Over the last week I read most of a book that has been sitting on my shelf for about 4 decades, The Era of Good Feelings, by a British historian, George Dangerfield. It appeared in the early 1950s and dealt with the years 1812-1828. I skipped the sections of the War of 1812 because I was already sufficiently familiar with that period thanks to Henry Adams's magisterial History of the United States under the Administrations of Thomas Jefferson and James Madison, which ranks with Allen Nevins's The Ordeal of the Union as one of the two greatest grand scale works of US history. Dangerfield, let it be said, was not nearly as good a historian as Adams or Nevins. He spends much too much time putting everything in his own words, and far too little quoting his subjects. He spends a lot of time talking about Henry Clay, Andrew Jackson, John C. Calhoun, and John Quincy Adams, but I didn't feel I got to know any of them. Much of the book is about complicated trade questions involving the U.S. and the British Empire, and he makes a complete mess them which I often could not follow. But still, the book provided a lot of food for thought, because the great issues of the day--the role of the banking system, economic inequality, and the United States' relationship to the wider world--have changed much less than you might think.
The Era of Good Feelings--which Dangerfield actually declares to have been a misnomer--has been so called because,. for the only time in its history, the US essentially had only one political party. The Federalists had disappeared nationally and did not even field a candidate in 1820, and the Whigs only emerged during the subsequent presidency of Andrew Jackson. But the great fights between Democratic Republicans (by 1820, Democrats) and Federalists in the 1790s were still alive within the Democratic Party. They turned on economic institutions and the role of government.
The banking system, led by the second US Bank--chartered under the Madison Administration--was a source of great controversy. Banks, those magical institutions with the power to create money, supplied U.S. paper currency in those days, and of course they were almost completely unregulated. Hamilton had persuaded Washington that the US needed a national bank back in the 1790s, and Madison had agreed late in his own Administration, after the original institution had disappeared. Many orthodox Republicans, however, especially in the South and West, still disliked banks, whom they thought took advantage of the common man. And lo and behold, what should bring about economic ruin to much of the country in the late 1810s, culminating in the panic of 1819? Nothing more nor less than the 19th century equivalent of a housing bubble: a boom in land speculation, fueled by the issuance of bank notes, which led to a crash and a widespread loss of fortunes. What occurred to me as I read all this was that the orthodox Republicans, men like the half crazy John Randolph of Roanoke, who had viewed even Jefferson as a hopeless apostate, had grasped an essential truth. Banks, we now know thanks to Thomas Piketty, are the mechanism through which the law of capital accumulation--the tendency of capital to increase faster than economic growth--works itself out in practice. It took the United States another 100 years or so to realize that because banks are also an economic necessity, the only way to moderate their natural economic role of promoting inequality was to regulate them. It took 65 years after that, until the Clinton Administration, to forget that lesson once again. And by 2007, it was 1819 all over again--only much worse.
There was, meanwhile, another economic issue about which the orthodox Republicans were less sophisticated. "Internal improvements"--mainly roads and canals in those pre-railroad days--were advocated strongly by Henry Clay and John Quincy Adams (who together swung the indecisive election of 1824 to Adams over Andrew Jackson in the House of Representatives) as a means to develop the nation's economy and unify it. Adams even hoped that they might integrate the South into the national economy, convert southerners to industry and commerce, and promote the abolition of slavery. But Andrew Jackson and many other Democrats opposed them as likely to concentrate economic power and make the rich richer. They did not understand, in short, that infrastructure projects could stimulate the economy, and divert economic surpluses from bank profits to public goods. We must not feel too superior about this: we seem to have forgotten that, too.
The other theme of the book involves the role of the US in a hemispheric battle over the political future. On the one side was the fledgling United States and the new Latin American Republics, who had rebelled against Spanish rule; on the other side was the Holy Alliance of Austria, Prussia, and Russia, which had intervened to stop several revolutions in southern Europe and wanted to do the same in Latin America. In the middle was Great Britain, and more specifically its foreign minister, George Canning. Canning and his Prime Minister, Lord Liverpool, were not liberals even by the standards of 1820s Britain. They opposed Parliamentary reform or broadening the franchise and cared nothing about the condition of the new industrial masses. But largely for economic reasons, Canning wanted to confine the influence of the Holy Alliance to Central and Eastern Europe, and at a critical moment, he declared that Britain could not stand aside if that alliance sent troops to Latin America. Canning's declaration was the real force behind the Monroe Doctrine, in which our own President announced that the United States would oppose any further attempts by Europeans to colonize the Americas. This was an era in which Americans thought they were leading the way to a new world. Only a few years later, in Democracy in America, Tocqueville endorsed that view, warning Europeans that their aristocratic societies could not survive much longer. That did not mean, however, that he expected them all to become electoral democracies on the US model, but only that their legal social distinctions would disappear.
The question of how far the American model will spread remains critical today,. of course, 200 years later. Russia, China, and various regimes in the Middle East have put forth alternative models. Authoritarianism is gaining ground in Eastern Europe, which the West thought had been secured in its camp twenty years ago, but whose allegiance is much less certain now. And the current election will largely be dominated, it seems, by the issue of intervening on behalf of American interests and values in the Middle East. Paradoxically, while we are infinitely stronger militarily today than in 1824, we do not have the political momentum on our side in the contested areas of the world. President Obama, for all his faults, seems to realize that. It is not clear that any of his likely successors do.