Hamilton vs Jefferson: The Economic Implications for the USA

This article explores the economic implications of the Hamilton vs Jefferson debate for the USA. It discusses the Federalists and Jeffersonian schools of thought, the role of James Madison, and the emergence of the USA as a world power. The article also highlights the importance of a balanced constitution for the growth of every sector of society and industry.

Question 1
Right after the declaration of independence, the thinkers of that era were planning to come up with
policies that can be implemented as an action plan and galvanize the workforce and economic
resources of the USA to become a strong and economically independent nation. There were two
schools of thoughts that were present during that era. First one was the group of Federalists, under
the leadership of the Hamilton and second was the Jeffersonian working under the leadership of
Thomas Jefferson. Federalists were advocating the concept of the industrialization; Jeffersonian was
looking more towards an agriculture-based economy (Jefferson, 2018). The immediate economic
implication of this contradiction between Hamilton and Jeffersonian individuals was related to the
constitution of the banks as an organization for the country (Fraser, 2011). Hamilton was seeking for
a centralized banking system looking for the collection of the funds from the states and reallocating
them. Jefferson, on the other hand, was considering this type of an arrangement equivalent to the
days of the British Tyranny.
Question 2
Federalists under the leadership of Hamilton were seeking for an industrial economy. Where large
scale industries can utilize the resources and the workforce of USA, according to the federalist’s
industrialization was the need of the hour because it was a means to ensure a strong presence of the
country in the field of international trade and especially on the frontier of the balance of the
payments.
Question 3
In order to create an amicable surrounding for the development of the right kind of economic
environment, think tank following Jefferson was promoting the concept of a strong constitution to
run the affairs of the country. They were against any structure that gives an undue strength over the
others. They were not keen on entertaining a strong federal government taking the decisions for the

entire country where many states governments were assembled beneath the flagship of USA
(Cheney, 2014).
Question 4
The role of James Madison can be considered as the explorer of the middle path between thought
processes of Jeffersonian and Federalists. According to him the attempt to bend the constitution in
favor of the people or the states is wrong because excessive democracy can weaken the state
(Leigiber, 2014). It is true that Thomas Jefferson won the battle in the end and amended most of the
recommendations made by the federalists; he emerged as the face of the people of the new US. He
became a poster boy of the power of common US men; however, it was the injunctions of the James
Madison that gave us a balanced constitution with an opportunity for every sector of the society and
industry to grow in equal proportions. Here it would not be unfair to say that the policies of the
Hamilton and his conceptualization of the public debt finally served as the backbone of the
capitalism that helped the USA in becoming a world power within no time.

Bibliography
Cheney, L. (2014). James Madison: A Life Reconsidered. New York: Penguin.
Fraser, D. J. (2011). The Emergence of One American Nation: The Revolution, the Founders, and
the.Constitution. London: Fraser and Associates.
Jefferson, T. (2018). The Quotable Jefferson. Princeton : Princeton University Press .
Leigiber, S. (2014). A Companion to James Madison and James Monroe. New York: John Wiley and
Sons.