H. C. Carey The American School

Henry Charles Carey and The "American School", Carey Theroy

In so far as anything like a distinctively American school of political economy existed during the course of the eighteenth and nearly the whole of the nineteenth centuries, its character­istics were those to be expected from the history of the country and its economy. Americans were filled with a great desire to build up the economic independence of the young nation, and this spirit was coupled with an optimism born of apparently inexhaustible natural resources. As will be seen, the thought of Henry C. Carey was the culmination of these factors.

It should be noted in advance that this early American economist may be said to have had a dual system of thought; or he may be called philosophically inconsistent. In some re­spects, he so differed from the Classical economists that one is tempted to list him as an out-and-out opponent. In certain important essentials, however, he agreed with the Classical thought, and we therefore divide our treatment of him, this chapter presenting him as a critical follower of Adam Smith, while a later one will deal with his most important departure, namely, his "Nationalism." Carey, on the whole, accepted a concept of economics based upon the price system, and he pre­sents a theory of value of the same general type as the Classical theories. He appears to have had a concept of the problem of distribution which enabled him to rely upon the automatic working of social laws. No one would think of Bastiat as an opponent of the Classical economics, or as a Nationalist; yet the economic theories of Carey and Bastiat are so similar that historians still differ as to which of the two was the originator. We must, therefore, distinguish Carey's general economic theory from his Nationalistic protectionism.

Carey's Followers of the Early American School

In so far as an American School of political economy was ever spoken of in the nineteenth century, Carey and his adherents are meant. This is perfectly proper. America during that period had no other body of economists who could by any possibility be con­sidered as forming a school. Carey found warm admirers on this side of the Atlantic as well as on the other. Many were ready to accept his system as proved beyond the possibility of doubt. The following may be considered as among the more noteworthy of his American followers.

First, E. Peshine Smith, who wrote a Manual of Political Economy, which was published in Philadelphia in 1853, and was later given a French translation. It contains an exposition of Carey's system in the form of a textbook. Peshine Smith ac­knowledges frankly that Carey is his master, and declares his unbounded faith in him. In his preface he says: "Mr. Carey, by showing that the fact is directly the reverse of the hypothesis of Ricardo, and by establishing the consequences which flow from it, restored harmony to what was before a mass of dis­cordances, and rendered it possible for the first time to construct a science out of what was a mere collection of empirical rules." Smith explains that the object of his manual is to provide us with a truly American system of political economy. Another author, who, though possessed of more ability and independence, was influenced by Carey, and may be classed as a member of the Early American School, attempted to do the same. This was Francis Bowen (1811-1890), formerly pro­fessor of political economy in Harvard, and author of the American Political Economy, published in 1870.

In his Politics for Young Americans, in many respects an ex­cellent little work, Charles Nordhoff expresses strong admiration for Carey, and shows himself an undoubting disciple.

Horace Greeley wrote a work on political economy, pub­lished in Boston in 1870, the full title of which indicates its scope: Essays designed to elucidate the Science of Political Econ­omy, while serving to explain and defend the Policy of Protection to Home Industry as a System of National Cooperation for the Elevation of Labor. The book is well worth reading.1 Neither Bowen nor Greeley was dependent upon Carey to the extent that Nordhoff was, but it seems that both should be considered as belonging to the "American School."

Others who might be mentioned are Stephen Colwell, The Relative Position in Our Industry of Foreign Commerce, Domestic Production and Internal Trade (1850), The Ways and Means of Commercial Payment (1858), The Claims of Labour and their Precedence to Claims of the Trade (1861); William Elder, Con­versations on Political Economy (1882); and Robert Ellis Thomp­son, Social Science and National Economy (1875), Elements of Political Economy (1882), and Protection to Home Industry (1886). In more recent times, very clear traces of Carey's in­fluence appear in the thought of Professor S. N. Patten.