Read on Twitter
Crikey, he's going to win 30 states isn'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'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'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't have to be a nation. This effect is why industry in pre-industrial 8/n
The "industrializing economy" doesn'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
