[Part 7 of 7]
James Madison and Alexander Hamilton believed that wisely crafted and self-limiting institutions indirectly achieve the common good, a goal that virtue could not do dependably. They come to the conclusion through certain assumptions about human nature and the human condition. They helped create a Constitution that structures such a system. The virtues and the faults of this system can be seen today in a significant part of the world – both in America and in other nations that have borrowed parts of the founding fathers inspiration for their own use in contexts of varying cultures, attitudes, customs and habits. Their changes to the system, with all its advantages can be seen as fundamentally changing the nature of democracy – and in some ways not necessarily for the better. Mob rule may have been avoided – but perhaps only at the cost of distancing government form the people. The danger of those in government making decisions that benefited themselves at the expense of the country may have been partially circumvented, but only at he expense of demanding less virtue and less civic spirit in the representatives. Though much instrumental good was added, it was at the expense of some intrinsic good in the system – to use Michael Sandel’s terminology. Thus Hamilton and Jefferson, who had their trepidation’s about even calling their system a democracy, profoundly changed how a “democracy” functioned, what was demanded of its citizens and representatives, and how successful and stable a nations it was able to forge. Though the path Hamilton and Madison conceived if to reach the common good is a crooked one, detouring through ambition, greed, lust for fame, etc., they worked to make government well conceived and self-limiting, and helped to achieve beneficial incentives for a stable, dependable and successful society.* Altruism and virtue, on the other hand, directly attempting to achieve the public good, they saw as unstable and untrustworthy. The twists and turns of human nature as regarded by Hamilton and Madison and as set in the context of their carefully conceived and self-limiting government, promotes, albeit inadvertently and indeterminately, a society that is stable and tends to promote the common good.
* The restructuring of incentives that lies at the heart of this principle can be seen especially clearly in stock options which literally link the companies financial success to your financial success.
About the Author
Phin Upham is a New York City and San Francisco based investor. While an undergraduate at Harvard University he was the editor of the Harvard Review of Philosophy. He graduated from the Wharton School of the University of Pennsylvania with a PhD in Applied Economics. Visit Phin’s website for more information.