Alexander Hamilton’s Timely Lessons for U.S. Industrial and Maritime Strength
The MOC
By
Michael D. Purzycki
June 1, 2023
The Sea Services play a vital role in keeping America strong, but without a strong defense industrial base, they cannot serve this role. As a maritime nation whose prosperity has always depended on trade, the United States has always needed maritime forces to protect its interests across the globe. When Americans fail to make the connection between prosperity and national power, they are apt to forgo long-term investments in the latter.
Members of America’s Founding generation knew there was a close link between national security and economic growth, and they resolved to build up the country’s defenses accordingly. Having fought the Revolutionary War against a much better-armed and better-funded adversary in the form of Great Britain, President George Washington was determined that the U.S. should be self-sufficient when it came to its security. In his 1790 State of the Union address, he told Congress: “A free people ought not only to be armed but disciplined; to which end a Uniform and well digested plan is requisite: And their safety and interest require that they should promote such manufactories, as tend to render them independent on others, for essential, particularly for military supplies.”
Secretary of the Treasury Alexander Hamilton, the most influential Founder in the development of early American manufacturing, saw clearly how much the young republic needed its own defense industrial base. In his 1791 Report on Manufactures, Hamilton wrote: “Not only the wealth; but the independence and security of a Country, appear to be materially connected with the prosperity of manufactures…The extreme embarrassments of the United States during the late War, from an incapacity of supplying themselves, are still matter of keen recollection: A future war might be expected again to exemplify the mischiefs and dangers of a situation.”
Hamilton went even further in his insistence that America be self-sufficient in materials for defense. In his renowned 2004 biography, Ron Chernow notes: “So vital were supplies to national security that Hamilton did not rule out government-owned arms factories.” The godfather of American industrial policy realized that market forces, while they could bring many benefits, could not be relied upon for all of the country’s needs.
Knowing that international trade was vital to the early republic, Hamilton advocated for a strong navy to protect American shipping when writing: “The want of a Navy to protect our external commerce, as long as it shall Continue, must render it a peculiarly precarious reliance, for the supply of essential articles, and must serve to strengthen prodigiously the arguments in favour of manufactures.”
The Continental Navy had been disbanded after the Revolution, but the threat of the Barbary States to U.S. merchant vessels in the Mediterranean reminded Americans of the connection between their country’s naval power and its ability to trade in international markets. The Naval Act of 1794 authorized the construction of the U.S. Navy’s first six frigates, including the famous USS Constitution. By the time President Thomas Jefferson dispatched the Navy to fight the Barbary States, it was well-prepared and well-armed, and it defeated a menace to American commerce.
The way Hamilton recognized trade’s importance also led him to establish the Revenue Cutter Service, predecessor of the U.S. Coast Guard. This seagoing force collected tariffs, a major source of revenue for the early federal government. While the U.S. at times in its history has benefited from free trade, early tariffs were essential to giving U.S. manufacturing time to develop by curbing foreign imports. Had it tried to compete on its own with British industry, it would have been soundly defeated, and the U.S. would have remained an impoverished agrarian nation.
There are lessons for today’s policymakers in Hamilton’s actions. As noted by defense experts Timothy A. Walton and Bryan Clark of the Hudson Institute, Hamilton “led the passage of legislation that required trade between U.S. ports to be conducted by U.S.-flagged vessels, which mirrored the laws of most major countries at the time.” This was the equivalent of the Jones Act more than two centuries ago.
Today, the Jones Act, which requires cargo shipped between U.S. ports to be carried on American-built, U.S.-flagged vessels with at least 75% American crew, helps ensure that America has a Merchant Marine well practiced in its trade. While the law is often criticized, such criticisms ignore the importance of sealift to American security. Sealift vessels, operated by U.S. Merchant Mariners, transport 90% of U.S. Army and Marine Corps combat equipment and supplies. This is a skill that needs constant practice to learn and maintain, if the U.S. is to retain the ability to protect its interests across vast oceans, such as NATO allies who live under the threat of Russian attack.
Likewise, the CHIPS and Science Act passed in 2022, with its goal of ensuring that America can meet one of its key defense-industrial needs, has much in common with Hamilton’s industrial policy. It devotes $39 billion to helping U.S. semiconductor manufacturers increase domestic production. Secretary of Commerce Gina Raimondo noted in February of 2023, “many of our defense capabilities – like hypersonic weapons, drones, and satellites – depend on a supply of chips that aren’t currently produced in America.” The legislation tackles the threat of semiconductor deficiency in the U.S., and not only because the U.S. military must have a ready supply. It is also because semiconductor manufacturing is heavily concentrated in Taiwan, an island under constant threat of Chinese attack. Overreliance on distant supplies of key items is a vulnerability for military forces, such as a U.S. Navy that might have to fight off a Chinese invasion of Taiwan.
Like when America was founded, America’s maritime power still depends on its industrial strength. If the United States does not maintain its defense industrial base, its Sea Services will not be able to fulfill their mission. When policy makers are deciding how to keep America strong at sea, they can look to Hamilton as a guide.
Michael D. Purzycki is an analyst, writer, and editor based in Arlington, Virginia. He has worked for the United States Navy, Marine Corps, and Army. The views expressed here are entirely his own.
The views expressed in this piece are the sole opinions of the author and do not necessarily reflect those of the Center for Maritime Strategy or other institutions listed.
Center for Maritime Strategy
By Michael D. Purzycki
The Sea Services play a vital role in keeping America strong, but without a strong defense industrial base, they cannot serve this role. As a maritime nation whose prosperity has always depended on trade, the United States has always needed maritime forces to protect its interests across the globe. When Americans fail to make the connection between prosperity and national power, they are apt to forgo long-term investments in the latter.
Members of America’s Founding generation knew there was a close link between national security and economic growth, and they resolved to build up the country’s defenses accordingly. Having fought the Revolutionary War against a much better-armed and better-funded adversary in the form of Great Britain, President George Washington was determined that the U.S. should be self-sufficient when it came to its security. In his 1790 State of the Union address, he told Congress: “A free people ought not only to be armed but disciplined; to which end a Uniform and well digested plan is requisite: And their safety and interest require that they should promote such manufactories, as tend to render them independent on others, for essential, particularly for military supplies.”
Secretary of the Treasury Alexander Hamilton, the most influential Founder in the development of early American manufacturing, saw clearly how much the young republic needed its own defense industrial base. In his 1791 Report on Manufactures, Hamilton wrote: “Not only the wealth; but the independence and security of a Country, appear to be materially connected with the prosperity of manufactures…The extreme embarrassments of the United States during the late War, from an incapacity of supplying themselves, are still matter of keen recollection: A future war might be expected again to exemplify the mischiefs and dangers of a situation.”
Hamilton went even further in his insistence that America be self-sufficient in materials for defense. In his renowned 2004 biography, Ron Chernow notes: “So vital were supplies to national security that Hamilton did not rule out government-owned arms factories.” The godfather of American industrial policy realized that market forces, while they could bring many benefits, could not be relied upon for all of the country’s needs.
Knowing that international trade was vital to the early republic, Hamilton advocated for a strong navy to protect American shipping when writing: “The want of a Navy to protect our external commerce, as long as it shall Continue, must render it a peculiarly precarious reliance, for the supply of essential articles, and must serve to strengthen prodigiously the arguments in favour of manufactures.”
The Continental Navy had been disbanded after the Revolution, but the threat of the Barbary States to U.S. merchant vessels in the Mediterranean reminded Americans of the connection between their country’s naval power and its ability to trade in international markets. The Naval Act of 1794 authorized the construction of the U.S. Navy’s first six frigates, including the famous USS Constitution. By the time President Thomas Jefferson dispatched the Navy to fight the Barbary States, it was well-prepared and well-armed, and it defeated a menace to American commerce.
The way Hamilton recognized trade’s importance also led him to establish the Revenue Cutter Service, predecessor of the U.S. Coast Guard. This seagoing force collected tariffs, a major source of revenue for the early federal government. While the U.S. at times in its history has benefited from free trade, early tariffs were essential to giving U.S. manufacturing time to develop by curbing foreign imports. Had it tried to compete on its own with British industry, it would have been soundly defeated, and the U.S. would have remained an impoverished agrarian nation.
There are lessons for today’s policymakers in Hamilton’s actions. As noted by defense experts Timothy A. Walton and Bryan Clark of the Hudson Institute, Hamilton “led the passage of legislation that required trade between U.S. ports to be conducted by U.S.-flagged vessels, which mirrored the laws of most major countries at the time.” This was the equivalent of the Jones Act more than two centuries ago.
Today, the Jones Act, which requires cargo shipped between U.S. ports to be carried on American-built, U.S.-flagged vessels with at least 75% American crew, helps ensure that America has a Merchant Marine well practiced in its trade. While the law is often criticized, such criticisms ignore the importance of sealift to American security. Sealift vessels, operated by U.S. Merchant Mariners, transport 90% of U.S. Army and Marine Corps combat equipment and supplies. This is a skill that needs constant practice to learn and maintain, if the U.S. is to retain the ability to protect its interests across vast oceans, such as NATO allies who live under the threat of Russian attack.
Likewise, the CHIPS and Science Act passed in 2022, with its goal of ensuring that America can meet one of its key defense-industrial needs, has much in common with Hamilton’s industrial policy. It devotes $39 billion to helping U.S. semiconductor manufacturers increase domestic production. Secretary of Commerce Gina Raimondo noted in February of 2023, “many of our defense capabilities – like hypersonic weapons, drones, and satellites – depend on a supply of chips that aren’t currently produced in America.” The legislation tackles the threat of semiconductor deficiency in the U.S., and not only because the U.S. military must have a ready supply. It is also because semiconductor manufacturing is heavily concentrated in Taiwan, an island under constant threat of Chinese attack. Overreliance on distant supplies of key items is a vulnerability for military forces, such as a U.S. Navy that might have to fight off a Chinese invasion of Taiwan.
Like when America was founded, America’s maritime power still depends on its industrial strength. If the United States does not maintain its defense industrial base, its Sea Services will not be able to fulfill their mission. When policy makers are deciding how to keep America strong at sea, they can look to Hamilton as a guide.
Michael D. Purzycki is an analyst, writer, and editor based in Arlington, Virginia. He has worked for the United States Navy, Marine Corps, and Army. The views expressed here are entirely his own.
The views expressed in this piece are the sole opinions of the author and do not necessarily reflect those of the Center for Maritime Strategy or other institutions listed.