Launch of the OECD Economic Survey of the US


Launch of the OECD Economic Survey of the US



How, Once Upon a Time, a Dogmatic Political Party Changed its Tune

It is not always clear how much we Americans deep down deplore the polarized postures of our political parties. Most voters get some customer satisfaction from the polarization—at least inasmuch as they prefer “a choice, not an echo.” Nonetheless, as the partisan passions of the 2012 election start to subside, some of us wish that both parties could begin to moderate more of their orthodoxies, and find greater common ground to solve the country’s pressing problems. So, it is interesting to look back at U.S. history for times when such transformations took place.

An especially intriguing case occurred early in the 19th century. The story begins with a dimly-recalled existential crisis of the country in that period: the War of 1812.

The War of 1812

As in the Revolutionary War, the enemy in 1812 was Great Britain. But unlike the Revolution, this “second war of independence” was waged along party lines. Congress and the presidency were in the hands of the so-called Republicans (not to be confused with today’s party that bears the same name), who rammed through a declaration of war over the unanimous opposition of their rivals, the Federalists.

The administration, under James Madison, and congressional majority mostly botched the project almost to the end. The Republican president and lawmakers thrust the United States, woefully unprepared both militarily and financially, into armed conflict with the 19th century’s superpower. That the nation, so early in its infancy and vastly outgunned, ultimately emerged intact was something of a miracle.

Folklore has it that America’s armed forces ultimately fought the British to a standstill. True, David did hurl some stones at Goliath. The tiny U.S. Navy performed storied feats in several single-ship duels on the high seas, and scored heroic victories in engagements on Lake Erie and Lake Champlain. On land, the Americans successfully defended Baltimore and then New Orleans.

But more fundamental to the outcome was the fact that the British—though they had long deemed it necessary to commandeer numerous American ships and sailors to support what was in essence a titanic world-wide struggle against Napoleonic France—had not really wanted to pick a fight with America in the first place. By 1815, having finally defeated the French, Britain no longer felt a need to interfere with the maritime rights of neutral countries such as the United States. The cooler heads in London then prevailed on their government to settle the unwanted long-distance brawl in North America.

Close Call

In these fortunate circumstances, the Republicans lucked out. Quickly forgotten was the fact that six months before the war finally wound down, the republic had been on the ropes. Early in the war, the prediction of hawks such as John C. Calhoun of South Carolina that a conquest of Canada (then a British colony) would be accomplished in a mere “four weeks” had proved delusional. All attempted American incursions across the Canadian border were repulsed. Several defeats had been embarrassing, even scandalous. As the war progressed, Britain had tightened the noose. British troops occupied eastern Maine. Then, effectively blockading the main ports further south, the Royal Navy penned in America’s few sizeable warships, which in any case were never a match for the collective firepower of the multiple enemy squadrons that now were steadily patrolling inside territorial waters. By 1814 British ships and landing parties were mostly at liberty to raid towns up and down the Eastern seaboard, even torching the public buildings of Washington, D.C.

The U.S. economy was dealt a severe setback. Exports and imports plunged. The collapse of trade emptied what was left of the government’s meager coffers. As revenue from duties shrank and expenses mounted, the public debt soared and soon became unsustainable. Forced to suspend interest payments on its bonds, the United States Treasury technically defaulted on November 9, 1814.

So controversial became the war for a time that in some parts of the country local militias refused to cooperate and some states in the Northeast flirted with secession. In others, murderous mobs raged against suspected enemy sympathizers. The title of historian Alan Taylor’s magisterial book, The Civil War of 1812, captures the mayhem that had been unleashed. The union’s future hung in the balance.

By the autumn of 1814—with key New England states wanting out, the army gravely shorthanded, the navy’s largest ships disabled, Congress incapable of securing essential financial instruments and the government hence basically bankrupt, and, for good measure, the heart of the nation’s capital a smoldering wreck—the only rational course was to try to call a halt and to do so without great delay. Fortunately, our adversary was amenable. The peace treaty that was ultimately ratified did not prove “ruinous,” as the Federalist naysayers had predicted, but remarkably benign.

So it was that Madison and the Republican Party in general managed to land on their feet. They escaped lasting discredit for their mismanagement of the war effort, while the Federalists, whose skepticism had been eminently sound at the outset, wound up with the stigma of having behaved as unpatriotic prophets of doom. Not even a severe financial panic that burst in 1819 (resulting from rampant land speculation in new territories that the war had put in play, and that brought five years of deepening debt, deflation and hard times) reversed the Republican ascent.

Partisan Transformation

As if that script were not sufficiently improbable, to it would be added this: Almost overnight, the party jettisoned a good deal of its old dogma. For, while the conclusion of the War of 1812 had redounded to the benefit of the Republicans, it also exposed the inherent shortcomings of their ideology: specifically, its inordinate distaste for centralized power—in the form of permanent armed forces, an executive bureaucracy, a national bank, and federal taxes—and a bias for agriculture over manufacturing and commerce.
In his final message to Congress in December of 1815 Madison all but laid those traditional tenets of his party’s creed to rest; he startled the country by advocating a broad national program that now included adequate military strength, a national bank, a system of direct internal taxation, and a protective tariff. The Republican president seemed to take a page from an early Federalist playbook—Hamilton’s report on credit and manufactures—even calling for a “comprehensive system of roads and canals” and the establishment of a national university in Washington.

Republicanism, in sum, was morphing into Hamiltonian nationalism. The convergence promptly contributed to relieving the partisan disputes that had accompanied the altercation of 1812. In their place arrived what came to be known as an “era of good feelings,” and considerable consensus in the 1820s on an agenda that the Republican House speaker Henry Clay christened the “American system”—that is, policies of protection and internal improvements basically reminiscent of Hamilton’s. The rebranding of the Republicans beginning in 1815 helped keep them (or, more accurately, their up-dated heirs) in power for years.

How did the Republican Party, so partial to small government and minimal taxes until 1815, manage to reassess its long-standing credo and perform an about-face? A good deal of the answer has to do with a fundamental difference between political parties of the 19th century and those of the present day. Back then, party leaders exerted control. A party’s orientation could reflect, for the most part, the inclinations of its establishment—an acknowledged elite. The Republicans of 1815 were led by James Madison. A consummate pragmatist at most of the critical junctures in his career, Madison had been chastened by the 1812 experience. He pivoted accordingly—and most of his partisans followed.

Today’s parties, by contrast, are driven from the bottom up. Established leaders, to the extent they exist, have limited influence. Instead, through their grip on party primaries and caucuses, grass-roots activists dictate not only the choice of candidates for office but their agendas. Redirecting a party’s stance, therefore, requires altering its base, not merely counting on a different management style at the top. Overhauling the base is not impossible, but it takes much longer.

The meaning of all this for the present day is plain enough. You may wish that, like the Republicans after 1815, the GOP now would shed more of its ideological resistance to raising the requisite tax revenue for essential public priorities, deficit reduction being one. And you may wish that, also to reduce future deficits while continuing to serve other vital public purposes, the Democratic Party would give up its doctrinaire reluctance to rethink more of the welfare state’s unsustainable entitlement spending. In time, both will have little choice but to change their customary tune in these matters—but it may well take more than promising leadership, however enlightened and statesmanlike.