Class conflict is not just one of a number of interesting conflicts that, for me, begin the founding of the country, but a main driver of forming the nation. The significant central story, really.

That doesn’t mean it’s the only story, but since it’s constantly overlooked and dismissed, I began to think that actually it must be the central story or people wouldn’t be trying so hard to get it out of the way. The book we’re talking about was published ten years ago, and I was writing very directly about current politics — the Occupy movement, the Tea Party movement — in the context of the founding moment.

I have a forthcoming book, which develops some of these themes to another level. Some of its material that’s already been covered in The Whiskey Rebellion, my first book, Founding Finance, and Declaration, my second book — they’re all telling different aspects of the same story.

But here I’m really focusing on [Alexander] Hamilton in more detail—in the Hamilton moment. And again, trying to push back against some of—putting it somewhat crudely—the hero worship and the lack of dimension that’s gone along with the Hamilton craze of recent years.

When Edmund Randolph brought the meeting together, he said, you know, the problem we have in this country is that we don’t have sufficient checks on “the democracy.” They were talking about what they saw as excessive representation of the will of ordinary working people in government.

The founders, those people at the convention, were very well-off, well-educated, upscale people. And so that’s what they feared. They feared the advance of working people into government, which had been happening because of the need for majority support for the revolution.

We should underscore the fact that the movement on behalf of the working class was largely led by white men. It wasn’t what we mean by democracy. Although there were women who led food riots, when you get to the leadership, you find white men like Herman Husband, who you mentioned, and Thomas Paine.

Yeah, it was super causal of the convention itself because it was a serious uprising in Western Massachusetts that spread all over Massachusetts and other parts of New England. Shays’ Rebellion was part of a whole kind of intercolonial movement where these things were happening in a bunch of places. This is just the most famous one. Revolutionary War veterans were being hit by incredibly crushing taxes, which were earmarked to pay interest to a small group of rich bondholders who were holders of the war debt.

They came home to a new constitution, the state constitution of Massachusetts, which actually tightened rules against voting and made it harder to vote than it had been before. And their farms were being foreclosed by the very same people who are the rich bondholders. They’re also the people who lend to ordinary people and charge extraordinarily exorbitant interest rates. And it just makes the whole revolution look like a complete scam.

So they started shutting down banks. They weren’t rioting in the classic sense necessarily, because these are veterans — they’re marching in good order. They have officers. They’re following orders. This is terrifying to elites around the country. Henry Knox wrote a letter to George Washington in which he’s basically saying, these people in every state wanted to seize power, divide property equally, and we’re not going to have any private property anymore. He was being a little hyperbolic, but some people did want to do stuff like that. And this is, of course, terrifying to the small group of elite people who are very invested in their own property and wealth.

Shays’ Rebellion is the famous thing that drives elites to the convention. But there was another thing that was equally important in scaring the elites of the country: the Pennsylvania legislature withdrew a bank charter from its private owners. And when Robert Morris, one of the richest merchants in America and one of those bank owners, said, this is confiscatory, you’re taking away my charter, it was pointed out to him by the radical democrats that, no, that charter is not your property. It’s the property of the people.

This was just as scary, I think, to the elites around the country as Shays’ Rebellion, because in Pennsylvania, you’ve got this radically democratic government where through legitimate electoral means, people are able to express themselves and obstruct the power of wealth.

Yeah, there’s a fundamental conflict in the revolution where the elites are like, we’ve got to have this revolution and get free of all this oppression by Britain so we can run our businesses the way we want and so forth. Ordinary people in mass numbers also wanted a revolution, because they thought it could be a revolution for changing things from the way they’d been for years. So the revolution seemed like an opportunity to bring these things together.

But really, there’s a fundamental conflict. The elites needed the people to be revolutionary, but they were not interested in sharing power and they were not interested in changing the economic structures that made them the elites. We still don’t often look at the Constitution as the elite attempt to resolve that fight in the elite’s favor, but that’s how I think the Constitution really functioned.

We live with this idea of the independent yeoman farmer. It is already incredibly reductive, but there were massive foreclosure crises marking this period. So, many people owned their own property, but they were frequently deeply indebted and got into cycles of bad debt. And this debt, of course, is to those very same people that we were just talking about — the elites who were in the business of lending money at exorbitant interest rates to the supposedly independent yeoman farmer. But they’re not independent very long in those kinds of debt cycles. And then those independent farming people, and artisans as well, end up working for the people who foreclosed them.

So there were mass epidemics of this. And the people who were being foreclosed had a very clear sense — they were extremely savvy about the economic nature of these problems.

But yeah, this myth of the kind of westward-moving yeoman farming family. It’s not that that ever happened, but there were whole periods where that was just kind of going away and people were quite, you know, educated. Even if they weren’t formally educated in how that was working, they knew they were being taxed to further enrich rich people.

I got into it by accident. I was trying to understand the Whiskey Rebellion of the 1790s, and I just backed into this, the debt issue, and I was very struck by it. This is around 2003. And I just thought I was going to write a quick, breezy, “founder’s chic” kind of book. And I just went into the library and didn’t come out for a long, long time. And when I came out, I was just stumbling around, like, whoa. It’s all different from what I thought it was. It’s much cooler as a story and much more timely. And then I got kind of obsessed. I didn’t intend to find these things out or get so interested in them.

I think he should be a central figure in the founding period. He was weird, but that’s what makes him kind of great. Also, he had a vision of a whole different way of structuring economics in America. One thing that makes it very difficult, I think, for people on the Left sometimes to embrace him — although he was an ancestor of the Left — is he had an actual vision, like a religious vision. He saw visions like Joan of Arc saw visions.

I think this makes him hard for people to sort of cope with, but it also makes him fascinating because he was intellectually very adroit, smart, self-taught, and everything. He also just had this powerful sense of right and wrong — these economic issues of right and wrong as being, you know, on a high moral plane, like ordained by God.

And my thing is, yeah, maybe he was kind of crazy because if you can imagine things like Social Security, New Deal kind of stuff in the way he started imagining these things before the revolution — so the first half of the eighteenth century — well, maybe you have to be crazy. But that should make him a paradigmatic American for us to get excited about.

And the regulation that you mentioned — that was his first real big political action. We talk about regulation now, regulatory economics and stuff. Regulation was a common term then for the people just getting up and regulating the economy because they didn’t have the vote; they didn’t have access to legitimate means to regulate. And that meant they would riot because that was the only means they had — they didn’t have legal means.

So Husband was a leader of the North Carolina regulation, and they carried out regulatory action like violently shutting down debt courts. Husband was actually nonviolent. He had been a Quaker for a while. But he was caught up in all that violence as the only way to really make a point back then. So he kept running into these nightmarish contradictions in his beliefs. And he hung with it.

The North Carolina regulation was put down by the royal governor of North Carolina with troops. Many people were hanged. Husband escaped at the last minute on horseback after trying to negotiate a settlement in which he knew he’d be hanged. But he was trying to get his comrades off the hook with a settlement — and it didn’t work out. He galloped away — it’s pretty dramatic stuff — fleeing into the backcountry of Western Pennsylvania. His wife and many children, following at a distance, joined him there.

Many of the people pushing in the legislature to have regulation put down were the very same people who were joining in Stamp Act protests and other more elite protests against the royal authority. They were happy to have royal authority put down — these really populist, really grassroots movements for equalizing things — but they were at odds with the governor over their own issues that led to the revolution.

So that’s an interesting conflict right there. Many of the former regulators of North Carolina actually became loyalists because they were sure their best bet didn’t lie with those East Coast elites who were rebelling against the King and parliament, but actually with the King and parliament, who at least sometimes would listen.

Day-to-day they struggled with a lack of money, with economic depression. Money was gold and silver, and this was a huge problem. Husband proposed going off the gold standard way back then. And even people on the Left were like, well, that’s crazy. But he thought that that was part of the problem — that everything was pegged to gold and silver, and he was right.

So they wanted paper money issues at low denominations. They wanted easy-term loans provided by government, things that would ease the depressions that haunted the countryside. They also wanted an end to corruption. The fact that, for example, a few local families would have all the government jobs and ordinary people were being taxed to provide nice stipends to people whose job was basically to collect those taxes.

There was a multitude of a different regulations on behalf of the elites, like Stamp Act stamps. You had to pay somebody for everything you were going to do. Meanwhile, you’re being foreclosed on. You’re becoming a worker for your creditors.

They wanted an end to all that kind of stuff. And they were quite articulate about it. I don’t mean just Husband. I mean the ordinary people of whom he was one of a number of leaders. It wasn’t confusing to them how all this worked to their detriment.

It’s the home, on the one hand, of the money people. It’s the money center of the country. And then you have this amazing thing that happens in the lead-up to independence.

Britain’s about to invade. We need ordinary people, you know, armed and ready. In Pennsylvania, thanks to some very adroit organizing by some brilliant people whose names are not that well known — [James] Canon, [Thomas] Young, and others — along with Thomas Paine, who is well known, organize that class of people who were the ordinary people who served in the militia, the privates.

They organize that class to basically rebel against the state — what was now becoming the state assembly, the provincial assembly, which was manned by elites. They shut it down, took it over, and wrote a new constitution. Philadelphia and 1776 — people go there and see all the famous sites and we know all about the famous people in 1776. But one incredible thing that happened in 1776 in Philadelphia and throughout Pennsylvania is the takeover of legitimate politics by the working class of the former colony, now state. They wrote a new constitution, and they made it so that there was no property qualification for voting, which was extremely radical at the time. And much further than that, they made it so there was no property qualification for holding office, which was just, out of sight to most elites, who just couldn’t imagine that you could have anything but sheer anarchy in that situation.

They started passing laws for debt relief for ordinary people, earmarking taxes for widows and orphans of the war and the privates — just kind of unheard of. This was democracy with the qualifications that I brought up before. We’re still talking about white men serving in public office and white men in voting. But I make the case that it was radical anyway, because what this revolution did was cut the connection between property ownership and representation in government. Nobody among the property owners thought that was feasible at all.

Yeah, they actually tried that. I mean, incredible, right? They tried that and even the Left of the day was like, whoa, whoa. That didn’t get into the Pennsylvania Constitution — but just the fact that they brought it up was amazing.

And of course, now we’re going back to what scared the elites into forming the Constitutional Convention — it’s because of radical things like this.

He comes into the story in a weird way because he was very young. He was not in Philadelphia in 1776, he joined the army and was on Washington’s staff. And he was extremely bright, focused, and eager to redo the entire country along the lines that he was reading about. He was an autodidact of economics, finance, and public finance.

I like pitting him against these people no one’s ever heard of, like Husband and Young and so forth. Because, you know, what they have in common, even though they’re on opposite sides, is the idea that the economic nation kind of is the nation. And Hamilton got it really early. He taught it to himself largely, and he had as a mentor Robert Morris, who is not that well known because he’s such an unedifying character. I think people who want to be excited about the founders don’t really like looking at Morris because he was a corrupt money guy. But without him, I don’t think the United States would have won the revolution, so that I think both of those things are true. And that irony should be just, you know, enjoyed to some degree.

So Hamilton comes into the orbit of Morris, and he’s already self-taught in public finance with the British banking system as his as his model. Morris likes that, too. And they form this partnership to try to bring about American nationhood — it’s the idea of forming a consolidated economic system that has them really pushing to form a nation out of this falling-apart confederation.

Yes, this is the thing Hamilton learned from Morris and ran with in order to get a hold of some money to fight the war back in 1776. There were a couple of places to go. One was other countries that were also at odds with England. So there was foreign debt. And so often when people talk about the founding debt of the United States, they focus exclusively on the foreign debt — to Holland and France and so forth.

The big piece of the debt to people like Morris and Hamilton — because they saw it as nation-building — was the domestic debt, which simply meant issuing bonds bearing 6 percent no-tax interest.

Yeah, exactly — to a small group of rich people. And they had to make them pretty attractive, because you’re betting on winning a war and somehow getting paid back. Many of the investors they got were Morris’s personal friends and part of his personal circle. So it was a very, very inside thing to fund the war.

In my new book, I’m trying to go at this: I’m like, we talk about the public debt of the United States and everyone’s like, oh, yeah, wow, we’ve got to deal with this debt problem. This is not how Hamilton and Morris saw public debt. They saw it as a massive opportunity to consolidate wealth in the hands of the class — Morris’s class, really — who they believed were going to be the drivers of big projects like infrastructure, industrialization, exports, and all the stuff they wanted for the country. So the debt was a positive thing to them.

Yeah, it was very precisely regressive. That’s a good way to put it. You spread the payback around through a lot of people. That’s how you concentrate. From the point of view of the bondholders, the idea was that for four generations, you get paid interest and make money on your money with a slow pay down schedule. The way you do that is by taxing more people and keeping the burden off the class you’re trying to benefit. And they didn’t make any bones about this, as you said.

He saw it as a class war, and so did the people he was warring against — the ordinary people. It was a class war, and it was a fight between classes over who gets to govern and on whose behalf is government supposed to operate.

The issue for Morris and Hamilton in the Continental Congress was to get a tax passed that the Congress could levy against everybody throughout the country. It was actually going to be levied against merchants. It was an import tax. But for Morris, it was just a wedge. Once they got that through the Congress, he felt they could get all kinds of other taxes that would affect more people and take some of the burden off his people, the merchants. But it starts with an import tax court. They called it the impost.

The idea was to get this taxed throughout the country so there would be money earmarked for paying the bondholders their interest. Because as they see peace on the horizon, what’s going to hold this whole thing together? The states are going to go their separate ways. The democracy, as they called it, was making inroads not only in Pennsylvania, but elsewhere. The bondholders couldn’t see how they were going to get paid their interest and how their children were going to become fabulously wealthy and not have to work ever.

So the idea was to pass a tax that was pervasive throughout the country and operating not through the state systems, which were so cumbersome and subject to popular pressures, but by the Continental Congress itself, by what they were calling the federal government. This was a big deal to try to get through, because taxing power as a sovereign power — people thought that was a road to creating a national government, which they still didn’t want to do.

So while trying to get that tax passed, it just kept running into trouble in the Congress. And they kept thinking they were going to get it passed and then they couldn’t get it passed. There’s a lot of nuance there, but I’ll skip forward to the exciting fighting part: suddenly, turning up, in Philadelphia were some officers of the Continental Army who basically walked in and say to the Continental Congress, we haven’t been paid and we need to get paid. Peace is on the horizon. It was effectively a threat of not laying down their arms unless they got paid because they hadn’t been paid in years. This is the officer class. The men hadn’t been paid either, but the officer class was especially concerned about getting paid.

This creates an incredible opportunity for Morris and Hamilton to yoke the interests of the bondholding class to the interests of a class of people who are armed and very well-organized: the officer class of the revolution, who have men following them, who depend on them. So what Morris and Hamilton set out to do was leverage this coup threat coming from the Continental Army officers and force the Continental Congress to pass this tax on imports, which would be a wedge for further taxes, all to fund the bondholding class.

The question around this has always been, did they expect to actually have a military coup, or were they just threatening it? People argue about it — and I’m kind of like, well, that’s an interesting question. But if you’re threatening it, it’s kind of like an effective coup anyway because you’re saying, well, we might not lay down our arms unless we get paid.

So it’s quite a remarkable moment. And again, it’s not widely discussed because it raises so many conflicts about the integrity of the army, the integrity of the officer class, the integrity of the superintendent, Morris. Hamilton kind of comes into his own in this process, just basically telling the Continental Congress, we have to do this, we have to fund it, and we can’t just fund it for the officer class. We’ve got to fund it for everybody. He was effectively threatening the Congress with a military takeover unless they got this tax passed.

It could have really gone wrong for Hamilton there. His whole career could have ended right there. In the end, Washington managed everyone’s way out of this problem. Washington found a brilliant way to manage and handle the crisis, lower the temperature, get the bondholding class and the officers what they wanted, at least a promise. And at the same time, calmed the waters of a coup. The country could have devolved in civil war. We don’t know what would have happened. What’s fascinating to me is Washington got everything they wanted without that. And really, by the end of that episode, he had managed to get Morris what Morris wanted.

So you end up with the officer class of the country, the officer class of the revolution, welded to the bondholding elite. It’s like you’ve now militarized the bondholding elite and enriched the military. And that’s what came out of the Newburgh crisis.

So it was now the 1790s. The Constitution happens and for Hamilton, the Constitution was a mechanism for really centralizing wealth in the country and creating a financial elite totally connected to government, which in Hamilton’s vision is going to unlock its dynamic potential and turn the country into another version of Britain: with central banking, an ability to make war, an ability to build infrastructure, and an ability to just do huge new projects.

That’s the thing. The Constitution didn’t gave Hamilton everything. He wanted to dissolve the states as independent governments. He wanted to go all that way. There was no way that was going to happen. But he got certain tools out of the Constitution, and they’re very critical to bringing about his vision.

And one of them is to not let the states have their own money. I think the Constitution is the Hamilton Constitution, really. They got these finance provisions which makes the federal government very central in managing money through wealth and taxation. It had the power to tax, and it had the power to tax in any way it really wanted to — something that the old Continental Congress never had and Hamilton and Morris always wanted.

So you get a tax on ordinary people, the regressive tax called the whiskey tax that Hamilton gets passed. The whole idea is to spread the paying around and then earmark it for a small group of rich bondholders, and yoke the bondholders’ gain and interests to big public projects.

But that democratic movement that we were talking about before did not disappear during this period. It went through changes. The link really is Herman Husband, because he shows up in the Whiskey Rebellion.

The intention of the tax was to disable the popular movement of the populists, the people we’ve been talking about, the democracy. And it really just crushed the place where the democratic action had really shifted to — the West, as it was called then. At that time this would be around the Ohio River in Western Pennsylvania, where the best whiskey was made — it was very much in demand. And it’s where democracy, the old sort of surging democracy, the whole anti-elitist impulse that had created Husband originally, had focused itself by this time.

Hamilton presented the whiskey tax as an innocuous tax on a luxury item. You can take it or leave it. And it sounds sort of convincing to people in Congress who didn’t know economics that well. But the people on the ground knew economics really well, and they knew that there were all kinds of mechanisms built into that tax. They could see it right away, the whole thing was designed to put the small producer out of business and consolidate the industry around big producers, which is what Hamilton wanted to do to the whole economy: get all these people who think they want to have their own little farms and artisan shops working for a few rich people. And they’re going to be productive this way and they’ll be happier that way in the end. It was an industrial vision of great scope. He was looking to a future of industrialized factory work at a time when it hadn’t really happened yet.

So the whiskey tax is a wedge for all that. It really doesn’t have that much to do with people liking to drink whiskey, which is the way it’s often been presented and how Hamilton liked to present it to the public.

What became called the Whiskey Rebellion was suppressed militarily by the federal government with incredible, absurd force. It was the last gasp of the democracy, as it was called. It had an impact over many years during the colonial period; it tried to become part of the country and get the country aligned around democratic economic ideas. I mean, they were talking about seceding, having the western part of the country secede and cut the eastern capitals off from the potential wealth of the West.

Yeah, this is the problem, we started with: Who are we looking to in the founding period? There’s all this shoehorning of Thomas Jefferson into being a progressive or Hamilton into being a progressive. And it’s just gone around and around like a flavor of the year, because we’re not looking at the right people for these issues.

I mean, you can look at those people. It’s important to know what Hamilton was really up to. It’s very complicated to get into how the Jefferson-Madison world functions in relation to this too. But we’re not looking enough at Husband, we’re not enough looking at Young and Cannon.

The past is not that long ago, in certain ways. And all these issues that they were dealing with are still here now.