Founding Finance: How Debt, Speculation, Foreclosures, Protests, and Crackdowns Made Us a Nation

Discovering America

by William Hogeland

Recent movements such as the Tea Party and anti-tax "constitutional conservatism" lay claim to the finance and taxation ideas of America's founders, but how much do we really know about the dramatic clashes over finance and economics that marked the founding of America? Dissenting from both right-wing claims and certain liberal preconceptions, Founding Finance brings to life the violent conflicts over economics, class, and finance that played directly, and in many ways ironically, into the hardball politics of forming the nation and ratifying the Constitution—conflicts that still continue to affect our politics, legislation, and debate today. Mixing lively narrative with fresh views of America's founders, William Hogeland offers a new perspective on America's economic foreclosure crises that make our current one look mild; investment bubbles in land and securities that drove rich men to high-risk borrowing and mad displays of ostentation before dropping them into debtors' prisons; depressions longer and deeper than the great one of the twentieth century; crony mercantilism, war profiteering, and government corruption that undermine any nostalgia for a virtuous early republic; and predatory lending of scarce cash at exorbitant, unregulated rates, which forced people into bankruptcy, landlessness, and working in the factories and on the commercial farms of their creditors. This story exposes and corrects a perpetual historical denial—by movements across the political spectrum—of America's all-important founding economic clashes, a denial that weakens and cheapens public discourse on American finance just when we need it most.

Genres: History, Economics, Nonfiction, Politics, Business, Finance, American History

284 pages, Hardcover

First published October 1, 2012

Reviews

[Christopher Mitchell · Rating 4 out of 5]

This was a surprising book, both in that I learned many new things about the revolutionary time period but also in the direct way the author engages other historians that appear to have covered up or at least disregarded interesting facts about what we would now call the class conflicts between various actors in that period. Run on sentence, run on!

Looking forward to more books from this series. It was a very good read and offers a well-nuanced dose of history.

[James · Rating 5 out of 5]

Written in the wake of the Occupy and Tea Party political/economic movements, Hogeland invites the reader to ponder (with ample supporting historical evidence) questions that might assail one’s starry-eyed recollections of American history and confront severe misconceptions about the founding principles of the United States. Did class matter before and after the American Revolution? Were disenfranchisement and economic inequality baked into the Constitution via financial politics that ultimately necessitated the formation of a central taxing authority? Was the pioneering American yeoman largely a myth in the face of the all-too-familiar reality: landlords and tenants, industry and artisans, power and populism?

This was a fascinating reintroduction to the cast of characters whose ideology shaped every aspect of American life, and an immensely readable survey of a hinge point in global history. Herman Husband stands out especially as worth more research.

While I am all too attached to my fond memories of early American history education, I do believe there is incredible value in exploring present-day research which offers more than a pop-history patriotism or oversimplification to fit established stories. While this book challenges very common and popular ideas, it does NOT irresponsibly project the economic problems of today onto our founding story. Rather, it compels us to examine the country in which we live today and ask honestly, with a fuller view of history, if things have truly changed all that much…

[Riq Hoelle · Rating 3 out of 5]

I would characterize this book not as crypto-Marxist, but as Populist materialist with New Left instincts.

The author is a writer (majored in literature, writing, theater), not a professional historian. This book is often a little shaky on the nuances. Examples:
- Sees the Regulators in pre-Revolutionary North Carolina a war between merchants/lenders and the everyday man and extrapolates that to all 13 colonies. But even neighboring Virginia and South Carolina did not have equivalent Regulator movements. This movement should be seen for what it was: resistance to poor political structure and endemic corruption in North Carolina at that time.
- States that Voltaire was Swiss. In reality he was French, but lived his last two decades in Geneva.
- States that John and Samuel Adams helped overthrow the Dickinson-led Assembly in Pennsylvania by giving secret aid to Pennsylvanians. There isn't one shred of written evidence that this was the case, even in the writings of Dickinson. The inference that it must be true because the Pennsylvanians used committees of correspondence as Samuel Adams had in Massachusetts doesn't hold up because such committees had been used for a long time - even in England - and the practice was well-known.
- States that the philosopher David Hume advocated the advantages of public debt. In reality Hume was against public debt, but in one essay did admit it might have some temporary benefit in very specific situations.
- Doesn't seem to understand how Robert Morris operated trade to benefit the Republic and only sees it as sort of a cash grab. In fact Morris and Deane combined the country's business with their own as a cover to prevent the British from realizing that France was subsidizing their efforts. Morris' work is consistently depicted as self-aggrandizing to his class, but there is little mention of the context: the desperate need of Congress for money to keep the war afloat.

There are several more examples.

The book also interrupts the narrative with modern topics like the Tea Party movement and Occupy Wall Street much too often.

What it does well - it's main objective - is to point out that when people look for precedents in the economic ideas of the founders they are usually barking up the wrong tree. The Regulators, for example, were populists on the left, but also deeply inspired by religion, a combination that is not common today. Those who participated in the Boston tea party were involved with merchants (smugglers) - the nearest thing to big business at the time (though it's incorrect to equate them with later big business) - who benefited from destruction of lower-priced tea. And so on.

It also realizes certain facts that other books (Chernow's included) do not, for example, that Hamilton's financial program was not original, but inspired by his mentor and Washington's first choice for Treasury, Robert Morris. Another is that the purpose of assuming the state debt was to set up a funding program for the debt that would draw in wealthy investors. But it goes too far in assigning Hamilton deviousness with regard to the Whiskey Tax. His plan there is adequately explained by accidence/ignorance and there is no incriminating document to directly support the allegation.

[Ryan Ward · Rating 5 out of 5]

Hogeland decimates sacrosanct notions of the founding of the US as some idealistic project by benevolent men dedicated to universal human rights and welfare. He situates the founding in explicit terms of class conflict between wealthy elites and the working class, and provides overwhelming evidence that the Constitution was a terrified attempt to suppress the radical egalitarian movement that took hold in the years preceding the American Revolution and reached a fever pitch in the years after. His evisceration of Alexander Hamilton is most enjoyable, and telling, for how it places Hamilton's entire financial system as a way to continually generate capital on the investments of wealthy creditors (in the form of national debt) via taxing the public in perpetuity and consolidating market control in the hands of a wealthy elite. A bracing, infuriating, and galvanizing historical cleansing.

[Lynda Ryan · Rating 5 out of 5]

An interesting analysis of America's founding

A detached look at the dynamics of the interactions of the "elites" that steered the direction and focus of the government United States with the more numerous creditor class. While the concerns of those struggling to eke out a living took second place to the establishment of a nation stabilized by incentives given to those with the wealth and power to materially support the fledgling nation, their protests nevertheless did manage to make themselves felt. It is due more to their forceful demands that their voices be heard than to the genius or benevolence of the founding fathers that America became as egalitarian as it did.

[Greg Young · Rating 5 out of 5]

Fascinating and learned a different view of the ‘Founding Fathers’. Who have been co-opted like religious figures from history by the left and right.

[Mike Lund · Rating 4 out of 5]

Great Book.

Great book. Informative. Eye opening. Sometimes a little challenging to read. Written as a History, not History as Entertainment. Covers a vast range of topics that became the foundation of our country but often radical for their times. Taxation, national debt, printing Federal certificates, bonds, paying the American forces (mostly just officers). It also covers the responses, such as: 1786 Shay’s rebellion, State response to State Debt, 1783 Newburgh Crisis, 1791 Whisky Rebellion, 1798 Virginia Resolution, the Alien and Sedition acts, the Alien Friends Act of 1789, the Christian Awakening (1790-1840) ect. Unfortunately, I finished the book last month and should have written the review then. But defiantly eye opening.

[Carl Johnson · Rating 4 out of 5]

Unlike most economic histories of the American Revolution, which focus on the broad interests of significant factions or the personal interests of significant individuals, Founding Finance explores not just how the sausage but the extents (previously unexamined) to which certain individuals would go to achieve their aims at any expense--with unexpected consequences.

[Peter · Rating 3 out of 5]

Historian William Hogeland published Founding Finances: How Debts, Speculation, Foreclosures, and Crackdowns Made Us A Nation in 2012. The book is a series of essays about the economic philosophy of the American Revolution. The book is a series of essays about essays, but the essays are linked to each other. The book also heavily criticizes previous historians for what Hogeland strongly believes misinterprets the historical record regarding the economic philosophy of the American Revolution to serve the historian's own ends. This is the purpose of Chapter 5, which is entitled “History on the Verge of Nervous Breakdown” (Skeel 2012). He criticized both economically conservative and liberals for how they presented the finances of the American Revolution in their writings. The book includes a section of illustrations. The book was written during the Occupy Wall Street Movement and the Tea Party Movement. Hogeland criticizes both movements for how they misinterpret the philosophy of the American Revolution for their purpose. Hogleland believes that the history of finances in the American Revolution is complex. Neither the Tea Party Movement nor the Occupy Wall Street acknowledge the complexity of that history (Skeel 2012). The book includes a bibliographical essay. The book consists of an index. The book contains a section on references. I found Hogeland’s book Founding Finances to be readable. I found the book review by law professor David Skeel helpful in writing this ‘review.’
Works Cited:
Gitlin, Todd. 2012. Occupy Nation: The Roots, The Spirit, and the Promise of Occupy Wall Street. New York: HarperCollins Publishing, Incorporated.
Skeel, David. Review of Founding Finances: How Debts, Speculation, Foreclosures, and Crackdowns Made Us a Nation by William Hogeland. Books and Culture: A Christian Review. Christianity Today. December 2012. Founding Finance | Books and Culture

[Scott Erickson · Rating 4 out of 5]

I was led to this book while doing research on the early history of the U.S. economy. This book is an eye-opener! American history is full of a lot of insane and shocking things that school textbooks generally leave out. Alexander Hamilton is thought by many as a national hero, but he instituted an American economic system based on benefits for the wealthy and a system of U.S. debt to be paid off by taxpayers. Sound familiar? He also convinced Washington to organize the first official U.S. military force, to be used against poor farmers who rebelled against unjust taxation and an economy rigged against them. Interesting stuff they never told me in school.

[Vincent Li · Rating 2 out of 5]

Thought provoking, and definitely raises some interesting questions. For me though it's far too revisionist, too many assertions and assumptions that are not proven. Two smaller mistakes I caught is that the author called Voltaire, the proud frenchman Swiss, and his claim that the creation of the upper unelected house (the senate) stifled the radical state legislatures doesn't make any sense, considering that the senate before the progressive era was elected by individual state legislatures.

[Kitch Kandack · Rating 4 out of 5]

Well-written but dry as the Sonoran. Eminently readable even for an American History retard like myself.