In a liberal society such as prevailed in America during the Jeffersonian and Jacksonian eras, where the aristocracies, peasantries, and proletariats of Europe are missing, where virtually everyone, including the nascent industrial worker, has the mentality of an independent entrepreneur, two national impulses are bound to make themselves felt: the impulse toward democracy and the impulse toward capitalism. The mass of the people, in other words, are bound to be capitalistic, and capitalism, with its spirit disseminated widely, is bound to be democratic. This is one of the basic insights Tocqueville had about the actual behavior of the American people. The irony of early American history, however, is that these impulses, instead of supplementing each other, seemed to fight a tremendous political battle. The capitalist Whiggery of Hamilton was frightened of democracy, and the democratic tradition of Jackson, which was therefore able to destroy it, formulated a philosophy which seemed to deny its faith in capitalism. The result was a massive confusion in political thought, comparable to the one that we find in the constitutional era, and a set of victories and defeats which the Americans who experienced them scarcely understood. One is reminded of two boxers, swinging wildly, knocking each other down with accidental punches.
Looked at from one point of view, it is strange that Federalism and neo-Federalism should have been shattered so badly in the liberal setting of American politics.