Editor’s Note: Robert Merry will be speaking at our crony capitalism conference this Thursday in Washington, DC!

Andrew Jackson, the seventh president, doesn’t get much respect these days. The Obama administration last year announced unceremoniously that the Treasury Department would rip his visage from the face of the $20 bill, where it has resided since 1928. A New York Times writer, in reporting that action, referred to him as “a white man known as much for his persecution of Native Americans as for his war heroics and his advocacy for the common man.” A recent C-SPAN poll of historians on presidential performance had Jackson ranked at No. 18, a five-notch drop since a previous C-SPAN poll just a few years ago. Indeed, when the first such poll of academics was published in Life magazine in 1948, Old Hickory ranked up there at No. 6, and a 1996 poll had him at No. 5. He was considered one of the greats or at least near-greats. But no more. Such are the vagaries of presidential reputation in an era of political correctness.

Yes, Jackson owned slaves, but of course so did George Washington and Thomas Jefferson, whose standing in the presidential pantheon hasn’t dropped as a result. And, yes, he signed Indian-removal legislation and later initiated the forcible removal of Southeastern Indian tribes to territory west of the Mississippi River, leading to the tragic “Trail of Tears.” But the country at that time harbored overwhelming political support for Indian removal. Thus, while this certainly can be characterized as a particularly sad chapter in the American story, it’s pointless to single out one man as personification of those brutal policies when the country as a whole clamored for them. Besides, there undoubtedly is some truth in Jackson’s claim to be motivated by a protective regard for the Indians, who, in his view, couldn’t coexist peaceably with the country’s burgeoning and overpowering white population.

Still, by succumbing politically to the voracious land appetites of the country’s whites, Jackson contributed to the deaths of thousands of Indians, and that should be considered in any assessment of his two-term presidency. The bigger question is whether it should overwhelm his overall contribution to the country in its second-generation era of development.

Andrew Jackson helped shape a political philosophy that has rippled through the American political firmament for nearly 200 years. Call it conservative populism—an aversion to bigness in all of its forms, including big government, and a faith in the capacity of ordinary folks to understand and to act upon their own interests. Conservative populism includes a natural aversion to entrenched elites, who always fight back against conservative populists whenever they challenge elite power. Republicans of today who tout the leadership of the last great GOP president, Ronald Reagan, should know they are touting the 20th century’s greatest exponent of Jackson-style populist politics.

And when today’s Americans lament the rise of “crony capitalism,” it’s worth noting that their complaint has a political lineage that goes back directly to Jackson, the country’s first great warrior against public policy allowing a favored few to cadge special emoluments from government. He despised any kind of cozy symbiosis between government and private enterprise, and if he could be pulled back into our own time he would look around with the famous scowl that always attended his displeasure and declare, “I told you so.”

A look at Jackson’s war against the crony capitalism of his day can shed light on the ongoing struggle against our own far more extensive and entrenched forms of this particular distortion of free enterprise. Jackson was the forerunner, and as such he presents a distilled and illuminating version of what it is all about.

The story begins at the turn of the 19th century with the emergence of Thomas Jefferson, who despised the governing Federalists of the early Republic—most notably Alexander Hamilton—for their elitist tendencies and push for concentrated federal power. Jefferson’s political watch words were small government, strict construction of the Constitution, states’ rights, reduced taxes, and less intrusion into the lives of citizens. As historian Joyce Appleby tells us, he represented “the rational, self-improving, independent man who could be counted on to take care of himself and his family if only intrusive institutions were removed.”

Upon becoming president in 1801, Jefferson vowed to do away with internal federal taxes, reduce federal expenditures and personnel, and attack a system in which, “after leaving to labor the smallest portion of its earnings on which it can subsist, government … consume[s] the residue of what it was instituted to guard.” All this set off sirens in the consciousness of Hamilton, who warned that Jefferson’s attack on the Federalist ethos should “alarm all who are anxious for the safety of our government.” But John Quincy Adams, whose father had just lost the presidency, understood the power of the new president’s agenda. They are, he lamented, “all popular in all parts of the nation.”

True to his word, Jefferson eliminated internal taxes while reducing the national debt and the size of government. Rejecting Hamilton’s notion of selling federal lands at robust prices in order to fill government coffers for federal infrastructure projects, Jefferson sold the lands at rock-bottom prices so the West would fill up with independent-minded farmers reveling in their new opportunity for self-betterment. The idea was that ordinary citizens would build up the nation from below; there was no need for elites to build it up from above.

Though Jeffersonian politics dominated the nation for the next 24 years, his party eventually split into two factions: Jackson’s Democratic Party, heir of the Jeffersonians, and the Whig Party of Kentucky’s Henry Clay, who wanted the power of Washington brought to bear boldly on behalf of domestic prosperity. Clay crafted a philosophy of governmental activism based upon federal programs he considered essential to American greatness—construction of roads, canals, and bridges; a national university; high protective tariffs; sale of federal lands at high prices to plenish government coffers and fund federal programs. This “American System” became the bedrock of Clay’s Whig Party, which played a major role in American politics for more than two decades and galvanized the political sentiment of many leading politicians, including the young Abraham Lincoln.

Jackson abhorred all this because he believed it would lead inevitably to corruption and invidious governmental actions favoring the connected and powerful at the expense of ordinary citizens. Channeling Jefferson, he pursued policies of limited government, strict construction of the Constitution, low tariffs, fiscal discipline, hard money, and westward expansion. While Clay’s system implied a certain amount of power flowing to elites, Jackson wanted political power to remain diffuse and as close to the people as possible.

Like Jefferson, Jackson found that his anti-elitist sentiments and little-guy advocacy were “all popular in all parts of the country.” They became even more popular when Clay made a horrendous political mistake in 1824–25 by allowing President John Quincy Adams to make him secretary of state after he had fostered Adams’s presidential victory in the House of Representatives, where Clay held sway as speaker. (Because no candidate received a majority of Electoral College votes, the election was thrown into the House.) Since the State portfolio was a leading stepping stone to the White House, Clay opened himself up to the allegation—cast about by Jackson with fiery outrage for four years—that the two ambitious politicians had engaged in a “corrupt bargain” involving the bartering of the presidency itself. At the next election, in 1828, Jackson expelled Adams from the White House and Clay from his sinecure at State. Jackson now was president.

He wasted no time in demonstrating that he intended to govern as he had campaigned. In May 1830 he vetoed legislation to extend the so-called National Road from Maysville to Lexington, Ky.—just the kind of public works project favored by Clay under his American System. In issuing his veto Jackson demonstrated his aversion to federal power and his suspicion that it leads inevitably to corruption. But he also put forth what may be the country’s first distilled critique of crony capitalism as a threat to fair and equal economic competition.

In opposing the idea of Congress appropriating federal money for local projects, he argued that the people had a right to expect a “prudent system of expenditure” that would allow the government to “pay the debts of the union and authorize the reduction of every tax to as low a point as … our national safety and independence will allow.” But if the government amassed the kind of power implied by the road project, he contended, it would lead inevitably to “a corrupting influence upon the elections” by giving people a sense that their votes could purchase beneficial governmental actions to “make navigable their neighboring creek or river, bring commerce to their doors, and increase the value of their property.” This, he said, would be “fatal to just legislation” and the “purity of public men.”

We must pause here over these words, for they convey the essence of crony capitalism, which Jackson believed was an inevitable outgrowth of concentrated power. He identified the kinds of special favors that likely would go back and forth between government officials hungering for political entrenchment and private interests with special access to those officials. And note that Jackson was talking merely about government officials buying votes. Imagine the added power of these cozy little arrangements when campaign financing is thrown into the mix. 

In considering the significance of Jackson’s words as they may have relevance for today, it is worth noting that he favored a “prudent system of expenditure”—government operating within its means. He wanted to “pay the debts of the union”—extricating the country from the dangers of ongoing deficit finance (Jackson was the first and only president ever to pay off the national debt). He advocated “the reduction of every tax to as low a point as … our national safety and independence will allow”—sentiments that sound like modern supply-side thinking. He opposed a system that channels special beneficence to a chosen few, for example, to “make navigable their neighboring creek or river,” etc.—a strong rebuke to the political logrolling of today. All this represents the essence of conservative populism.

Jackson was talking here about human nature, which he believed was such that the temptation of corruption inevitably would generate actual corruption, at least on the part of some. Better to keep governmental power diffuse, spread out among the people, so that those temptations couldn’t emerge.

The National Road veto turned out to be a forerunner to Jackson’s even more famous veto of legislation extending the charter of the Second Bank of the United States, the controversial public-private institution fostered by the federal government to serve as repository of federal monies and to maintain currency stability. Jackson viewed the bank as a “hydra headed monster” of federal power in league with elitist financial interests.

An understanding of this famous veto message requires a bit of background. The First Bank of the United States, chartered during the country’s early Federalist period, was the brainchild of Hamilton, who saw the bank as a bulwark of financial stability. Jefferson and his allies attacked it as a dangerous concentration of financial power, and in 1811 the bank’s charter was allowed to expire. However, with the outbreak of the War of 1812 it became clear that the country needed a central banking authority. Some banks in the Northeast, where the war was unpopular, hoarded the country’s meager reserves of gold and silver, and banks in other regions were forced to rely solely on printed money. The result was a menacing wave of inflation and considerable economic dislocation. Thus, the Second Bank of the United States, patterned on the first, was established in 1816 and set up shop in the nation’s financial center of Philadelphia. Immediately it slipped into corruption as its first president, William Jones, promiscuously violated terms of the charter, speculated in the bank’s stock, and exploited the venal practices of the bank’s branch members. Jones was forced out, and his successor sought to clean up the mess by calling in unsound loans, foreclosing on overdue mortgages, and redeeming overextended notes from state banks. The result was the Panic of 1819 as local banks slipped into bankruptcy, prices collapsed, unemployment soared, and a general economic malaise gripped the country.

Inevitably the bank became the focus of intense political passions, none more intense than those of Jackson. When Clay, seeking to set up a major issue on which to run against Jackson’s reelection bid in 1832, fostered legislation to renew the bank’s charter, Jackson vowed to veto it. That was just what Clay wanted. He figured that if Jackson attacked the bank, he would lose Pennsylvania; if he lost Pennsylvania, he would lose the election. Clay aligned himself with bank president Nicholas Biddle, the picture of the educated eastern establishment of his day—dapper, smooth of manner, highly literate, widely schooled.

But Biddle also projected himself as just the kind of power broker that Jackson had always warned against. Biddle turned his position in the financial world into a political cudgel. He used bank funds to lobby Congress for special favors and treatment. He offered loans on favorable terms to supportive members of Congress (Daniel Webster was particularly rewarded) and funneled bank funds into the political campaigns of his favorite legislators. He contributed to the campaigns of those challenging his congressional foes (James K. Polk, a Jackson protégé, was particularly targeted). At one point, he even squeezed the money supply to generate a recession in hopes of undermining Jackson’s political standing. Bowing to Clay’s request, Biddle asked for a bank charter extension. Clay rubbed his hands together and vowed, “Should Jackson veto it, I shall veto him.”

Jackson did veto it, and in doing so he expanded upon the anti-crony-capitalism message of his National Road veto. In measured and detailed language, the president portrayed the bank as a government-sponsored monopoly that employed the money of taxpayers to enhance the power, privileges, and wealth of a very few Americans and foreigners—“chiefly the richest class”—who owned stock in the bank. If government is to grant such gratuities, he said, “let them not be bestowed on the subjects of a foreign government nor upon a designated and favored class of men in our own country.” Rather, he added, such favors should be confined “to our own fellow-citizens, and let each in his turn enjoy an opportunity to profit by our bounty.”

Jackson then made clear that he harbored no impulse toward economic equality or societal leveling. His aim merely was to ensure that the levers of government were not used to bestow special beneficence upon a well-positioned few. “Distinctions in society will always exist under every just government,” he said. “Equality of talents, of education, or of wealth can not be produced by human institutions. In the full enjoyment of the gifts of Heaven and the fruits of superior industry, economy, and virtue, every man is equally entitled to protection by law.” Thus did Jackson declare that government should not interfere with any citizen’s pursuit of wealth and, further, that government had an affirmative obligation to protect the rich from the forces of envy bent on taking their wealth away. The general harbored no redistributionist sentiments.   

This expression crystallizes the difference between conservative populism and the liberal version. Liberal populism sets itself against the rich and corporate America. It wishes to bring them down, largely through governmental leveling. In the 2016 presidential campaign, Vermont Sen. Bernie Sanders distilled the essence of liberal populism, stirring considerable excitement among many Democrats. But Jackson, by contrast, harbored no ill will toward society’s winners. He merely hated government action that favored the wealthy or gave favored citizens special paths to wealth. His message continued: “but when the laws undertake to add to these natural and just advantages artificial distinctions, to grant titles, gratuities, and exclusive privileges, to make the rich richer and the potent more powerful, the humble members of society—the farmers, mechanics, and laborers—who have neither the time nor the means of securing like favors to themselves, have a right to complain of the injustice of their Government.”

Rising to eloquence, Jackson added: “If it would confine itself to equal protection, and, as Heaven does its rains, shower its favors alike on the high and the low, the rich and the poor, [government] would be an unqualified blessing.”

Jackson got his veto sustained by Congress and then scored a lopsided reelection victory over Clay in November. Biddle, who dismissed Jackson’s veto message as having “all the fury of the unchained panther, biting the bars of his cage,” wasn’t prepared for this defeat or what came after. Upon reelection, Jackson promptly killed Biddle’s bank by withdrawing all federal funds from it and depositing them in various state banks. The American people, by all indications, approved, though these actions were highly controversial at the time—and remain so among many historians today.

Until Jackson, no American politician captured the evils of crony capitalism as sharply and powerfully as this combative frontier figure with his hair-trigger temper and pugilistic style. He not only entered the arena boldly on behalf of his philosophy and vision for America, but he also took the time and care to articulate that philosophy and vision in words that resonated with vast numbers of his fellow citizens. That’s how Jackson managed to dominate the terms of domestic-policy debate in America for a generation. His program—low taxes, small government, a level playing field for all Americans, strict construction of the Constitution—became the program favored by most Americans.

It’s important to remember that among the most compelling issues facing America at the dawn of its creation and into its second-generation era of politics was the question of the size and power of the federal government. That question animated the debates at the Constitutional Convention at Philadelphia in the summer of 1787. It was one of the most important questions explored in what became known as the Federalist Papers, produced by James Madison, John Jay, and Hamilton in support of constitutional ratification. The fear was tyranny, governmental abuse of power, unequal treatment of citizens by untethered government officials—all the things that had led to the American Revolution and the breakaway from the Mother Country.

Jackson was a purist on these matters. He wasn’t inclined to wait for actual tyranny or governmental abuse. He assumed those evils would emerge inevitably whenever governmental power became sufficiently concentrated that officials could protect themselves from countermeasures designed to keep them in check. So he wouldn’t countenance a federal road project that extended over state lines. He wouldn’t entertain the idea of a federal bank, aligned with private banks under governmental sponsorship, that could bestow favors willy-nilly based on considerations of power aggrandizement. Like Lord Acton, he believed firmly that power corrupts.

Today crony capitalism is rampant throughout the American economy. The Jacksonian ethos has been tossed aside as the federal government has reached a position of power and insulation that allows it to pursue at will just the kinds of special arrangements that Old Hickory railed against. And today his warnings are ignored as his reputation in history is being undermined by cadres of political correctness based on arguments that have little relevance to today.

But for those who lament the crony favoritism so widely seen in the American economy of our time, Jackson stands tall. He saw it coming and articulated political and economic principles designed to keep it at bay.

Robert W. Merry, longtime Washington, DC, journalist and publishing executive, is editor of The American Conservative. His next book, President McKinley: Architect of the American Century, is due out from Simon & Schuster in September.