The news that Alexander Hamilton is to be demoted from the $10 bill was received with a shudder by America's most prominent financiers. Former Fed chair Ben Bernanke was "appalled." Steven Rattner - the prominent progressive investment banker - defended Hamilton as a "visionary genius." The New York Times opined there was "good reason to keep Hamilton." Somewhat less than surprisingly, the CEO of the Bank of New York Mellon -- founded by Hamilton -- opposed the decision. And financial journalists decried the decision in seeming unison.
Treasury Secretary Jack Lew was forced to backtrack: "It personally [is] very important to me to make sure that as we make this decision we continue to honor Alexander Hamilton, who played such a formative role in the creation of our country, the establishment of democracy as we know it, and the principle of the soundness of our currency," Lew said.
The backlash is telling. The fact is that Hamilton loathed democracy -- and his ethos and approach represent so much of what has gone wrong in a financial industry that has gone "upstream" in its client base and focus. Replacing him would not only make way for a woman, it might just spark a needed wake-up call for Wall Street.
Despite his modest birth, Hamilton consistently, proudly, advocated for those who had made it rather than those on the make. "All communities divide themselves into the few and the many," Hamilton told his colleagues gathered at Independence Hall for the Constitutional Convention. "The first are the rich and well-born; the other the mass of the people. . . turbulent and changing, they seldom judge or determine right. Give therefore to the first class a distinct share of government."
This worldview shaped Hamilton's economic policies, as well. He believed that government's "interference and aid" through special subsidies would provide the capital and resources with which a wealthy elite would lift the new republic's economy.
Hamilton's intellectual and political rival, Thomas Jefferson, had a different approach. At its essence, the debate between them was not about industry versus agriculture, but whether the American economy was driven from the top down or from the bottom up. As the historian Samuel Eliot Morison wrote in 1965, "Hamilton wished to concentrate power; Jefferson to diffuse power." In 1776, Jefferson proposed giving every white adult male in Virginia 50 acres of land if they did not already own that much - a proposal that, in that era of land requirements for voting, would have put not only economic but political power into the hands of the many. It was the kind of idea that Hamilton so scorned. "Our real disease is democracy," he wrote the night before he was struck down by Aaron Burr's bullet.
Jefferson's ideas made sense for the times. In 1800, 75 percent of the free workforce consisted of independent farmers, and most of the rest were independent shopkeepers. Only 12 percent had what might be recognized as a "boss." The word itself was rarely used until the 1830s.
Yet, by 1920, 87 percent of all wage earners were not only working for someone else, but for a corporation. Hamilton's philosophy was appropriate for a 20th century America that had moved from a land of small farms to industrial factories, strict hierarchies, and an outsized voice for Big Business.
But, today, in an era of empowering technology, America is once again reentering a Jeffersonian moment. For better or worse, the number of Americans working for themselves is growing rapidly. In many workplaces and in much of the consumer marketplace, power and decision-making is being democratized. Hamilton is in retreat everywhere - except for on Wall Street.
The financial industry has become more top-down at the very moment the rest of the world is going bottom-up. More so than at any time since the 1920s, Wall Street investment firms see serving ultra high-net worth individuals as the core of their business. Retail investors are increasingly an afterthought or an unprofitable burden. The days when there was a Dean Witter branch in Sears stores around the nation are long gone.
So while the 1980s and 1990s saw a dramatic democratization of asset-building for Americans, with a ten-fold increase in the percentage of retail investors, that trend has stalled - or slid. In fact, since 2001, the percentage of American families between the 20th and 80th percentiles of income that own stock has actually fallen by between 4 and 9%. This shift of focus from the many to the few is both the cause and result of growing wealth inequality - a spiral feeding on itself.
The testy response of financial professionals to the idea of removing Hamilton from the $10 bill indicates the move touched a nerve that is less about the currency than about Wall Street's current public standing. As the financial industry has increasingly lost its focus on providing services to everyday Americans, it has found itself beset by populists ranging from the Tea Party to Occupy Wall Street. But there is a better response than a defensive embrace of America's most famous champion of plutocracy.
Because of the same technologies upending so much of the rest of our economy, Wall Street has the opportunity to democratize investment opportunities; placing assets in the hands of the many instead of only the few. It would require a new business model and a willingness to regard the current structure as we should respond to demoting Hamilton on our currency: "Good riddance."