Henry C. Carey (1793-1879)
American economist and sociologist, often called the founder of the American school of economics, widely known in his day as an advocate of trade barriers.
Henry Carey was the eldest son of Mathew Carey, an Irish freedom fighter who was recruited to the intelligence networks established by Benjamin Franklin, and sent to Philadelphia to run what was then the largest printing operation in North America. Mathew Carey's 1814 book, The Olive Branch, issued a few months after British Admiral Cockburn had sacked and burnt Washington, D.C., played a crucial role in bolstering sagging public and military morale, by exposing the rift between the Federalist and Republican Parties as a major cause of the inept prosecution of the war up to that point.
On Jan. 1, 1817, Henry Carey was made a partner in his father's publishing firm, Carey, Lea & Carey. Among others, Carey published Washington Irving. In 1835, as London financiers began to retreat from further U.S. investmentssetting the stage for the 1837 panicCarey withdrew from the business, and devoted himself entirely to the study of economic issues. His first book was published that year, Essay on the Rate of Wages, which was marked by contradictory tendencies. While accepting the British free trade doctrine of "laissez-faire," Carey rejected David Ricardo's doctrine of rent, and refuted Thomas Malthus's doctrine of ever scarcer resources by arguing that the application of capital and human invention (technology) overcomes the limitations of supposedly infertile soils.
Carey further developed these economic ideas in Principles of Political Economy, published in three volumes from 1837 to 1840. It made the fundamental departure from the British economic theorists by declaring that land derives its value from the capital expended on it, and that workers' wages increase faster than the returns of capital, thus tending towards "a progressive diffusion of wealth among the poorest classes of society."
The financial and economic depression which followed the 1837 panic, and his father Mathew's unremitting advocacy of protection, against free trade, persuaded Carey to become an increasingly fierce and vocal opponent of free trade in the 1840s. Carey's first major statement of his new position was the 1845 pamphlet Commercial Associations in France and England, followed in 1848 by the book Past, Present, and Future. This book enjoyed extraordinary influence, coming as it did just after the parliament of Great Britain abolished the Corn Laws, and that unhappy nation began to descend into the social and economic morass captured in the fiction of Charles Dickens. Carey became a regular contributor to Horace Grails' New York Tribune, and began a correspondence with leading political figures on the major issues of economic and finance.
Carey's next book was The Harmony of Interests: Agricultural, Manufacturing & Commercial (1851) and is notable for its repeated and fierce attacks on British economic doctrines. "The whole system," of British free trade has for its object an increase in the number of persons that are to intervene between the producer and the consumerliving on the product of the land and labour of others, diminishing the power of the first, and increasing the number of the last . . . The impoverishing effects of the system were early obvious, and to the endeavour to account for the increasing difficulty of obtaining food where the whole action of the laws tended to increase the number of consumers of food and to diminish the number of producers, was due the invention of the Malthusian theory of population . . . " The American Iron and Steel Institute, among others, helped circulate The Harmony of Interests.
Carey next turned his attention to the impending crisis in the United States' southern states, publishing, in 1853, The Slave Trade, Domestic and Foreign. "By adopting the 'free trade,' or British, system," Carey warned, "we place ourselves side by side with the men who have ruined Ireland and India, and are now poisoning and enslaving the Chinese people. By adopting the other, we place ourselves by the side of those whose measures tend not only to the improvement of their own subjects, but to the emancipation of the slave everywhere, whether in the British Islands, India, Italy, or America."
Carey became one of the most prominent supporters of the new Republican Party, as it struggled into existence, then national dominance, in the last half of the 1850s. As Gabor Boritt, in Lincoln and the Economics of the American Dream notes, "The dismal science' of the Europeans, laden with Malthus and Ricardo, was not acceptable to an optimistic young nation. Not many economists and no politicians could preach industrialization in the United States and also accept, for example, an iron law of wages that doomed labor forever to a bare subsistence. The Americans, and few more so than Henry Carey, made political economy the .eautiful science.'" Further securing Carey's prominence was the financial Panic of 1857, which was widely ascribed to the passing of the "free trade" tariff law a few months before. The American protectionist tariff of 1861 commenced a reaction against unrestricted commerce in which Carey's apostleship and authority were internationally recognized. He was the leader of the only group that can be said to constitute an American school of political economy.
As an optimist, he believed in the possibility of steady economic progress and in the harmony of diverse economic interests. Still, as a Republican and a nationalist, Carey believed trade protection was essential during the initial phase of a nation's industrial development. His home served as a salon for disciples and visitors, and his reputation was perhaps greater abroad than at home.