The musical Hamilton is Broadway’s latest hit. In fact, it’s so popular that it’s tough to find a ticket for under $300! Fortunately, they’ve released a cast recording so you can hear the songs even if you can’t afford to get in. The show tells the story of Alexander Hamilton, the first US Treasury Secretary, using hip-hop tunes. As you might imagine, given its subject, there’s some really great stuff in there about economics.
Let’s start with the second act, and the song 'Cabinet Battle #1'. It features a debate between Hamilton and Secretary of State (and later the third US president) Thomas Jefferson about Hamilton’s financial plan for the new nation. The plan contained three recommendations: for the US to create a , for the US to assume the debts of the individual states, and whether the US should pay back the national debt accumulated during the revolutionary war.
The debate we hear in the song covers the first two items of the plan and is fun yet fierce. Jefferson is concerned with the autonomy of the individual states, singing: “If New York’s in debt why should Virginia bear it? Uh, our debts are paid I’m afraid, don’t tax the South cuz we got it made in the shade”.
He goes on: “This financial plan is an outrageous demand and it’s too many damn pages for any man to understand”, which prompts Hamilton to counter by singing: “If we assume the debts, the union gets a new line of credit, a financial diuretic”. In true rap battle style, he also slips in the fact that Jefferson is a slave owner, so it’s somewhat hypocritical for him to talk about freedom.
This song is a brilliant introduction to the details of Hamilton’s plan, which eventually did pass, in part because a compromise between Hamilton and Jefferson was made. This involved conceding to the stipulation that the country assumed the states’ debts in exchange for the US capital moving from New York City to its current location in Washington D.C.
'Cabinet Battle #1' also makes for a good introduction to many modern topics, such as the controversies over having a central bank. In the US, the Federal Reserve Bank, which came into being in 1913, is still controversial, with some major contemporary political candidates wishing to abolish it. Jefferson’s lines about the size of Hamilton’s financial plan also have relevance to modern US politics, where politicians have passed laws worth hundreds of billions of dollars without reading them – often because the bills are hundreds or thousands of pages long.
The brilliant tune ‘My Shot’ also illustrates several economic concepts. First, Hamilton sings about going to King’s College (which is now Columbia University) to gain more skills, as he claims “the problem is I’ve gotta lotta brains but no polish”. In another section of the song we hear from the character Mulligan, who’s an apprentice to a tailor. He echoes Hamilton’s aspirational desires when he sings: “I’m joining the rebellion cause I know it’s my chance to socially advance, instead of sewin’ some pants”.
University education is one of the main ways that individuals can improve what’s called their human capital, in order to get better jobs and live better lives - that was true in the late 1700s and is still true today. But a university education certainly is not the only way to advance in one’s career. Most people in developed countries today do not necessarily think of joining the military as the best way to advance socially, but it was a step up the ladder for many in the past and still is in some parts of the world. Acquiring human capital can lead to increased wages and increased social mobility.
In fact ‘My Shot’ touches on wide range of economic issues, including taxes, economic freedom, slavery, and time preferences.
A third song worth highlighting is called ‘Satisfied’. It’s sung by the character Angelica Schuyler (the daughter of prominent US general Philip Schuyler) while attending the wedding of Hamilton and her sister, Eliza. Angelica actually met Hamilton first, and could have pursued him, but instead gave her sister the chance to get together with him. The song provides a wonderful illustration of trade-offs. Angelica is clearly pained by her decision, but goes through a three-part list of why she made it, singing:
I’m a girl in a world in which
My only job is to marry rich
My father has no sons so I’m the one
Who has to social climb
He’s after me cuz I’m a Schuyler sister
That elevates his status, I’d
Have to be naïve to set that aside
I know my sister like I know my own mind
You will never find anyone as trusting or as kind
If I tell her that I love him she’d be silently resigned
He’d be mine
She would say, “I’m fine”
She’d be lying
Throughout the song, it’s clear she’s made a tough decision, because she seems to be in love with Hamilton. But careful analysis shows the rational part of her mind thinks she made the right choice - it’s just that there were serious trade-offs to make. Most economic textbooks discuss the importance of this concept in the opening chapter. In fact, in Greg Mankiw’s Principles of Economics, he writes: “ : To get one thing, you have to give up something else. Making decisions requires trading off one goal against another.”
There’s so much more in this show that can teach us about economics. I could pick numerous examples from other songs, but that would take a much longer article! My advice for those who haven’t seen Hamilton yet or heard the soundtrack, is to go, or listen, and just take it all in the first time. But the next time you hear those songs, listen out more carefully for the economic concepts and principles they mention. Some are pretty straightforward, some are more complex, but Hamilton is such a great show that it makes finding out about economics a really engaging and enjoyable experience.
Dr. Matthew Rousu is Professor and Warehime Chair in the Department of Economics at Susquehanna University. He also runs the website broadwayeconomics.com.
This article was authored in American English