This piece compares Alexander Hamilton’s economic approach with Milton Friedman’s, responds to Vice President JD Vance’s push toward Hamiltonian ideas, and argues that invoking Hamilton to justify permanent state-directed industry misunderstands both history and conservative principles.
Does the future of conservative economic thought belong to Alexander Hamilton or Milton Friedman? Vice President JD Vance has suggested a shift away from Milton Friedman and toward Alexander Hamilton, arguing that conservatives should favor a more active federal role in shaping industry and national capacity. That argument raises the question of whether Hamiltonian precedent supports a lasting program of state intervention or only temporary measures for a specific historical moment.
Vance called for what he labels “American developmentalism,” a plan where the federal government consciously steers economic outcomes to strengthen the nation, bind communities, and bolster working families, all grounded in Christian morality. Michael Knowles agreed on the stage, insisting Hamilton, as a Founding Father, is arguably more “conservative” than Friedman.
The problem is that Hamilton’s economic toolkit does not map cleanly onto modern industrial policy or a lifelong state-guided economy. The measures Hamilton favored had distinct rationales tied to a newborn country with almost no industry or capital markets. The common thread with modern proposals is direction from the state, but the motives, goals, and conditions were far from identical.
Take tariffs. Hamilton supported protective duties, but mainly as short-term scaffolding to nurture fledgling American manufacturing against an industrial Britain that had a century’s head start. In his time protectionism was a pragmatic, temporary device to build capacity, not a permanent ideological stance on trade policy. It was meant to create a baseline of industry that could later compete on its own terms.
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Context matters. The United States now sits at the top of the global economic ladder, and tariffs today are deployed largely for national security or targeted industrial-policy reasons rather than to birth an industrial base from scratch. Hamilton envisioned an eventual world without trade barriers, and his tariffs tended to average eight to fifteen percent, compared with roughly 2.5 percent by 2024. Back then tariffs also played a central role in funding the federal government, a role now largely replaced by the income tax.
Hamilton also treated the flow of foreign goods differently than modern protectionists. He saw imports not as a threat to be feared but as an asset that stimulated productive activity. He called them “a precious acquisition…a most valuable auxiliary, conducing to put in Motion a greater Quantity of productive labour, and a greater portion of useful enterprise than could exist without it.” That passage undercuts the notion that Hamilton would have backed contemporary rhetoric about trade deficits as an unqualified disaster.
It is true that Hamilton did not worship free markets. He deliberately used federal power to guide industry, to create credit systems, and to establish national financial infrastructure. But Hamilton’s guidance came from a starting point of scarcity and national survival, not from presuming that a mature, wealthy republic should rely on permanent dirigisme. That distinction matters when invoking his name for long-term policy.
Conservative economic thought, at its core, often rests on the link between economic freedom and political freedom. Thinkers like Milton Friedman argued that broader markets and fewer government controls protect individual liberty and decentralize power. In that sense, Friedman remains a central defender of a view that connects free markets to the health of constitutional government and civil society.
Hamilton’s achievements are real and monumental: he built institutions where there were none and stabilized public credit, creating the skeleton of an American financial system. Those actions were suitable for an era when the United States could not function as a modern economy without aggressive federal initiatives. But a system designed to birth a nation is not automatically the correct template for managing the richest economy ever assembled.
Vance and his allies want Hamilton’s willingness to use state power to build and protect industry, but they often leave out Hamilton’s explicit endgame: using the state’s hand to get industry on its feet and then releasing it. Making that temporary machinery permanent is not Hamiltonian in spirit; it is a new doctrine dressed in a Founding Father’s name. That rhetorical move risks substituting enduring government direction for the liberal, market-based freedoms that have defined much of conservative economic identity for generations.
