In conservative circles of late there has been an ongoing conversation about a (seemingly) new approach to governance, “libertarian populism.” Timothy P. Carney, a senior columnist for the Washington Examiner, argues that “conservatives need to turn to the working class as the swing population that can deliver elections,” and to do that he suggests a kind of populism that “mesh[es] with free-market principles.” He envisions an agenda of breaking up the big banks, eliminating the payroll tax, ending corporate welfare, cleaning up the tax code, doing away with political privileges, and more.
This libertarian populism would certainly be a fresh alternative to the decades-old battle between conservatives and liberals, but it nevertheless has deep historical roots in the body politic. An understanding of its (noble) intellectual pedigree would help sharpen and amplify the approach that Carney and others are suggesting.
A good jumping-off point for this investigation is Ross Douthat’s July 28 New York Times column, in which he links libertarian populism to the political battles of 18th-century Britain, in particular the clash between the “country party” and the “court party.” The country party, led by Henry St. John, Viscount Bolingbroke, was “both conservative and populist at once: they regarded [their opponents’] centralization of power as a kind of organized conspiracy, in which the realm’s political, business and military interests were colluding against the common good.”
Thomas Jefferson, James Madison, and their Democratic-Republican party borrowed heavily from Bolingbroke in their critique of Alexander Hamilton’s financial centralization, a multipronged plan to assume state war debts, charter a private bank, use the tax code to support businesses, and generally establish a sound financial base for the new country’s subsequent economic growth.
What the Jeffersonians feared—and indeed what connects them to the libertarian populists—is the centralization of political power by the ruling class. The British “court party,” they believed, had undermined the public will by using royal prerogatives to buy off members of Parliament in a quest to unite the political and economic powers-that-be. This is precisely what they dreaded Hamilton was doing, especially by facilitating the “stock jobbing” that surrounded the First Bank of the United States. In a letter to George Washington, Thomas Jefferson worried that:
[Hamilton’s system is] calculated to undermine and demolish the republic, by creating an influence of his department over the members of the legislature. I saw this influence actually produced, & its first fruits to be the establishment of the great outlines of his project by the votes of the very persons who, having swallowed his bait were laying themselves out to profit by his plans: & that had these persons withdrawn, as those interested in a question ever should, the vote of the disinterested majority was clearly the reverse of what they made it. These were no longer the votes then of the representatives of the people, but of deserters from the rights & interests of the people: & it was impossible to consider their decisions, which had nothing in view but to enrich themselves, as the measures of the fair majority.
Madison added that the nexus between private wealth and the public good would ultimately lead holders of the bank shares to become “the praetorian band of the Government, at once its tool & its tyrant; bribed by its largesses & overawing it by clamours & combinations.”
Thus a core insight for understanding libertarian populism: The growth of government, when combined with the pursuit of private financial gain, runs the risk of undermining if not destroying the country’s democratic institutions. The moneyed interests whose economic dominance depends upon government rents can purchase legislators, thereby subverting the public interest and giving us what these days we call crony capitalism.
This is why Jeffersonianism was a small-government, localist movement. They feared that the centralization of power would mean inevitably that average people—in that day the yeoman farmer class—would lose out to the commercial and financial elite. Insofar as economic inequality was a concern for the Jeffersonians, it had to do with the extent to which government facilitated it.