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Crikey, he& #39;s going to win 30 states isn& #39;t he. Hamilton tried to warn us about this, but did we listen? Noo...
1/n
1/n
Side not I used to say that I supported Jefferson in theory but Hamilton in practice, aside from the tariffs, of course.
I may be coming around on the tariffs bc it looks like they may have simply been a means to enact a more expansionary monetary policy under an a hard 2/n
I may be coming around on the tariffs bc it looks like they may have simply been a means to enact a more expansionary monetary policy under an a hard 2/n
currency system.
Hamilton biographer Ron Chernow writes:
"Hamilton preferred free trade, open markets, and Adam Smith’s “invisible hand.... but he... supported temporary mercantilist policies that would [lead] to a favorable trade balance & more hard currency."
To my 3/n
Hamilton biographer Ron Chernow writes:
"Hamilton preferred free trade, open markets, and Adam Smith’s “invisible hand.... but he... supported temporary mercantilist policies that would [lead] to a favorable trade balance & more hard currency."
To my 3/n
knowledge no economy has industrialized without either inflation or a rapidly growing trade balance.
The theoretical intuition is that industrialization is such a big deal bc there are massive spillover effects. Investment in one industry or firm create thicker markets 4/n
The theoretical intuition is that industrialization is such a big deal bc there are massive spillover effects. Investment in one industry or firm create thicker markets 4/n
more physical and social infrastructure as well as simply knowledge that increase the return on investment other industries.
This means there is a coordination problem where if everyone agreed to rapidly invest more all at once we would all be richer but it& #39;s in none of 5/n
This means there is a coordination problem where if everyone agreed to rapidly invest more all at once we would all be richer but it& #39;s in none of 5/n
our individual interests too create that much capacity and put so much capital on the line.
Overheated monetary policy or a rapidly
growing trade balance overcomes this by inducing unsustainably high demand growth. That in turn induces "over" investment by firms but bc of 6/n
Overheated monetary policy or a rapidly
growing trade balance overcomes this by inducing unsustainably high demand growth. That in turn induces "over" investment by firms but bc of 6/n
spillovers that "over" investment by each individual firm leads on avg to higher productivity for every other firm & hence genuine demand for high investment.
The result is a (good) Red Queens race between excess demand growth & increased productivity growth from spillovers 7/n
The result is a (good) Red Queens race between excess demand growth & increased productivity growth from spillovers 7/n
The race ends when the spillovers advantages exhaust, productivity can no longer keep up and excess demand leads to rising inflation or deteriorating terms of trade.
The "industrializing economy" doesn& #39;t have to be a nation. This effect is why industry in pre-industrial 8/n
The "industrializing economy" doesn& #39;t have to be a nation. This effect is why industry in pre-industrial 8/n
nations often boomed near capitals. The excess demand provided by the court surved the same function. 9/n
