact, many of the “Green” and “Blue” types being critiqued here have probably shared memes of Lin-Manuel Miranda/Alexander Hamilton exhorting the blessings of mass immigration or condemning police racism/slavery or encouraging higher levels of spending, etc. In many ways the charming musical can be seen as a liberal rebuttal of the Tea Party right’s appropriation of the Founding Fathers- “We on the left have a Founding Father too!”

This was probably predictable, but it’s also unfortunate- because Alexander Hamilton’s vast corpus of political writings contains quite a bit of useful political and policy insight that both contemporary liberals and contemporary conservatives would do well to learn from[i], and those nuggets of wisdom go deeper than the bite-sized slogans contemporary liberals pull out of the musical. A few of these principles follow.

First, and most importantly, is the principle of private interests aligned towards the common good. Hamilton understood, in ways his republican rival Thomas Jefferson never could quite stomach, that one of the three or four driving factors in an individual’s political life was private interest, be it financial and economic, political, cultural, or social. Like James Madison, Hamilton agreed that these private interests ought to be balanced against each other so that one might not dominate the others- the New Deal’s “iron triangle” of business, labor, and government would later be the most explicit example of this- but Hamilton went a step further.

Rather than merely seeking to preserve liberty by balancing faction against faction and ambition against ambition, Hamilton believed that certain important social and political goals could be attained by directing those balanced forces down certain public channels with the use of carrots, sticks, and sermons. In his view, good government was not so much about merely preserving liberty and letting individuals pursue their interests- it was also about harnessing those interests to pursue a concrete conception of the public good.

Hamilton was notorious for associating with the rich and powerful, often in his life being castigated as, alternately, a corrupt plutocrat or an unfortunate dupe of the Federalist aristocrats. But there was a reason for this- the fledgling United States federal government could only maintain its sovereignty, he reasoned, if it had the backing of the most influential and powerful economic interests located within its borders. Those interests could just as easily favor Britain or France, and it was important to keep them loyal to the new Congress and the Constitution that governed it.

This was the real purpose behind Hamilton’s famous financial plan for the assumption of the thirteen states’ Revolutionary War debts. It did indeed empower creditors over debtors, and it did subvert the individual states to the federal will. But it did so to ensure that the rising capitalist merchant class would have faith in, and therefore cast their lots with, the new federal government, giving that government the indispensable support of the most powerful element of domestic American society. The creation of the Bank of the United States and the federal encouragement of manufacturing, whatever their other roles, certainly helped secure the support of major economic interests for the new government as well.

There are other useful principles that can be taken from Hamilton’s public philosophy and political career. The public’s confidence is another one of the indispensable supports of government, so no matter how much backing the government secures from the moneyed classes, it must always maintain, in practice and in the public’s perception, a true level of dedication to the common good and the needs of all society’s groups, lest it become a rentier state dominated by major economic interests. The best way to maintain this perception and reality is by running a government that accomplishes its tasks efficiently and effectively- the government must have energy, and neither succumb to bloat and waste, nor retreat to a laissez-faire conception of public power. Good public administration is therefore key to a government’s success. And on the question of fiscal health, debts can be blessings, provided that they are equipped with adequate funding systems and monetized over time.

Alexander Hamilton had innumerable good ideas, empirically observed, about politics and policy that ought to be examined in greater detail by our governing and scholarly classes. If those classes in California examined them, a blueprint of their subsequent plan to serve the public interest might look as follows.

HAMILTONIANISM FOR 21^ST-CENTURY CALIFORNIA

The overarching aim of Hamiltonian legislators in California state politics- be they “Mod Squad” business-class Democrats like Senator Steve Glazer, pragmatic Democrats like Assembly Speaker Anthony Rendon, or blue-city Republicans like Mayor Faulconer, would be this: take the interest groups- public-sector unions and tech companies, primarily- who are politically dominant and have a stake in precluding fiscal reform and economic openness, and give them a reason, be it incentives, penalties, or sweet deals of some other sort, to support the reform of their sectors.

For public-sector unions at a statewide or even a municipal level, the task would be for Hamiltonian reformers to convince them to drop their knee-jerk opposition to pension reform. This would seem to be an insurmountable task, given that public employees like their overly-generous benefits and sometimes ludicrous protections, both of which are usually protected by law. If some understanding could be arrived at whereby these legal barriers to pension reform were repealed, but the unions would have a stake in the pension systems’ being adjusted through multiparty talks (which would include union members, government representatives, taxpayer advocates, and others,) some progress might be attainable. A gentlemen’s agreement-style guarantee of, say, increased job security for union members in return for the unions’ openness to pension reform, might be one way forward. Of course, it’s difficult to see the currently-dominant public unions to back such a compromise under current circumstances.

On education and the question of teachers’ unions, the task might be somewhat easier. It could be a question of offering more generous funding and services to school districts in exchange for reforms to the teacher hiring/firing process and greater school accountability. It could be a pledge to tank the mixed-results charter schools project, thus giving public school districts effective monopoly over the education process, in exchange for those school districts and teachers’ unions submitting to a variety of reforms, including oversight and hiring/firing procedure reforms.

As for the “Green Gentry” of the employees of tech, media, and entertainment companies along the California coast, one could imagine pledges of further funds for infrastructure and anti-poverty services, and perhaps even a better climate for those entrenched businesses against startup competitors, in return for relaxation of support for restrictive energy, environmental, and housing construction policies that drive up the cost of living for California’s middle and working classes. True, those funds would be better spent in the Central Valley and the Inland Empire, but it could prospectively be worthwhile to bail out the coasts in exchange for their flexibility on regulatory issues that harm denizens of the interior. The question is whether or not the Gentry would allow it, given that sentiments in favor of environmental regulations run deep.

In a way, this looks like Trumpian deal-making and transactional politics, as it should. But it is indeed Hamiltonian in that it privileges certain “public goods-“ flexibility on fiscal structuring, first, and a climate of reduced costs and hence greater opportunities for the working and middle classes, second- over narrower conceptions of “a vision for the state.” And it is flexible enough that it opens room for reformers to work with the entrenched, nearly-parasitic interest groups in power, in ways that strive to align those groups’ interests with the public goods of fiscal flexibility and a middle-class climate.

The strategy- a version of “relief for reform,” perhaps a form of bribery- is designed to be a two-step process. First, reformers gain the trust and cooperation of those interests opposed to reform, and the reins of power over fiscal and regulatory structuring. Second, these reformers do that fiscal and regulatory restructuring, this time without the blue-green wall of opposition from public-sector unions and the coastal gentry. The result should be a more sustainable and workable fiscal model, and a better regulatory climate resulting in lower costs and perhaps more opportunities for lower-income Californians.

There are, as always is the case in politics, consequences and tradeoffs. For one thing, this proposed set of compromises destroys many pretenses of free market economics and competition between the public and private sectors, at times even callously allowing for the withering away of such treasured projects as the struggling charter school movement. It is destructive, as well, to most conceptions of “fiscal responsibility” at least in the short term. The bailouts and subsidies it offers to these various interest groups will have to come from somewhere- Borrowing? Extra taxes on the rich, or on the poor?-and will more likely than not increase the state’s deepening debt.

But then, politics is not- at least should not be- about realizing the best possible version of an ideal, abstract principle like freedom or equality or virtue. Politics is about, first, preserving “ordered liberty” of a sort by preventing groups from dominating, enslaving, or destroying each other, which is done by building institutions; and second, by advancing particular social goals necessary for the survival of the broader community, by whatever compromise means is necessary. The remnants of the California Republican Party would not like this morally compromised strategy any more than most elements of the California Democratic Party would like the constraints it imposes. But if their interests could all be harnessed in the general public interest, it becomes at least a little more likely that some motion towards the attainment of that public interest can be attained.

WANTED: A FEW GOOD MEN

To help California’s public interest escape from the clutches of public-sector unions and green coastal elites, it would be helpful to gain the support of those factions, and Alexander Hamilton’s methods of aligning the interests of the powerful with the public good might be helpful on that regard. Human nature being what it is, this would be a monumental undertaking no matter what, but given the deepening crisis nationally and its effects on California, now would be a good time to start.

The alternative to this sort of public-interest politics would probably be more of the same- a California GOP continually striving and failing to become relevant, simply because its donor and voter base has by and large left the state since the end of the Cold War. Recent internal spats within the California GOP-notably the inglorious ouster of pragmatic Assemblyman Chad Mayes from his position as Assembly Republican Caucus leader- reveal that the party is simply not capable of doing what it needs to do to be relevant as a counterforce to the California Democrats. The small-dog-biting-the-lady’s-leg image conveyed by California’s rump Republican Party just doesn’t inspire confidence, and it is hard to see the party returning to its days of relevance anytime soon.

There’s always the chance that that rump minority could try to effect policies that encourage the growth of the businesses- energy, aerospace, manufacturing, etc.- that have tended to support Republicans in California in recent decades. But those strategies clearly haven’t been working, and in any case if they did, it would be a long-term process before a state Republican minority would be able to make significant changes to statewide policies. Furthermore, such a situation would be adversarial and quite likely very messy, making the necessary compromises harder to strike and the necessarily razor-like policy fixes harder to attain. A collaborative effort on the part of good-government reformers would be preferable even to increased Republican power in the state, at least in the sense of getting these fiscal and regulatory reforms accomplished.

There’s one last question: who would actually be carrying out these reform efforts? Would it be Democratic politicians who, presumably, are already under the influence of these groups that are opposed to reform? Would it be Republican politicians whose own backers would advocate for some reforms and not for others?

More likely than not, yes. But there is a hope for otherwise, in one final bit of political wisdom from Alexander Hamilton’s pen. Hamilton’s schemes often assumed that a few “choice spirits,” dedicated public servants, aristocrats of the soul, talented administrators and benign politicians, would be necessary for the carrying-out and proper administration of the public’s interests. These men (and women!) of character, of dedication to the government and the polity it represented, would be something like Platonic philosopher-kings, more worthy of managing the public weal than most standard self-interested political hacks and ideological demagogues.

Who gets to determine who these choice spirits were never seems to have been one of Hamilton’s concerns, and he never goes into significant detail on the question. But if virtue cannot be entrusted to the citizenry or to the interest groups, perhaps at the very least a few good men and women could do good work in politics to shepherd the state and keep it moving in the right direction. We all know who these people are, but would probably be unable to define their qualities if asked.

Hopefully some cadre of such choice spirits- Californian Hamiltons- soon ascends to power in the Golden State, with some of Hamilton’s precepts on the public interest and effective administration in mind. The state’s residents could use them.

 

 

[i] Most of the articulation of Hamilton’s principles here is inspired by Clinton Rossiter’s magisterial treatise, “Alexander Hamilton and the Constitution.” (1964)