A Full Vindication of the Measures of Congress, Part IV: Supply and Demand

In addition to acknowledging the avidity that motivated most British decision-making, Alexander Hamilton also directed A Full Vindication to dispelling the misgivings he attributed to A.W. Farmer that a suspension of trade would prove either harmful to the colonies or harmless to Britain. In so doing, he demonstrated a keen understanding of the web of economic dependence that bound together the various regions of the 18^th century British Empire. In particular, he seemed eager to communicate to his readers that the commercial relationships that existed between Britain proper and its various colonial dependencies (in the Americas, the West Indies, and elsewhere) did not merely serve to funnel resources from outlying areas to a central metropolis. As much as the American colonies depended on Britain for manufactured goods, luxury items, and military protection, so too did Britain depend on the natural resources and markets that the colonies provided. Severing this relationship would thus have been substantially harmful to both sides. Acknowledging this fact, as Hamilton doubtless hoped his adopted countrymen would, might accordingly have afforded the aggrieved colonists a lever by which to pry loose from Britain the accommodations they desired. This represented an uncommon perspective on the contemporary disagreement between the colonies and the British Parliament – lacking in either philosophical rigor or sentimentality – but one that was very much in keeping with the experiences and temperament of the author of A Full Vindication.

As to the potential harm that a boycott on British goods was said to entail, Hamilton was convinced that very little would be lost in the event of a cessation of trade. Indeed, he was rather of the mind that his adopted countrymen had a great deal to gain. Beginning in paragraph forty-five of A Full Vindication, Hamilton ran down a list of some of the commodities that the colonies had customarily supplied to Britain which a boycott would allow them to make use of on their own terms. “Our climate,” he avowed, “Produces cotton, wool, flax, and hemp; which, with proper cultivation, would furnish us with summer apparel in abundance.” To this he added that cotton could also function to provide suitable winter garments, as could the sheep it was possible for Americans to cultivate in large numbers, and the, “Large quantity of skins we have among us [.]” He also estimated that silk production was not beyond contemporary American capabilities – “The silk-worm answers as well here,” he asserted, “As in any part of the world” – and further argued that even manufactured goods were within the colonists’ ability to provide. “Those hands which may be deprived of business by the cessation of commerce,” he opined, “May be occupied in various kinds of manufactures and other internal improvements.” Far from inaugurating a period of hardship and privation, it seemed to be Hamilton’s ardent belief that the boycott proposed by the First Continental Congress stood to unleash America’s latent productive capacity.

Hamilton also stressed that the farmers of his adopted homeland stood to benefit from a sudden reliance on the goods they produced. The agriculturalists, he avowed, upon which Britain already depended for raw materials (cotton, hemp, flax, wool, tobacco, rice, indigo, etc.) could quite easily shift to supplying the needs of their fellow Americans, and in particular the merchants and tradesmen that a boycott would injure most directly. “Manufactures must be promoted with vigor [,]” Hamilton declared in paragraph ninety-four, “And a high price will be given for your wool, flax, and hemp.” To this general affirmation he added, “It will be your interest to pay the greatest care and attention to your sheep. Increase and improve the breed as much as possible.” Then, “If matters be not accommodated by spring, enlarge the quantity of your flax and hemp. You will experience the benefit of it.” This kind of specific, even banal, advice – repeated in paragraphs ninety-five, one hundred nine, and one hundred thirteen – was unusual for a political treatise in the Revolutionary era. Thomas Jefferson and John Adams, men whose philosophical convictions helped form the basis of American republicanism, were less inclined than Hamilton to delve into such distinctly agrarian subjects. Yet Jefferson and Adams were farmers by trade, and Hamilton was nothing of the sort. What he seemed to understand, however, was the impact of simple economics – of necessity, desire, and profit – on the lives of individuals at every level of a complex social order. British manufacturers and Americans farmers alike could trace their well-being to the same fundamental source, to the basic interaction of supply and demand. By tapping into the needs of one population and the abilities of another, great change could be affected on the level of individuals, communities, and even great empires. This realization, and Hamilton’s ability to communicate it to an audience, was no small measure of what set him apart from his more philosophically inclined contemporaries.

Hamilton further demonstrated his knowledge of commerce, resource management, and general economics by addressing the inability of Britain to make up for the loss of American trade in the event of a boycott. The claims put forward by A.W. Farmer, he asserted in A Full Vindication, that the loss of American resources could be made up by increasing British trade with the Netherlands and the Baltic, and by increasing the productive capacity of British Canada, were patently false. This, he proceeded to clarify at length, was because the Farmer in question evidently lacked an appreciation of how finely balanced the British Empire truly was. “The Dutch,” he explained, “Are rivals to the English in their commerce.” Though they had been known to supply Ireland out of their yearly surplus of flax, once their own needs had been met, it would have been foolish to expect them to come to the aid of their cross-Channel neighbors out of any sense of charity or concern. Rather, Hamilton opined in paragraph sixty-two, hearkening back to his previous commentary on the power of self-interest, the Dutch, “May take advantage of the scarcity of materials in Ireland, to increase and put off their own manufactures.” Self-preservation was what guided 18^th century Great Power politics; colonies were a function of the constant competition for resources and markets. It would not have been in the best interest of the Dutch to supply Britain’s needs, just as it was not in Britain’s interest to behave more charitably towards its colonial subjects than was absolutely necessary. 

The Baltic, Hamilton continued in paragraph sixty-three, would have offered no greater aid to Britain in the event of an American boycott. Though the region was not under the hegemony of nations in direct competition with Britain’s colonial ventures – divided in 1774 between the German states, the Polish-Lithuanian Commonwealth, and Russia – it had previously, “Supplied Ireland with its flax; and she has been able to consume that, with all she could derive from other quarters.” Even Canada, a wholly British territory, was deficient in its ability to produce the resources British manufacturers increasingly required. “I am well informed,” Hamilton affirmed on that head, that Canada, “Could at present afford but a very inconsiderable quality [of flax]. It has had little encouragement, hitherto, to raise that article; and, of course, has not much attended to it.” Doubtless without intending to, A Full Vindication made clear, Britain had locked itself into a state of total dependence on its American colonial possessions. No other region of the globe could supply the resources they turned out – the flax, cotton, wool, and tobacco – and as British manufacturing increased its efficiency and its output, fewer and fewer alternatives could possibly satisfy the growing demand. And even if this was not the case, Hamilton pointed out in paragraph sixty-five, securing adequate supply was only half of the equation. Even if Britain had been able to find a new supplier for its textile mills – if the Baltic and Canada had not been so mortally deficient – “She would want purchasers for her linens after they were manufactured; and where could she find any so numerous and wealthy as we are?” The American colonies, Hamilton was inclined to believe, were the basis of Britain’s 18^th century economic preeminence. They supplied British industry and bought British products – had done for over a century. To expect a sudden breach of this relationship to go unnoticed would have been quite simply unrealistic.  

Other corners of the empire – valuable and vulnerable in equal measure – would have felt the sting of an American boycott as well. The West Indies, global centre of 18^th century sugar production, were governed based on a notably precarious economic logic that did not well tolerate sudden shortages of vital commodities. Arable land on islands like St. Kitts, Martinique, or Cuba were too valuable to be turned over to anything other than sugar production, and slave labor brought with it a whole host of associated costs (food, clothing, housing, etc.). As a result, Hamilton argued in paragraph sixty-six, “There is seldom, or never, in any of the islands, a sufficient stock of provisions to last six months […] the necessaries they produce within themselves, when compared with the consumption, are scarcely worth mentioning.” North America had accordingly supplied Britain’s Caribbean possessions with staple goods, purchased some quantity of their slaves, and absorbed a sizable percentage of their yearly sugar harvest. If this mutually profitable relationship were to suddenly cease, in the event, say, of a non-importation agreement being enforced by the American colonists, the consequences for the West Indian planters would have been very nearly catastrophic. “To suppose the best,” Hamilton posited in paragraph sixty-seven,

Which is, that by applying their cane-lands to the purpose of procuring sustenance, they may preserve themselves from starving; still, the consequences must be very serious or pernicious. The wealthy planters would but ill relish the loss of their crops; and such of them as were considerably in debt would be ruined. At any rate, the revenues of Great Britain would suffer a vast diminution.

This “vast diminution” was the key. By attacking Britain’s financial interests, Hamilton believed that it was possible to bring even that vast and powerful empire to its knees. If, in the process, the planter class of the West Indies were made to suffer, they would have had nothing more or less to blame than the essential law of self-preservation.   

Though under normal circumstances the web of interdependence that bound the 18^th century British Empire together – tying Caribbean sugar producers to American farmers to English weavers – was a source of stability and prosperity, it was perhaps more delicate than it appeared. By making this argument in A Full Vindication, Alexander Hamilton effectively drew attention to a very basic truth – of which most Americans were likely unaware and Britain would have been loath to admit. Over the course of a century and a half, Britain had come to depend on access to American resources. The flax, hemp, cotton, and wool that the colonies supplied were the lifeblood of the British textile industry, and suitable replacements would have been near impossible to locate in sufficient quantities and at reasonable costs. Britain’s possessions in the West Indies were similarly locked in to an inflexible economic framework. Lacking the means to produce almost anything but the sugar harvests that made them profitable, plantations in places like St. Kitts and Antigua were absolutely dependent on other British territories to supply them with food, textiles, building materials, and tools. Having access to these commodities abruptly cut off would have severely limited their productivity, and in short order transformed them from cherished prizes into financial liabilities. Hamilton’s awareness of this harsh economic reality, uncommon among his contemporaries, was almost certainly the product of his tumultuous upbringing in this same region of the globe.

In spite of his first-hand knowledge of commerce, economic inter-dependency, and supply and demand, however, certain aspects of Hamilton’s forecasts in A Full Vindication do not bear close scrutiny. While in all likelihood the American colonies did possess the natural resources to meet the needs of their growing population, what they lacked (and would continue to lack for decades to come) was the infrastructure to make purely internal commerce viable. Late 18^th century Britain, even in the earliest phase of the Industrial Revolution, enjoyed the use of textile mills and the beginnings of what would become an extensive system of navigable canals. The latter investment in particular allowed British manufacturers to cheaply and quickly transport raw materials and finished goods to and from sea ports and urban centres. The increased profits that resulted led to investment into larger factories, more canals, and in time innovations like the steam engine. America was perfectly capable of following this pattern of commercial and industrial development, as time would bear out, but the portrait that Hamilton painted in 1774 of his countrymen’s prospects in the near term seemed to lack an appreciation of what the transformation actually involved.

In 1774, there were no textile mills in the American colonies. There were no canals to speak of, barely any decent roads, and no means of communication faster than a horse. The first toll roads, paid for by the sale of shares in a chartered corporation, would not surface until the 1790s, and major infrastructure projects like the Erie Canal (connecting the Atlantic Ocean to the Great Lakes) would not see completion until the 1820s. The textile mills of New England were likewise a turn-of-the-century innovation, the first of its kind appearing in 1787 in Beverly, Massachusetts. To achieve what Hamilton seemed to propose in A Full Vindication – the replacement of distant British industry with an indigenous equivalent – would have required some combination of all of these advancements, and taken far long and cost a great deal more than his rather sunny predictions made it appear. Under the circumstances it would thus seem the height of naiveté to declare that manufacturing, once established in the colonies, would, “Pave the way still more to the future grandeur and glory of America; and, by lessening its need of external commerce, will render it still securer against the encroachments of tyranny.” Strictly speaking, this was true. The 18^th century American colonies did possess a vast store of untapped economic potential which a few short decades would see fantastically unleashed. And much of the economic growth that followed did result from the utilization of American produce, raw materials, manufacturing, and transportation technologies. This economic renaissance was, however, a great many years from becoming a reality at the time A Full Vindication was written.

In light of Hamilton’s famously pragmatic turn of mind, it would seem strange for him to have nurtured such an idealistic vision. Granting that his youth at the time of writing may have inclined him to view his adopted homeland’s prospects more favorably than a man of greater wisdom and maturity, this would still seem to conflict with his otherwise hard-nosed approach to political discourse. To that end, it may have been that Hamilton was simply deploying a rhetorical device disguised as a pragmatic assessment of America’s economic potential. Seeking to sway an audience dependent on commerce into thinking that continued reliance on Britain was unnecessary, he simply attempted to portray the advent of America’s economic autonomy and prosperity as being somewhat nearer than he knew it to be. Events in the short term, and his role in them, would seem to bear this out. The Jay Treaty, signed in London in 1794, made significant concessions to British demands in an attempt to re-establish the commercial relationship that the Revolution had severed. In spite of the treaty being broadly reviled, and the principle negotiator John Jay (1745-1829) being widely burned in effigy, it was successfully ratified by the Senate in 1795. Symbolic of what he understood Britain and America as having to offer one another, Hamilton was a principle supporter of closer ties between the two and of Jay’s efforts in particular. Had he truly believed, as he seemed to in 1774, that America’s “future grandeur and glory” were near at hand, his ardent promotion of the Anglo-American relationship in the 1790s would be difficult to explain.    

This is, of course, only a theory. Hamilton may in fact have been far less knowledgeable at eighteen than he perhaps liked to think. Economics is an exceedingly complex topic, and though he was uniquely qualified to speak to the precarious finances of West Indies planters and merchants, it may have been the case that the interaction of supply, demand, resources, debt, infrastructure, and technology on a global scale were beyond Hamilton’s ability to accurately interpret at such a tender age. There can be no doubt that he was a logical, rigorous thinker, blessed with confidence, clarity, and drive. But he was also, as of 1774, sparsely educated. The events of the two decades that followed – service in the Continental Army, in Congress, at the bar, and in cabinet – would do a great deal to round out his understanding of economic theory and its practical applications. While this should not diminish the significance of his youthful projection of America’s vast potential – a projection which time would eventually validate – it ought to underscore both the uncertainty of the moment in which A Full Vindication was written and the shortcomings of its author. In spite of his evident presumptuousness, neither Hamilton nor any of his contemporaries really knew what was about to unfold. They tried their best to predict it, explain it, assuage fears and stoke jealousies. But in the end they were only small, imperfect humans groping for some sense of equilibrium amidst a particularly tumultuous moment in history. Despite his reputation, and the way that he carried himself during his life, Alexander Hamilton was as imperfect as any of them. For all his genius, his ambition, and his myriad accomplishments, he sprang as did so many of his fellow revolutionaries from humble beginnings. A Full Vindication is an early, somewhat awkward, but undeniably meaningful milestone along his journey.