When discussing the history of the two major political parties and their ideologies, most people have a tendency to get very confused and with good reason.
Both major parties of today have their origins in the early 1790s, coming out of disputes in George Washington’s Cabinet between Secretary of State Thomas Jefferson and Secretary of the Treasury Alexander Hamilton. Jefferson opposed Hamilton’s entire fiscal program, arguing for a limited federal government and a strict interpretation of the Constitution. Hamilton wanted the new government to expand beyond its constitutional powers, the Constitution becoming what he hoped would be a “fail and worthless fabric.”
Though the Founders yearned for a nation without parties, or factions, as they called them, inevitably they did form. One was the Federalist Party, founded by Hamilton, which lasted from 1792 to 1816, the last year it ran a candidate for President, having succumbed to the might of Jefferson as well as its opposition to the War of 1812. The other was Jefferson’s Republican Party (sometimes referred to as the Democratic-Republicans), lasting from 1792 to 1824. The two parties in existence today can be traced to these two original organizations.
From 1816 to 1824, after the collapse of the Federalists, there was only one party, the Republicans, during the Era of Good Feelings and the presidency of James Monroe. With only one party, factions naturally developed within it, and in 1824, the Republicans split into the National Republicans, led by John Quincy Adams and Henry Clay, and the Democratic Party of Andrew Jackson, which became the modern Democratic Party of today. The National Republicans became the Whigs in 1834 and lasted until 1854, when most of its supporters formed the Republican Party of Abraham Lincoln, which is the modern GOP.
However, the two parties have, over time, switched ideological positions, particularly on economic issues. In the 19th and early 20th centuries, the Democratic Party was the conservative party. Many right-wing Republicans today, though it may be hard to fathom, would have been Democrats during this period. The Democratic Party began its shift to the political left with William Jennings Bryan and Woodrow Wilson. By contrast, today most left-wing Democrats would have probably felt more at home in the Party of Lincoln, which inaugurated a move to the right with Warren Harding and Calvin Coolidge.
The 19th century Democratic Party, of Jefferson, Jackson, and Grover Cleveland, maintained their hold on the Jeffersonian values of smaller government, strict construction of the Constitution, states’ rights, low taxes and tariffs, no national debt, laissez faire economic policy, a sound currency, and a non-interventionist foreign policy.
The Republicans, ideological heirs to Alexander Hamilton and Henry Clay, believed in a more energetic national government, loose construction of the Constitution, activist judges, federally-administered civil rights and governmental assistance for former slaves, high protective tariffs, a national banking system, a national debt, government paternalism, subsidies to business, economic regulation, an inflationary monetary policy, and, at the end of the 19th century, foreign adventurism.
To learn more about late 19th century American politics, read my book The Last Jeffersonian: Grover Cleveland and the Path to Restoring the Republic.