 The Jacksonians succeeded where the Jeffersonians failed because of greater tenacity, refusing to work with the opposition, the increased influence of free market thought, and tactic cooperation with free market British politicians. Critically, they triumphed with the executive branch, morphing the office from a corrupt shield into an anti-crony sword. That is the words of Dr. Patrick Newman joining me once again here on Liberty versus Power. Again, if you have not gotten your copy yet of cronyism, you can get a discount in the Mesa Store with the LVP as the code. Patrick, this is a fun episode today. We have made it to the Jacksonian era. And I guess starting off, you know, one of the things I think is interesting about Jackson is that he is a figure that, you know, while he has been, you know, he's seen as politically incorrect in today's world, once upon a time, you had various different political factions trying to present themselves as continuations of a Jacksonian democracy. So what do you think of that term Jacksonian democracy? What does it mean to you? It's a very interesting discourse out there within historical circles. Yeah. So first of all, thanks, thanks, though. Glad to be on again and talking on this podcast. Second, I'm glad you mentioned the book. And for those of you watching the video, you might have seen me searching around. I've always wanted to have a copy of the book to actually show on the screen like though. And of course I said I have it and I guess I left it on the other chair. And so now I don't. So again, for this episode, I still don't have the book. So but anyway, with that extraneous material aside, we know what's Jacksonian democracy. So as you mentioned, Andrew Jackson is an extremely controversial president, but he's also someone who's left a profound legacy in, you know, in terms of the presidency, in terms of democracy, in terms of the United States government, even regarding central banking, monetary laissez-faire and so on. When a lot of people think of Andrew Jackson, they think of at least initially the founding of the Democrat Party, which relates to the Jacksonian Democrat. Well, what exactly was a Jacksonian Democrat or Jacksonian democracy? Well, Jacksonian democracy was democracy by the average person. So in that time at the average, the white, white male, okay, they, there's the belief that they should have the ability to vote in that their voting is actually a way of enacting change. Okay, so that's in person, particularly what a Jacksonian Democrat refers to in, in particular refers to the idea that the people are going to choose the president. So the people will decide who the president will be, not necessarily the state legislatures or Congress, right, which is seen as very corrupt, you know, the electoral college was a shield blocking the will of the people, but it was the people who could actually change the system and in particular reform the system. Because even though most people, when they discuss Jacksonian democracy, they mainly focus on the actual suffrage in question of voting, they don't necessarily talk about how by and large, this suffrage in this voting was directed towards reducing cronyism, decreasing the government's involvement in the economy and trying to bring about laissez-faire. So Jacksonian democracy is really a different strategy for trying to achieve laissez-faire at the state and federal level. And one of the things I think is interesting against some of the different narratives out there about, you know, what are some of the forces that be stirring, you know, this, this political change is that, you know, for one, like they're really much, I think there was sort of a backlash, right, to, you know, we saw this play out with obviously the motivations of the old Republicans, the Martin Van Buren's out there that were trying to reclaim kind of those Jeffersonian ideals, but also you had a tremendous amount of change happening to the life of your average American. I know Harry Watson and his book Liberty and Power, he talks about, he calls it the market revolution and how some, there are some kind of materialistic changes going on in terms of commercial activity, but also the dynamic in which ideas were easier to circulate within smaller towns in particular. You had, you know, growing, strengthening of the post office system, you know, kind of during the early days of the government, things like that, so that some of these smaller towns had an opportunity to play a more active role in terms of political discourse. Is this a period with less gatekeepers? Is the concept of sort of the natural elites, is that changing and during this period and how much of that is perhaps a backlash to kind of this corruptive class that was able to take over the old Jeffersonian party? Yeah, so that's a great point you make. I would say that it is, you know, there are less gatekeepers, so to speak, in this era, okay, the people are voting more often. There's less policies or at least less, you know, on the terms of presidential elections. State legislatures are deciding. They electors less and less. Technology is very different. You've got newspapers. People are reading more. They're able to, you know, to learn about information and also articulate it in their own newspapers or little asides. I always, I mentioned this, I think, before that newspaper is back in the day. They would always have columns of just, you know, almost letters to the editor, but they were short, like one sentence, two sentence, little tweets, basically, that people would put in about various information. And so these newspapers, some of which would cycle, you know, maybe twice a day or something, you would get, it was the tweets of tweets of the era of ye old Jacksonian tweets. And it was seen, okay, the people have abilities that they didn't have before. They have more freedom at least to try to do what they want to exercise their ideas to learn about ideas. So yeah, the Jacksonian era, it was a reaction against the natural elites. I wouldn't say it was a reaction against elites per se, but it was a reaction against the the elites entrenched in the government. One of the things that Jacksonians were very big on was rotation in office. So they thought that, all right, you know, the office is not like a privilege that people have. So if you're serving in government as a politician or bureaucrat, doesn't mean that you're just allowed to keep serving in that position as long as you want, you know, on the taxpayer dime, they wanted to circulate elites. So they wanted natural elites. I guess you could say the natural elites are those created by the market, not those artificially created by government fiat. Yeah, that's one point that you highlight within the book. You've got a great quote here, you know, that you talked about how Washington had turned into a swamp. And many officials viewed, you know, their titles as property rights that they could bequeath to their sons. I mean, this is very much almost like a European aristocracy sort of dynamic that it would make sense that would have emerged during this uniparty system. You know, you don't have those those inner party dynamics at play. And of course, here you've brought conflict back to politics. And you highlight how between the Washington administration and the Quincy Adams administration, a total of 213 officials had been fired during that time within the Jacksonian administration. Over 250 were terminated. I think this goes into again, that dynamic where there is virtue within that sort of partisan process of, you know, creating itself a bit of a check on this entrenched bureaucracy involved here. Really, I mean, this was going after the deep state of that era. And then also as well, not only the changeover within these official titles, but can you talk a little bit about that dynamic of Jackson's having a kitchen cabinet different than the official cabinet administrators of the past. Some of these different dynamics again, like the way that Jackson was going about these things. In fact, to put on that still, and I know you mentioned in the past how one of the differences that Patrick Henry had with Thomas Jefferson was a belief in the power of the executive branch within this. I mean, all of this kind of goes to this much larger point, right, of, you know, the role of the executive branch, you know, Jackson himself seeing himself as the embodiment truly of American democracy, the true representative of the people. This is the very dynamic, even if the underlying ideology, you're perhaps very similar to the old Republicans, you know, the ideals of the Jeffersonian era. There really is a very different view structurally of how this government should operate and does operate during this period. Oh, yeah. So in terms of the removals, the Jacksonians were very big on removals, making sure, trying to institute some form of the old anti-Federalist rotation office. They did not want politicians and bureaucrats remaining comfortably positioned in their jobs. Okay. And this was to prevent an entrenched bureaucracy and entrenched sort of oligarchy from taking place. Jefferson had wanted to do that. Jefferson had failed. He only removed fraction of the people who some of his more radical supporters wanted him to remove. Jackson went much further. Okay. So Jackson was the idea of rotation office, which was deridingly referred to as the spoil system is actually a great reform, a great anti-Crony reform, precisely because it prevents a bureaucracy from being developed. Jackson also had sort of informal advisors, if you will, he rotated his cabinet, not just through frequent rotations of his actual cabinet, but actually by using a different cabinet, the so-called kitchen cabinet of his informal advisors who, you know, they would speak, you know, he let them into the back of the White House and they'd talk shop and all of that. And they would be the ones really kind of directing Jackson's program and they would sort of have less, there would be less oversight on them as opposed to the traditional cabinet, which Congress had a say in. Okay. Congress at least has to approve the people running the government cabinets, right. The president can nominate them, the Senate has to confirm them. And the Jacksonians big enemy at this point was Congress. It was always the legislature because unlike the Jeffersonian era of Thomas Jefferson and, you know, of the anti-Federalists beforehand, the Jacksonians realized that basically Congress is actually the enemy. You can't achieve reform through Congress because of the constant pressure for elections and really just the constant pressure for privileges. Okay. So without rotation in office and with all this unlimited government power, Congress is going to quickly become actually the proponent of cronyism. It's going to propel it rather than stop it. So the Jacksonians, many of them were strict constructionists. They were people who were previously very anti-executive power. They sort of turn to the executive now as their savior. And this is a brilliant strategy. This is why I kind of think Patrick Henry was sort of on the mark in some of his earlier kind of splits with Jefferson, whether or not Henry had really developed these ideas as far as some people later is probably unlikely. But he at least had an inkling of this is that, well, the executive, you know, it's this one guy who can, if you've got the right person, he can sort of get stuff done. Because the Jacksonians said, all right, particularly by using the veto, transforming the presidential veto into a tool that can actually strike down cronyism, the president has the ability to decide whether legislation is good. And if it's constitutional, the presidency can actually reform the government. Okay. And this is a very novel idea. It was very controversial. And this is really, I would say probably Jackson's most lasting impact, at least just you turning the presidential veto into something that people regularly use. It's no longer really the anti crony sword that the Jacksonians hoped for, but it still is reasonably the realistically the only way you could get something done. If ever a Ron Paul candidate were to become president, the only way you could actually achieve any reform is not through Congress, but just through the veto. So the Jacksonians were very, very smart in their analysis of the situation. And it's something that gets neglected, which is why I think it's all the more important that we're talking about it. Absolutely. And that's what I think is interesting. You're trying to pull it out to modern day sort of conversations, right? You have, for example, the interest within certain circles, that would argue that their structures within a monarchist sort of system that lends itself as a better defense of liberty than a democratic system or things like that. Within the American sense, Jackson is, he was kind of a king figure, right? The Whig party arise. They're directly adopting this sort of framework in there. And the reason why Jackson had this sort of power was because of his connection to your average American impacted by the political system and this willingness to assert executive authority. There's this constant kind of dynamic in conversations, not only within libertarian circles, but kind of the right more broadly. Back in the day, there was hope that someone like Ronald Reagan could come in and be sort of a unilateral executive sort of figure and impose onto the post great society style federal government that sprung up, try to restore it down to, I don't know, post FDR era sort of framing and things like that. It obviously didn't happen. Whereas some people would say, okay, well, it's more important to have a greater respect for Congress that the danger comes in putting too much power within the executive branch. I think historically, in comparison, contrasting, say that the Jeffersonian style of governing with the Jacksonian style, this is a period of history where you can really see, I think, the differences in these models. And again, part of that, one of the advantages that Jacksonians had is that only did you have the force of personality of Jackson, the figure, but you had all of these side individual leaders trying to influence policy. They didn't let him sort of rest on his laurels. These are individuals surrounding Jackson with an agenda to push. And so can you talk a little bit about the influence of that kitchen cabinet and contrasted to some of the views of the official cabinet? The official treasury secretary was Louis McLean. His views on this stuff differed significantly from what a William Gouge and some of the other ideological Jacksonians believed in how to go about dealing with the second bank of the United States or some of these other economic matters. Yeah. Jackson, I think I'm glad you referenced the Jeffersonians because I think the Jacksonians succeeded, as you mentioned in the quote at the beginning of the episode, the Jacksonians succeeded where the Jeffersonians failed partially because they used a different strategy. They decided to concentrate their efforts through the executive rather than through Congress per se, though Jackson did have many helpful people who were supporting him in Congress. But it was through the executive veto. It was through the rotation in office enforcing that, et cetera, that the Jacksonians were actually able to accomplish meaningful reform. Okay. Now this led to problems because increasing the power of the presidency increases the corruptibility of the presidency, which is something we'll probably, you know, we'll talk about later in this podcast series. But, you know, still the Jacksonians, you have to give them credit because this totally bushwhacked the opposition. The national Republicans did not see this coming. They thought it would be business as usual in Congress. They were very upset that Jackson was using the veto and the way he was using it. And that's why the Whig Party, right, which guys like Henry Clay, Daniel Webster, John Quincy Adams established, they had named it strategically in reference to the Whigs, the British Whigs who fought, you know, a tyranny in their government. And they're trying to say, well, we're standing up to, you know, an American monarch at certain points, the Whigs actually wanted to try to get rid of the presidential veto. This was not part of their strategy. They were not prepared for this. And this is why, partially why the Jacksonians succeeded. So Jackson, you know, succeeded because he had these, he had this veto and he was constantly able to sort of figure out strategy by talking to his kitchen cabinet. Okay. These are the guys that you mentioned, Martin Van Buren, Amos Kendall, Francis Preston Blair, Thomas Hart Benton of Missouri and so on. These are some of the people who were very supportive of Jackson. And they were always able to push him into the positions that he was naturally supportive of, which was crippling the American system. That was always the number one goal of the Jacksonians, right? So, you know, get rid of the central bank, right? Get rid of protective tariffs, pay off the debt and government federally supported internal improvements and so on, right? So, whereas Jackson's initial secretaries of the treasury were much more, you know, mild and moderate, like some of the people in Jefferson's cabinet, it wasn't as big of an issue because Jackson would fire them if they didn't listen to him. And he would also listen to his own cabinet. So, I'm imagining Jackson going like, you're fired, right? Something like that. But, you know, maybe, you know, we don't know. That's lost to history, I guess. But so, the central bank was very big on Jackson's agenda and on the kitchen cabinet agenda, because you got this central bank, right? It's the original impetus behind radicalizing the Jacksonians in the panic of 1819, turning many of them into supporters of hard money. So, they're against fractional reserve banking. They're against government support of the banking system. They're against the central bank. Are they perfectly laissez-faire? No. Do they have the perfect laissez-faire solutions? No, but no one's perfect, as I'll talk about in a second. So, they wanted to get rid of the central bank, right? So, this really the Jackson's first administration, I think the most important and long-lasting action that he did was the so-called bank war. It was this multi-year-long struggle against the Hydra of corruption, the Bank of the United States, right? Which various political cartoonists back in the day would literally portray as a Hydra with multiple heads and Jackson was fighting it. I'm like, oh, isn't this great? Can't we do this for the Federal Reserve or something like that? But a lot of people think that it was just based off of Jackson's personality issues with Nicholas Biddle or that Jackson just wanted to replace it with his own central bank. That's simply not true. Jackson would, another strategy of Jackson that I like, it's a little devious, but you always got to play hardball in politics, is Jackson did intentionally lie to people and he misled people. He misled his cabinet. He misled, reminds me of someone else. He misled his cabinet. He misled other government officials because he was experienced in war. He was a general and he knows, well, you have to, you want your opponents to fight in the fog of war and not really know what's going on. And for them to only belatedly figure out that, okay, Jackson's not actually listening to his cabinet. He's listening to these other guys, the kitchen cabinet. The other thing is what I mentioned earlier is that the Jacksonians didn't necessarily have a perfect route to go to complete monetary laissez-faire. Some of their initial solutions kind of verged on a central bank, but this was because no one did at the time. There really weren't that many pure monetary laissez-faire theories at the time. Even the British reformers, such as the currency school, had wanted to reform their system by using government intervention or centralizing the ability to issue notes in the bank of England, et cetera. Guys like David Ricardo, John Baptiste, and so on had sort of developed rudimentary ideas like this. But the central point remains uncontested. It's that Jackson wanted to bring the economy closer to laissez-faire. This includes money. And his major goal was getting rid or weakening the second bank of the United States. One of my favorite books out there that really goes to the heart of kind of the energizing spirit of the Jacksonians, the Jacksonian persuasion. And in the introduction, they highlight, again, just the degree to which bank issues really were kind of a key mobilizing factor here. Broadly speaking, the Jacksonians blamed the bank for transgressions committed by the people of their era against the political, social, and economic values of the Old Republic. The bank carried the bad seed of Hamilton's first monster, matured all the old evils, and created some new ones. To the bank's influence, Jacksonians traced constitutional impiety, consolidated national power, aristocratic privilege, and plutocratic corruption, social inequality, impersonal and intangible business relationships, economic instability, perpetual debt, and taxes all issued from the same source. I mean, again, they really touched right there on the—they had their finger in the pulse of just the incredibly corruptive influence of this central bank. And as we have seen throughout these—doing this poundcast time and time again, we saw the role that the central bank and the financiers around it were able to corrupt otherwise good Jeffersonians, otherwise strict constitutionalists utilizing the powers that they had from this institution. And the fact that you actually had someone elected to this position with the support of the people willing to then stand up and do something about it, that is something that is very rare throughout political history generally. And this is what, I think, gives Jackson that—this is why he lasts. It's because he was someone who was an imperfect individual in a variety of different ways, but he set up to accomplish one big thing. And though the execution may not be perfect, he accomplished that one big thing. You know, there's stuff to be learned from that. That aside, can he touch on just a little bit? A little bit. One of the things I think is interesting is he brought up this currency school and mentioned in the opening quote there about the role of British politicians. One of the other, I think, interesting aspects of this era is—we've talked in episodes past about the influence of Adam Smith. There really much was this larger, populist, free-market laissez-faire defense going on within the English sphere. There's a great book on this by Robert Kelly, The Trans-Atlantic Persuasion, that highlights the political cooperation of these sort of laissez-faire politicians within England, within Canada, within America, both pre- and post-Civil War. Can you talk just a little bit about the influence not only of the politicalization of that Adam Smith laissez-faire sort of agenda, but also can you touch on just a little bit what separated the currency school in contrasting to some other economic disciplines out there? Dr. Swarno has talked about how Mises was a currency school free banker. There's interest amongst the economists around Jackson, including Gouge and others, who are also sympathetic to this sort of free-baking tradition that we could also place Mises in. Can you just talk about these people as sort of proto-Austrians in a way, not only their understanding of how free markets work, but in particular this monetary focus? I'm glad you brought that up because one of the reasons why the Jacksonians were successful is because there was a simultaneous free-market movement going on in Great Britain. This includes the hard-money currency school. It includes Richard Cobden and John Bright fighting to lower tariffs. This was the Smithian movement. It really started to blossom this idea of laissez-faire based off the ideas of Adam Smith, then continued on through guys like David Ricardo, John Baptiste, et cetera, not necessarily talking about the theoretical differences between them. Rothbard has done a good job of doing that, but just the broader free-market thrust was really starting to develop in the United States and in Great Britain in the 1820s, 1830s, and 1840s. Great Britain, having printed a bunch of money in the War of 1812, or not the War of 1812, excuse me, the Napoleonic Wars, though they also participated in the War of 1812, had to deal with some sort of similar monetary questions that really started to invigorate some proponents of the gold standard and opponents of fractional reserve banking. Basically, why did prices rise so much during this war? Some people said it was the increase in the money supply. Other people said that it was transitory supply shocks. It wasn't necessarily the price of used cars, but it was agricultural reasons, war disruption, speculation on the foreign exchange markets, and so on. These debates continued in the 1820s, 1830s, 1840s when the new opposing camps were either the currency school or the banking school. The currency school argued that they basically argued what was known as the currency principle, which was that banks should adhere to a marginal 100% reserve requirement. For any additional issuance of bank notes and deposits, they needed to be backed by gold. Changes in the money supply should reflect changes in the supply of gold. That's what they argued. The banking school was much more that the banking system needed to respond to the so-called needs of trade that crises weren't necessarily due to monetary phenomenon. They could be due to things like over-speculation and changes in expectations and so on. Mises and Rothbard were always very pro-currency school. Mises had argued that he had developed many of his ideas regarding Austrian business cycle theory from the monetary theory of the currency school and so on. All of this is what we make for great discussion in an economic theory podcast. What matters for us is that, well, the Jacksonians also adhered to the currency school. Many of the Jacksonians were influenced by the currency school, and Jacksonians also influenced some members of the currency school. Jacksonian economists, in many ways, they went beyond the currency school. This is something Mises and Rothbard mentioned, particularly because really the major flaw of the currency school was that they did not recognize that bank deposits were also part of the money supply. They basically concentrated on bank notes. Many Jacksonian economists had recognized that bank deposits are very similar to bank notes, and they also should be included in the money supply. The currency school played an important role in really fostering and continuing this hard money sentiment in the United States. It's something that I think doesn't really get recognized as much, that sometimes people think that the Jacksonians were separate from the British or they were just doing their own things and that, well, it was really all just secretly about slavery or whatever. No, you can actually disprove this by looking at who their allies were. These were individuals in Great Britain who were really trying to bring about their own version of free market reform. The Jacksonian movement, in many ways, is a Smithian movement influenced by the ideas of Adam Smith. Robert Kelly in the Transatlantic Persuasion makes this case very convincingly, and I agree with him in my book, Chronism. That's one of the other slurs that gets thrown around. The Jacksonians were just putting in a whole bunch of country bumpkins that were unqualified for the position. Where it's like, no, there very much was a very nuanced and deep understanding here of what is going on, which I appreciate. We talked a little bit about they've got this critique, they're trying to figure out the solutions. Can you talk about the role of the independent treasury as what they see as a solution to the dangers of the Second Bank of the United States? What is their agenda here in trying to instill an independent treasury as an answer to reining back in this Hamiltonian monster? The independent treasury, it's an idea that actually goes, it's older than the Jacksonians. It really originated with Thomas Jefferson and even John Randolph and John Taylor. This is in the 1790s, early 1800s, Thomas Jefferson, and he had a famous, I think it was in 1792, a private memorandum, a note of agenda. One of the things he mentioned was he wanted to make the treasury deal only in specie. Okay, so to accept only specie as payments and it would also spend out only specie and as expenditures. The idea here was to make the treasury independent from the banking system because starting with the First Bank of the United States, the government stored most of its money at that institution. This was seen as an enormous subsidy because the bank now had a huge amount of reserves that it could use to make loans and do other sorts of business. It was a corrupting influence. Many state banks or some state banks initially, they wanted to kill that bank because they wanted that subsidy. This continued in the Second Bank of the United States where the government would also hold its money at that institution. If they didn't have the central bank, defenders of the central bank said, well, you're just going to keep money in state banks, which will sort of spread out the problem. This is something that Jacksonians initially did. They regretted it. They knew it was the second best solution, but they wanted to institute this old Jeffersonian Randolph proposal to separate the government from the banking system because it was thought that if the government is no longer accepting bank notes for payments, it's no longer subsidizing any institution. It's no longer giving any special privileges to any institution by accepting their notes or by storing money at a large bank. This was a huge cornerstone of the Jacksonian system. It was this independent treasury you use under the the Crony Government Bank Alliance. This was something William Gogh initially proposed in the Jacksonian administration. It took a little bit for it to gain traction. Eventually, Martin Van Buren did institute the independent treasury in 1840. Of course, he signed it on July 4th, which I think means something because that means, in my opinion, it's just as important as the Declaration of Independence. Before we had the success of Martin Van Buren and signing that off entirely, the fight back in this bank war I think is interesting, particularly for the topic of this podcast. You go into details about the tricks used by Nicholas Biddle to maintain his power. Surprise, surprise, a lot of it has to do with bribery, has to do with loans. You highlight various legislators that all of a sudden, James Webb gets a $15,000 loan, and surprise, surprise, they end up being critics of Jackson's handling here. You also point out how the American Quarterly Review, which is an academic journal whose owner was a benefactor of the bank, then became one of the chief propaganda outlets in defense of the bank, which again sounds exactly like academic journals in America today, where the majority of grants are backed by the Federal Reserve. Surprise, surprise, the bias of the academic literature towards digital banking ends up going quite nicely there. Talk a little bit more about the opposition here, that how does Biddle respond to, as soon as he realizes that Jackson is here playing for Keats, what is the pushback from Biddle and the rest of the cronies of the bank? Yeah, so Biddle's upset about this because Biddle thought that Jackson actually wouldn't attack the bank. Biddle had initially voted for Jackson. Biddle thought that, well, this would be, this is one way of appeasing him. We can just continue business as usual. He wasn't happy when Jackson had started to make comments in some of his presidential speeches, criticizing the bank, saying that much of the public didn't like the bank, sort of suggesting reforms along the line of the independent treasury, and so on. So Biddle was very much against this. And he started to, as you mentioned, he started to flex his muscles, use the corrupting tentacles of the Hydra. Okay, so he started to send pro-banking information to important politicians on the relevant committees. He enlisted the help of academic journals, which, as you mentioned, received loans from the bank to defend the bank. And he started lending money to politicians, as well as creating his own propaganda material. And this is the big issue a lot of people had with the bank. It's that, well, it could recruit newspapers. It could recruit politicians. It could recruit businesses by giving them money. It literally has the power to create money. So you're sort of creating this corrupt partnership, right? Because a newspaper might be very pro-bank, central banking, not because it's the best thing for the country, but simply because it's getting money from the bank. Okay, this is an obvious conflict of interest that really the Jacksonians were not okay with. So Biddle is busy doing all of this. He's trying to corrupt the relevant officials. Jackson is not bending. So what Biddle decides to do is using a little prodding from Henry Clay, he basically pushes for an early recharter at the end of 1831, early 1832. And Henry Clay's rationale was this, he said, look, Biddle, if you push for the recharter in Jackson's side, signs the recharter, he's going to look very weak. And because I'm going to be the nominee for the wigs in the 1832 presidential election, all look really good and then all win. His vice presidential candidate was someone who previously worked for the bank. So he's very pro-central banking, okay? And Clay says that, well, if Jackson actually is stupid enough to veto the bank, then I'll win the election anyway, because the people will be upset. So this is really when the bank war sort of kicked into its high gear, reached its climax when the wigs were pushing for Jackson to actually stand up for his principles. And he did this. He ended up vetoing the bank, and he wrote a fantastic bank veto, and he ended up winning the election. So he won out pretty well. He did pretty good for himself. Yeah. And he also recognized that even though the veto prevented the rechartering of the bank early, it did not stop the bank entirely. He's got this great quote, the Hydra is only scotched, not dead. And again, the way the bank is portrayed during this period as a Hydra, as a monster, all of the great political cartoons of this era, again, just the greed of which this money issue, this central banking issue, was so animated, energy and politics. And this is something that I think is so underappreciated. Today, if we're in a populist age, I mean, the Jacksonian show, this is something, because ultimately it goes directly to the corruption of civic virtue. And that's something that's timeless here. And it's just so much good stuff. Yeah, I love how you mentioned that quote, because one, I love that he wrote the congressman James K. Polk. So he's a little hickory, old hickory writing the little hickory. And it's like, the Hydra of corruption is only scotched, not dead. He also, Jackson had a great quote, he said to Van Buren, one time he was like sick. He was in the White House and he's like, the bank is trying to kill me, but I will kill it. And you're like, wow, this is awesome. Like, here he goes. He's taken off the gloves. The other thing I just wanted to mention very briefly is that Jackson's bank veto, the bank veto, you know, his message is probably the best presidential document fighting against cronyism. He really makes a lot of great arguments. It's not an attack on capitalism. It's an attack on special privileges. He says, you know, the government through the bank has been favoring the rich through all sorts of, you know, subsidies and restrictions. The poor, the middle class, they're upset about this. I need to veto this bank. It's a problem. You know, this is based on economic and strict constructionist grounds. It really was an admirable defense. And what's also important to note, this kind of ties into Jackson's use of an alternative cabinet, is a lot of people for a long time thought that his attorney general later briefly secretary of the treasury and then finally, or perhaps most infamously, Chief Justice of the Supreme Court, Roger Tawny wrote the bank veto. But in reality, it was Amos Kendall. Amos Kendall is an economist, an economist or an economist newspaper editor. He is mentioned in Rothbard's history of economic thought for developing important insights regarding utility as a source of value, which I just think is completely fascinating aside in itself that the same guy who's writing the bank veto is also doing like marginal utility analysis. I mean, that's, you can't get any better than that. I mean, what more do you want a guy? And he along with France and Preston Blair kind of managed the Washington Globe where he was really kind of a big theoretician, you know, pushing for Jacksonian policies, pushing Jackson to be anti bank and so on. So you have this kitchen cabinet official really writing like this major presidential document, okay? And that's something important that should be highlighted because it shows how the Jacksonians had such a deep lineup. And it was really through this ingenious strategy of having these frontmen and his cabinet do things. And then when reality or look like they're doing things in reality, you've got different people, the kitchen cabinet, executing orders, taking, you know, carrying out plans, et cetera. I mean, it's really, it's a great way at least to try to reform the system. The other thing I think is interesting is that you highlight all of, so after you have Jackson doing what he's doing vetoing, vetoing the recharging the bank, eventually getting, killing the bank entirely, that wasn't like a, okay, well, the federal Jacksonians are doing this and then, you know, the state level officials have nothing to do with the banking and money side of things. No, there were leaders at various, within the states and Jacksonian leaders working on banking policy, trying to bring, you know, a free banking style sort of structure to the state level. You mentioned, you know, up and coming New Yorker named Samuel Tilden gets involved in these areas. So there's, this is not something that's mobilizing within the White House and kind of a federal only issue. This is a mobilizing issue even at the states for the Democratic Party. And can you just mention, you know, maybe a little bit of some of the reforms that were attempted at that state level, even though you still had that issue with, you know, so much bribery, you know, so many loans on the books from like the Virginia State Legislature, I think you highlighted as being particularly in debt and things like that. You know, the same dynamic was playing out in state capitals, not only in D.C. Yeah. So on the state levels, the Jacksonians also tried to institute monetary reform. This is really, particularly the most successful in New York, right? So this is because you had guys such as William Leggett and William Cullen Bryant. They were editors of the New York Evening Post. So this was actually particularly laissez-faire and, you know, laissez-faire periodical. William Leggett was famous for being a loco-foco. We don't need to get into that, but it was just really a hardcore laissez-faire Jacksonian Democrat. I think a lot of people have done great work on the loco-focos. I think sometimes a tendency is to make it seem as the Jacksonians were not laissez-faire. I do think they're laissez-faire. I think, you know, the loco-focos are just even more laissez-faire than them. But there's been a lot of good work done on the loco-focos, Anthony Kamegna, Larry White, and some other people have done good research on them. But the loco-focos wanted to just totally get the banking system separated from the government. So they finally realized that the best way to attack charters on the bank level is not to reduce the supply of charters, but it's to basically issue as many of them as possible to make the charter license valueless, right? If everyone is getting a government license, then no one's getting a government license. It's basically the logic. It's an indirect form of deregulation. And they've hit upon this insight. Mises was very big, expounding, which is that when you have laissez-faire in the banking system, banks won't over-expand credit, because if they do, then they'll lose reserves through the adverse clearing mechanism. So Leggett and Bryant, they realize this, they're pushing for this to New York, or the Jacksonians are doing that, or they're just trying to get rid of chartered banks or make the chartered banks more responsible and take away their privileges, et cetera. In New York and in other states, you did have the Whigs who wanted to have a system of fractional reserve banking, maybe with some deregulation in the chartering system, but to really just add extra regulations by requiring banks to back their notes with government bonds, by allowing banks to suspend in specie payments, and so on, and that this is what the Whigs are pushing for. So in many ways, the 1838, I think, New York Free Banking Act was kind of like a Whig coup, because it had some of these government regulations. But this was kind of the battle being fought on the state level. The Jacksonians were trying to remove government privileges to fractional reserve banking. The Whigs were trying to add new privileges for fractional reserve banks. So the Jacksonians were not as successful on the state level, but they were still very successful because they had the leading spirit behind the anti-chartering movement, encouraging governments to get rid of the chartering system. They were very big also in the general incorporation movement, which was to remove the chartering process, not just for banks, but for infrastructure companies, manufacturing businesses, et cetera. These general incorporation laws, making it so if you want to start a corporation, you don't have to get a license from the government. These really do come from the Jacksonians, and that's something very important. That's something that's still with us. So that was kind of the Jacksonians on the state level. As a side point, interestingly enough, it's not really laissez-faire, but the Jacksonians did always fight to restrict banks' abilities to print small notes, so notes of a small denomination. They basically argue that these were the notes your average person would hold and win bank suspended species payments, which was against the law in many states, but the states always sort of conveniently refused to enforce that law, requiring banks to honor their redemptions. The Jacksonians felt that the poor would be the most swindled by this. So they were always pushing for this, and it deserves some mention that this was an Adam Smith proposal. This is something Adam Smith had argued for. Adam Smith was not really perfect on laissez-faire, and banking was a particularly notorious example of this, but he did have this policy that the Jacksonians also tried to enforce on the state level. So the Jacksonians were really devoted to trying to remove government privileges to fraction reserve banks on the federal and state level. And so we've talked a lot about the theory and a lot of the politics behind it. Can you just talk a little bit about what was the real-life economic environment going on during this time? Because you mentioned how inflation did go up. There were aspects to this, while they're navigating these sort of waters, there was an increase in bank notes, things like that. Can you just talk a little bit about the real-life impact of this on the ground that might have been flowing some politics down the road? Yeah. So sometimes people argue that, okay, Jackson more or less got rid of the second bank of the United States in 1833, when he removed the government's deposits from the bank. So the bank still had, it sort of lived its existence. It was still a private bank chartered by Pennsylvania, et cetera, at least after it lost its federal charter. And they say, well, you saw a tremendous increase in the money supply and in prices after this. So this is very clearly, well, the wildcat banking gone wrong. This is why you need a central bank to provide the wise stewardship over the economy and to regulate the issuance of fractures or banks. In reality, as economic historians such as Peter Temen many decades ago pointed out, this increase in the money supply was due to an increase, a tremendous increase in a species in the country. I always think it's ironic. I think it's very ironic because I've always mentioned parallels with Andrew Jackson and Donald Trump. And in this case, the increase in species reserves was related to politics and financial relations with China and Mexico. So it's just kind of like this weird, all of the stars are sort of quasi aligning here. It's quite remarkable. But anyway, so those reserves went into the banking system so banks could use them to increase their credit. Now, the Jacksonians were pushing for higher reserve requirements. They weren't able to get that done to try, you know, which would have sterilized some of the increase in the money coming in into the country. But the increase in the money supply would have occurred without the second, with or without the second Bank of the United States, much like inflation would have occurred. The increase in the money supply would have occurred during the War of 1812 because the government was going to print money using a central bank or not using a central bank. So this increase in the money supply did fuel a business cycle. And it led to the Panic of 1837, which, similar to the Panic of 1819, kind of radicalized the Jacksonians even further. And they were able to push forward their monetary reform, particularly the independent treasury. By this time, Van Buren is president. He's probably one of my favorite presidents, if not my most favorite president, because he practiced laissez-faire during the Panic of 1837, which is why the downturn was very mild. And he also pushed for this final part of the Jacksonian monetary program, all right, which was to separate the government from the banking system. And this was his great accomplishment. Though the Whigs repealed it a year later, James K. Bulk, he instituted again the Constitutional Treasury in 1846. So at long last, the Jacksonians had accomplished what they were looking for, which was a separation of the government from the banking system and a reduction in monetary cronyism. Well, there you go. So here we have a victory on the side of liberty versus power, thanks to the Jacksonians. Next week's showroom, going to some of the other battles going on during this time within the Jacksonian administration. But this is definitely, again, I think there's so much interesting stuff within this period of just understanding political strategy, what does a functioning republic really look like in practice. Again, that intersection of strong sound economic analysis combined with political power. Again, it's such a fascinating stuff. And again, I think that's one of my favorite parts of cronyism, which again, if you do not have a copy of the book, LVP at the Mises Store gets you a little bit of a discount. Any last words here, Patrick? I would just say that if you're interested in one section of the book to read, I would say this section on the bank war, that's really one of my favorite sections. I think it's a great illustration of the Rothbard's liberty versus power framework. It's a great illustration of how reform can actually be accomplished and how you can actually reduce cronyism and special privileges, and that the Jacksonians are gravely misunderstood, and that we need more people talking about them and promoting their laissez-faire accomplishments, because they really were the most successful promoters of laissez-faire and the free market in American history, and I would say by far. Well, I think that's a great place to leave it here on the Liberty versus Power podcast. Until next time, this has been so official. Patrick Newman, we'll see you next episode.