Continuing with my review of The Federalist Papers, I’m going to move to a couple of short excerpts from #21 from Alexander Hamilton (did you know his political career was nearly capsized by a sex scandal?). I love this first line:
The wealth of nations depends upon an infinite variety of causes. Situation, soil, climate, the nature of the productions, the nature of the government, the genius of the citizens, the degree of information they possess, the state of commerce, of arts, of industry, these circumstances and many more, too complex, minute, or adventitious to admit of a particular specification, occasion differences hardly conceivable in the relative opulence and riches of different countries. The consequence clearly is that there can be no common measure of national wealth, and, of course, no general or stationary rule by which the ability of a state to pay taxes can be determined. . .
This is an interesting declaration that I will admit I don’t fully understand. His argument seems to be essentially that there are too many intangibles in determining the true wealth of a nation, which lesson he then turns and applies to the impracticability of imposing a just tax on states. This quick dismissal of any attempt to quantify national wealth seems suspect to me, which is why I think I don’t fully understand this. It may be possible that there are political obstacles to a state tax which Hamilton doesn’t want to address here. He then goes on to examine taxation more carefully:
Imposts, excises, and, in general, all duties upon articles of consumption, may be compared to a fluid, which will, in time, find its level with the means of paying them. The amount to be contributed by each citizen will in a degree be at his own option, and can be regulated by an attention to his resources. The rich may be extravagant, the poor can be frugal; and private oppression may always be avoided by a judicious selection of objects proper for such impositions. If inequalities should arise in some States from duties on particular objects, these will, in all probability, be counterbalanced by proportional inequalities in other States, from the duties on other objects. . .
I also found this interesting. This sounds like an awful lot like a description of the ideals of a free market–that imbalances will organically be corrected, without requiring the constricting oversight of regulation. I suppose this philosophical underpinning in capitalism is unsurprising–Hamilton did become the Secretary of the Treasury, after all. However, my understanding is that Hamilton’s running of said office resulted in more central planning than otherwise.