Neoliberalism suffers a congenital problem. Its opposition to the welfare state depends ultimately on a welfarist claim, namely, that a free market yields more opportunities and a higher standard of living for all responsible persons than the regulatory and redistributive state. As the experience of a century and a half in the United States has steadily undermined this claim, American neoliberals have resorted to what is essentially an identity claim: social democracy is European, not American; our founding fathers were concerned more with liberty than equality. Intellectually responsible neoliberals will not welcome Clement Fatovic's new book, for it closes down their identity argument and throws them back on their increasingly unpersuasive welfarist argument.

In this well-researched and admirably written work, Fatovic shows how leading lights of the American founding treated equality and liberty as complementary ideas and saw “a rough degree of economic equality” as a condition of political freedom and effective citizenship (2). Relying on Gordon Wood and other historians, Fatovic describes the manner in which revolutionary ideals of the early 1780s began to erode Northern support for hierarchies like slavery, class deference, and social and economic inequality (5). In extended discussions of Thomas Jefferson (chap. 6), James Madison (128, 136–37, 146), Noah Webster (7–10, 31–32), Thomas Paine (chap. 7), and Alexander Hamilton (chap. 4), Fatovic shows that the framers drew from a variety of secular and religious sources to conceive great disparities of wealth as a political problem that public action of one form or another could legitimately mitigate and should mitigate for the sake of both justice and liberal democracy.

This general outlook was held even by prominent Federalists like Hamilton. Though they feared the redistributive “excesses of democracy” (paper money, debtor relief laws) displayed by the state governments during the Confederation period, though they felt that there was no legitimate way for an advanced economy to avoid disparities of wealth, and though they argued for a system of representation at the national level that would insulate public policy from populist pressure, they also argued that the new government would raise the fortunes of all classes, and they favored policies that, where consistent with public purposes, would mitigate the gap between rich and poor (56–70).

Fatovic describes Hamilton's career as emblematic of this “decidedly mixed” legacy. No egalitarian, Treasury Secretary Hamilton's major policy proposals (federal funding of the states’ war debts, a national bank, and federal promotion of a manufacturing sector) returned immediate dividends to economic elites at the immediate expense of the poor and middling classes (88–111). Yet Hamilton made special efforts to increase the pay of military personnel and the lower ranks of the federal service. He sought to allow blacks in the military with promises of manumission. He sought disability pay for injured service men and successfully proposed a system of hospitals for seamen and their widows and orphans—funded through payroll deduction, a century and a half before the Social Security Act (116–17, 183–85). Previously, as a committee chairman of the Confederation congress, Hamilton called for programs of light duty for disabled soldiers and the education of the children of military personnel (117–18). Throughout his career, to the extent feasible with substantive public ends in which all classes could share, like the nation's security and credit, Hamilton supported tax policies that shifted the burden from the lower to the higher economic orders (119–24).

Above all, Hamilton held a general ends-oriented conception of constitutional powers in which “government is defined by its purposes rather than its constraints” and empowered “to play a positive and even leading role in society and the economy.” Fatovic submits ample evidence to conclude that “Hamilton was willing to use the powers of the federal government to develop the kinds of policies now associated with a modern, activist welfare state” (87–89).

Jefferson's opposition to Hamilton's liberal construction of national power has made him a favorite authority of the cultural and economic forces that have reacted against the New Deal and its successors. Yet, as Fatovic observes, Jefferson opposed Hamiltonian construction of national power largely because he saw it as an instrument of urban-industrialization and its eventual consequences, including economic stratification, impoverished workers, and the fall of middle-class democracy (196–98, 203–5). A survey (in chap. 6) of Jefferson's thought throughout his career amply justifies Fatovic's conclusion that, Jefferson's hypocrisy regarding blacks and women aside (194), “minimizing economic inequality was always an important political objective of this founder” (192). Though Jefferson opposed an equal division of property as impractical and unjust, at different points in his career he espoused progressive taxation, guaranteed employment for the poor, tax-supported public education, land grants to the poor, and other redistributive programs (198–99, 200). And, says Fatovic, joining many students of Jefferson over the years, when Jefferson's small government and strict constructionist ideology clashed with his abhorrence of extreme economic inequalities and his devotion to popular government, Jefferson would shelve the former (205). Jefferson's purchase of Louisiana is the familiar example of this fact (204, 212). Thus, pace writers like Jean Yarbrough and Michael Zuckert, Fatovic can easily doubt that Jefferson would have opposed the redistributive policies “that generate the most vehement opposition in US policy today” (192).

Though Paine was more a figure of the Revolution than the Ratification, Fatovic joins recent writers (Eric Foner, Robin West, Michael Zuckert, Harvey Kaye, Robert Lamb) who treat Paine as a respectable source of early American thought on the general responsibilities of government. Paine's thinking shifted from the mid-70s to the mid-90s from a libertarian view of rights as negative and government as a necessary evil to a welfarist view that embraced positive rights and government's responsibility to ensure economic justice. This shift allows both progressives and neoliberals to claim Paine as their own. Fatovic argues for the progressive view of Paine on the strength of that part of Paine's attitude that remained consistent throughout his changing opinions on the role of government, namely, his deep-seated hatred of poverty and extreme economic inequality (222–23).

Fatovic emphasizes that Paine accepted the inevitability of economic inequality in market societies (227) while opposing levels of inequality that yielded wrongs like slavery and undeserved poverty (230–31). Paine saw extreme wealth and poverty as presumptive evidence, respectively, of dishonesty and innocence (231). Paine argued that extreme wealth and poverty invite despotism by eroding social solidarity and fostering the poor's dependence on the rich (234). To combat these evils, Paine proposed progressive taxation, old-age benefits, public education, stiff inheritance taxes, various forms of poor support and workfare, guaranteed employment—all topped off with a cash grant at birth to compensate late-comers for their loss to first-possessors of the natural right to common ownership of the earth (243–48).

In sum, Fatovic writes to deny that the American framers would have put growing income inequality, chronic wage stagnation, and declining upward mobility beyond the active concern of constitutional government. Measured by this aim, Fatovic's book is a slam dunk. The least that Fatovic demonstrates is that many influential framers did regard extreme income inequality as a matter that constitutional government could address. The most one could say on the other side is that some framers conceived redistribution as theft and, therefore, that the framers’ intent on the subject of economic inequality is mixed. But where the framers’ intent is mixed, the question becomes how we ought to read that intent—better, how we ought to read and respond to the nation's current political situation. This is a policy question; it cannot be answered by deference to an alleged framers’ intent.