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The latest episode of GoodFellows is a special one, as it was recorded in front of a live public audience for the first time in the show’s six-year run! Senior Fellows John Cochrane, H.R. McMaster, and Niall Ferguson, as well as moderator and Distinguished Policy Fellow Bill Whalen, convened on the stage of Hoover’s Hauck Auditorium before a full house of GoodFellows fans. It was wonderful to see the community around the show turn up in person and take home loads of GoodFellows merch!
This special event was part of Hoover’s ongoing The Ideas that Made US: Dialogues on Freedom series, celebrating 250 years of American independence. Fittingly, the GoodFellows’ conversation focused on the Constitution and the ingenious institutional designs that have allowed the United States to endure as a republic over the centuries.
Quote of the Day
Niall Ferguson describes what’s distinctive about the US system of government:
It was not a novel idea to found a republic. . . What was new was that it survived, because most republics in the ancient, medieval, and early modern world had failed. The one in England turned into a dictatorship extraordinarily quickly. And the Founders were remarkable because they really tried to learn from history. The project was a republic, if we can keep it, that would last 250 years, not 25 years, or 2.5 years.
Why is this Republic so durable? The answer is that they had a brilliant scheme called the separation of powers. And this was very much a product of Enlightenment thinking. It owed to Montesquieu, owed debt to the great thinkers of the Scottish enlightenment. The project was to make sure that the Republic didn’t do what Republics nearly always did, either tip over into anarchy because it’s too democratic or tip over into tyranny because you gave too much power to the executive. So, the genius of this thing, this extraordinary Constitution, is the application of the principle of the separation of powers to make sure that there is a bit of democracy that’s there in the House of Representatives, but there’s [also] a bit of monarchy. The president has some of the powers, some of the attributes of a monarch. There’s a bit of aristocracy, that’s the Senate. But the idea is that these things will balance each other out so that it can’t tip over into a tyranny or into an altogether majoritarian democracy. That’s the novel thing.
The Core Conversation: America’s Ideals and Institutions
H.R. McMaster explains the intellectual underpinnings of the American Founding:
One of the great gifts that we had was who the Founders were and what they had read and what they had used as the basis for their education. It goes back to the liberal ideals and the Enlightenment, Locke, [and] Hume; but it goes even further back to the classical period and the influence of Cicero and Cincinnatus and the Roman and Greek ideals of democracy. And they fused together this combination of Republicanism, which is really checks on power [and] divided government, divided even further, which is to our advantage. I think between the federal authorities and the federal system, federal authorities and state and [local] authorities, that was a further division. . . even into bicameral legislatures, other checks on power. But [the Founders] also balanced [divided powers] with the liberal ideals, the Lockean ideals of individual rights.
John Cochrane on the political foundations established by the Founding generation and their surprising long-term economic effects:
[We’ve] got to remember how poor America was compared to now. [The Framers] set out a Constitution to defend their political liberty and to stop tyranny from happening. And some general welfare would be nice. They had no idea that we would grow as we have to such unbelievable prosperity. Now, some of that [growth in prosperity], the Industrial Revolution did happen over that rainy island over there because [Great Britain] had many of the ingredients, property rights, rule of law, the things that made for prosperity. But that this arrangement of political freedom would lead to such enormous economic prosperity; it’s not something that really it was designed to do. It was a happy circumstance that political freedom also gives you economic freedom, gives you great prosperity.
Niall Ferguson builds on Cochrane’s analysis of the political foundations of economic prosperity:
[The United States comes] out of this [Revolutionary] war and it is a hot mess of monetary and fiscal confusion. And fixing that was crucial to the takeoff. The US economy does not immediately take off. It’s actually a really lean time when the war is over. But then you get these foundations that Hamilton saw so clearly. If you could create an integrated market, if you could have a federal system of debt, he also wanted a federal bank that came much later in the end, but that’s important stuff. And it’s not as glamorous as the pursuit of happiness, but it does help the economy grow.
Key Takeaways
Was the Decision to Launch A War Against Iran Constitutional?
Former National Security Advisor McMaster: “So we do tend toward this kind of strategic narcissism to define the world only in relation to us and to think that the outcome depends on what we do or choose not to do. Hey, others have agency in this case. And I would say in this case, the Iranian regime, the theocratic dictatorship there has been waging a 47 year long war against us. So the President didn’t decide to go to war. We were already at war for 47 years with the Islamic Republic of Iran. And what precipitated this decision by Israel and the US to go after Iran were a number of recent, relatively recent developments, the lighting of the “ring of fire” around Israel with the objective, in my view, to destroy Israel and kill all the Jews, which has been the objective of the Islamic Republic since its founding. They set that ring of fire around Israel and they lit it on October 7th.
[The Iranians] were increasing their missile depth by orders of magnitude, building more and more Shahed drones, and essentially creating a conventional curtain behind which they could rekindle their nuclear program [and] develop an intercontinental ballistic missile. And so where you have this argument, “Hey, was it imminent and is this justified under Article II?”. . . [To that] I would say: What is imminent to you?
I mean, would you rather wait for the Islamic Republic, who calls us the Great Satan and chants death to America? . . . Do you want to wait for them to have the capabilities that could threaten the United States directly? I don’t think so.”
Why Don’t We Have More Constitutional Amendments?
Donning his political historian hat, Niall Ferguson explains: “It’s unamendable. It’s impossible to amend. It’s perfectly amended. Politically impossible. No, it’s not politically impossible. You can’t do it because we have a fifty-fifty political system where you simply aren’t going to be able to amend the Constitution. That’s the reality. We’ve lost that part. . . We can’t do it anymore.”
What is the Significance of the Second Amendment to the US Constitution?
John Cochrane says: “It was very important that our English and Scottish forbearers did not have the right to bear arms. And that was a lot of why they were subjugated to various lordships for thousands of years. And that’s a reason why [the Second Amendment] was put in the Constitution. And if we don’t like it, we can amend that. And why that is not going to change is because most Americans say, ‘Yeah, I want the right to bear arms and I’m going to keep it.‘”
What Can We Learn from the Example of the Founders?
H.R. McMaster: “When Benjamin Franklin saw an issue at the local level, he’s like, ‘Oh, let’s found a fire department. Let’s found a library.’ And so, I think that’s what’s great about America, that sense of civic duty and because of the liberty that we enjoy that we can make a difference in our communities. And this is why I’m optimistic and remain optimistic about our country.“
John Cochrane expresses his hope that our financial leaders today will remember Alexander Hamilton: “I doubt myself to have had the wisdom of Alexander Hamilton, who got the federal government to assume the state debts, even though some had paid and some hadn’t paid, to assume them at face value, even though some had been bought by speculators; and to pay them off there and to understand that government debt properly managed could be a good and great thing for the country, to borrow in bad times and that our reputation for paying off that debt was worth a tremendous amount. And the fact that we paid off so much of that Revolutionary War debt is what allowed America to borrow from English capital markets and develop so quickly later. Let us hope that the spirit of Alexander Hamilton and the sanctity of repaying your debts remains in today’s Treasury Department, Federal Reserve, and Congress.“
Recommended Reading
H.R. McMaster recommended Albion’s Seed: Four British Folkways in America by David Hackett Fischer and Unstable Majorities Continue by Senior Fellow Morris Fiorina
Niall Ferguson recommended The Language of Liberty 1660-1832 by J.C.D. Clark and National Treasure: How the Declaration of Independence Made America by Research Fellow Michael Auslin
John Cochrane recommended the landmark 1942 Supreme Court case Wickard v. Filburn and Alexander Hamilton’s writings on the American financial system
Looking Ahead
The GoodFellows have some exciting guests coming up! Keep an eye on the GoodFellows podcast feed and the Hoover YouTube channel, as we have several thought-provoking episodes coming out soon:
On May 12, legal analyst Sarah Isgur will help the GoodFellows unpack this year’s major Supreme Court cases
The GoodFellows will respond to more of your viewer mail, so submit a question here!
This fall, investor and co-host of the All In podcast Chamath Palihapitiya will join the GoodFellows for a lively discussion of current events and Silicon Valley
That wraps up this GoodFellows conversation guide. If you like this companion to the show, or have any recommendations for future conversation guides, please let us know in the comments below.
John H. Cochrane is the Rose-Marie and Jack Anderson Senior Fellow at the Hoover Institution, Stanford University. An economist specializing in financial economics and macroeconomics, he is the author of The Fiscal Theory of the Price Level. He also authors a popular Substack called The Grumpy Economist.
Niall Ferguson is the Milbank Family Senior Fellow at the Hoover Institution, Stanford University. He is the author of sixteen books, including The Ascent of Money, Civilization, and Doom; columnist with the Free Press; founder of Greenmantle; and co-founder of the University of Austin.
H. R. McMaster is the Fouad and Michelle Ajami Senior Fellow at the Hoover Institution, Stanford University and distinguished visiting fellow at Arizona State University. He is author of the bestselling books Dereliction of Duty, Battlegrounds, and At War With Ourselves.