Federalist Papers 7-8

If you weren't sure whether Hamilton was for-sure a genius, you will be after reading Federalist No. 8.

But first:

FEDERALIST No. 7. The Same Subject Continued (Concerning Dangers from Dissensions Between the States)

Hamilton explains that states that are not united will eventually go to war with each other, probably because of differences in economic prospects. Sovereign states may also treat fellow states inequitably, rewarding some with exclusive trade deals while bullying others with tariffs and taxes. We're going to run into even more problems as soon as one state experiences a natural disaster that wrecks their agricultural year, unless we have regulations in place to ensure that a group of united states can help each other out financially.

Also, the states are going to need to work together to pay off the national debt, and some states are going to argue that they're being asked to pay more than their share, or that other states should contribute more because they're doing better financially, and some states may fail to set aside the money or deliberately ignore their responsibilities because they assume other states will pick up the slack, so we're going to need to come up with some way of dealing with all of this.

Hamilton does not provide the solution; perhaps it will appear in one of the forthcoming essays.

FEDERALIST No. 8. The Consequences of Hostilities Between the States

So Hamilton basically predicts OUR MODERN TIMES in this one, he tells us exactly what's going to happen in the future if we don't pay attention to what he's trying to tell us now, and the only thing he got wrong was he mistakenly called this essay "the consequences of hostilities between the states" instead of "the consequences of developing a financial industry."

Here's how the argument comes together:

• States that fear each other are more likely to establish standing armies.
• Not only will these armies take resources, including manpower and project management, that could have gone towards something more productive, but a standing army will also lead to what you might call standing anxiety.
• People will begin imagining catastrophic scenarios and mentally preparing for them.
• This kind of perseveration will eventually lead them to their own human limitations, including their inability to trust their neighbor, at which point they'll be looking for someone who can take charge and make them feel safe.
• That's when we'll get our first monarch, even if the individual is elected democratically. The king-in-all-but-name will announce their intent to rule by expanding executive powers while limiting or silencing the legislature.
• If we're lucky, this ruler will be benevolent – but either way, our civil and political liberties will disappear.

Got it so far?

Good.

Because Hamilton says that we can avoid this entire thing as long as we remain focused on improving our technology. Do we have better food? Better tools? Better housing? Better education? Better communities? Better lives? The minute we start tracking other metrics like revenue, the second we focus on the science of finance and begin speculating on how to increase our piles of gold, we might as well assume the tyrant is coming.

The industrious habits of the people of the present day, absorbed in the pursuits of gain, and devoted to the improvements of agriculture and commerce, are incompatible with the condition of a nation of soldiers, which was the true condition of the people of those republics. The means of revenue, which have been so greatly multiplied by the increase of gold and silver and of the arts of industry, and the science of finance, which is the offspring of modern times, concurring with the habits of nations, have produced an entire revolution in the system of war, and have rendered disciplined armies, distinct from the body of the citizens, the inseparable companions of frequent hostility.

People who are absorbed in good work, who want to understand and improve the world around them, who practice commerce without capitalism – and believe me, we're going to get to that – are incompatible with the soldier and the strongman.

"Ayn Rand almost made this point in Atlas Shrugged," Larry and I said, to each other, when we were discussing Federalist No. 8 together. "She was so close to figuring it out, but then she had all of her heroes brag about how much they loved being rich."

(Yes, we're still discussing Atlas Shrugged. Viruses are hard to get rid of.)

Pair this Federalist Paper with Dorothy Thompson's brilliant essay Who Goes Nazi, if you like – and hat tip to Ann Friedman for linking the piece in her weekly newsletter, because otherwise I might never have known it existed, and now I've read it three times, once aloud to Larry, who loved it just as much as I did.