The Right Coast

July 21, 2004
Postmark: Washington, D.C.
By Gail Heriot

Great Britain's political capital is also its financial, commercial and cultural capital. Ditto for Argentina, France, Egypt, Greece, Iran, Japan, Mexico and Sweden. Indeed, there are few countries in the world where the political capital is just a political capital and nothing else.

Washington is an exception (as are capital cities like Ottawa and Brasilia). Although Washington is a thriving city, its sole claim to preeminence is in the political realm. It is neither the country's financial, commercial, industrial, entertainment nor fashion capital. Prior to its selection as the political capital, it was a cow pasture. Indeed, photos that are only about a century old show happy farm animals grazing on the White House and Capitol lawns.

How did this happen? Thomas Jefferson wrote that it all started at a little dinner party at his home-away-from-home in New York attended by Alexander Hamilton and James Madison. At the time, New York was the country's temporary capital. Hamilton was eager to get Madison's (and the other Virginians') vote in Congress in favor of the federal assumption of Revolutionary War debt. Madison and his fellow Virginians were less than enthusiastic for a number of reasons, not least among them that Virginia had already paid off its own debt, so federal assumption was not in their interest. A deal had to be struck.

And it was. According to Jefferson, the debate over where to locate the nation's capital was going on during the same time period; cities like New York, Philadelphia, Trenton and Carlisle were vying for the honor. The Virginians as well as many Marylanders wanted it along the Potomac. Hamilton was happy to give them that little plum in return for a few votes for federal assumption. (Yes, there may have been a bit more to the deal than that, but it doesn't matter to my point now.) The rest is history.

Hamilton is usually portrayed as shrewd for making such a deal. The federal assumption of debt was a vital part of his financial plan for the United States. The location of the capital was just a little piece of patronage. Why not trade it?

But I wonder what the long-term consequences of that deal have been. Has the federal government been less sympathetic to commerce and industry that it would have been if the capital had been located in New York or Philadelphia? Do any such long-term effects remain? I have a hard time believing that there has been no effect, but then history does not disclose its alternatives, so it's hard to say for sure.

It is worth noting that Jefferson, Madison and their Virginia and Maryland allies didn't just want a capital that would be within their territory. (Recall that the District of Columbia originally included what is now Arlington County, Virginia.) They wanted a capital that would be away from the evil and corrupt cities. In effect, they wanted a cow pasture and they got it--far from the corrupting influence of financiers, merchants, and manufacturers. What would our antitrust law look like today if the capital had been New York? Or our industrial policy? Or our agricultural policy?

If our capital were New York, every mid-level civil servant would be married to a mid-level employee of a bank, an investment firm or a major corporation. Members of Congress would have bankers and businessmen as neighbors. It would be different. (No, having lobbyists as neighbors is not the same; lobbyists are part of the culture of government, not the culture of business and enterprise.) I don't know if this would have been bad or good, but it would be different. Did Hamilton give away more than he intended?

If you're wondering from this post whether I have finally finished reading Ron Cherow's biography of Hamilton, the answer is yes.