Henry Charles Carey

Henry Charles Carey (December 15, 1793 – October 13, 1879) was the leading 19th-century economist of the American School, and chief economic adviser to U.S. President Abraham Lincoln.

Carey is best known for the book ''The Harmony of Interests: Agricultural, Manufacturing, and Commercial'' (1851), which denigrates the "British System" of ''laissez faire'' free trade capitalism in comparison to the American System of developmental capitalism, which uses tariff protection and government intervention to encourage production and national self-sufficiency.

Biography

Born in Philadelphia, Pennsylvania in 1793, Carey was the son of Mathew Carey (1760–1839), an influential economist, political reformer, editor, and publisher. Mathew Carey was born in Dublin, Ireland but emigrated to Philadelphia in 1784, where with the help of Benjamin Franklin and the Marquis de Lafayette he founded a publishing firm. Among his many writings was ''Essays on Political Economy'' (1822), one of the earliest American treatises favoring Alexander Hamilton's idea of protection and its use in the promotion of American industry.

In 1825, Carey succeeded his father in the publishing firm, which became Carey & Lea, attaining a leading position in America. In 1835, Carey co-founded the famous Franklin Fire Insurance Company of Philadelphia.

Carey retired from business in 1838 while publishing his 4-volume treatise (1837–1840) ''Principles of Political Economy'', which soon became the standard representation of the American school of economic thought, and was translated into Italian and Swedish, with some variance, dominating the U.S. economic system until 1973.

He died at his home in Philadelphia on October 13, 1879.

Work

''The Principles of Social Science''

Carey's first large work on political economy was preceded and followed by many smaller volumes on wages, the credit system, interest, slavery, copyright, etc.; and in 1858–1859 he gathered the fruits of his lifelong labours into ''The Principles of Social Science'', in three volumes. ''Principles'' is a comprehensive and mature exposition of his views. In it, Carey sought to show that there exists, independently of human wills, a natural system of economic laws, which is essentially beneficent and spontaneously increases prosperity of the whole community, and especially of the working classes, except when it is impeded by the ignorance or perversity of humankind. He bases its economy on Colbert system, system protecting manufactures helping farms with roads.

He rejected the Malthusian doctrine of population, maintaining that the only situation in which the means of subsistence will determine population growth is one in which a given society is not introducing new technologies or not adopting forward-thinking governmental policy. Population regulated itself in every well-governed society, but its pressure on subsistence characterized the lower stages of civilization. Carey denied as the universal truth, for all stages of cultivation, of the law of diminishing returns from land.

His position relates to the antithesis of wealth and value. Carey held that land in industrial life is an instrument of production formed by human labour. A product's value was due to the labour expended on it in the past (measured by the labour necessary under existing conditions to bring new land to the same stage of productiveness). He studied the occupation and reclamation of land with peculiar advantage as an American, for whom the traditions of first settlement were living and fresh, and before whose eyes the process was indeed still going on. The difficulties of adapting a primitive soil to the work of yielding organic products for human use can be lightly estimated only by an inhabitant of a country long under cultivation.

Carey believed that the overcoming of these difficulties by arduous and continued effort entitles the first occupier of land to his property in the soil. Its present value forms a very small proportion of the cost expended on it, because it represents only what would be required, with the science and appliances of our time, to bring the land from its primitive into its present state. Thus, property in land is only a form of invested capital, a quantity of labour or the fruits of labour permanently incorporated with the soil. The owner of this capital is compensated, as any other capitalist, by a share of the produce. The owner is not rewarded for what is done by the powers of nature, and society is in no sense defrauded by his sole possession.

The so-called Ricardian theory of rent is a speculative fancy, contradicted by all experience. Unlike what the theory supposes, cultivation does not begin with the best soils and move progressively towards poorer soils. The light and dry higher land is cultivated first; only when population becomes dense and capital accumulates is low-lying land attacked and brought into occupation. Low-lying land is more fertile but also has morasses, inundations and miasmas. Rent as a proportion of the produce sinks, like all interest on capital, but increases as an absolute amount. The share of the labourer increases both as a proportion and an absolute amount. Thus, the interests of these different social classes are in harmony. But, Carey proceeded to say, in order that this harmonious progress may be realized, what is taken from the land must be given back to it. All the produce derived from the land is part of it, and must be restored to avoid its exhaustion. Hence the producer and the consumer must be close to each other; the products must not be exported to a foreign country in exchange for its manufactures, and thus go to enrich as manure a foreign soil. In immediate exchange value, the landowner may gain by such exportation, but the productive powers of the land will suffer.

''The Way to Outdo England Without Fighting Her''

In March 1865, Carey published a series of letters to the Speaker of the House of Representatives, Rep. Schuyler Colfax, entitled "The Way to Outdo England Without Fighting Her". In these letters, Carey advocated the continuance of Abraham Lincoln's Greenbacks policy of debt-free, government-issued money as a way of freeing America's economy from British capitalists, who sought to control America's wealth.

He also suggested raising the reserve requirements on private banks up to 50%. Here are some excerpts from Carey's work, which history shows fell upon deaf ears, as the subsequent Long Depression of 1873–96 plagued America with financial panics because of the inability of the National Banking System to provide the public with all the currency it needed:

Honors & Legacy

Carey, who had set out as an earnest advocate of free trade, ultimately arrived at the doctrine of protection: the coordinating power in society must intervene to prevent private advantage from working public mischief. He attributed his conversion on this question to his observation of the effects of liberal and protective tariffs respectively on American prosperity. This observation, he says, threw him back on theory, and led him to see that intervention might be necessary to remove (as he phrases it) the obstacles to the progress of younger communities created by the action of older and wealthier nations.

Carey elected to prestigious societies during his lifetime:

* Elected a member of the American Philosophical Society in 1833
* Elected an Associate Fellow of the American Academy of Arts and Sciences in 1863
* Elected a foreign member of the Royal Swedish Academy of Sciences in 1868

Publications

Carey's publications included:
* '' Essay on the Rate of Wages'', Philadelphia, 1835.
* '' Principles of Political Economy'', Philadelphia, 1837-40 (3 volumes).
*
The Credit System in France, Great Britain and the United States
', London, 1838.
*
The Past, the Present and the Future
', Philadelphia, 1848.
*
The Harmony of Interests, agricultural, manufacturing and commercial
', New York, 1851.
* '' Letters on international copyright'', Philadelphia, 1853.
*
The Slave Trade, Domestic and Foreign : Why It Exists & How It May Be Extinguished
', Philadelphia, 1853.
* '' The North and the South'', New York, Ann Arbor, Office of the Tribune, 1854.
* ''American Labor Versus British Free Trade'', Philadelphia, 1855.
* '' Letters to the President on the Foreign and Domestic Policy of the Union and Its Effects, as Exhibited in the Condition of the People and the State'', Philadelphia, 1858.
*
Principles of Social Science
', 3 volumes, Philadelphia, 1858-60.
* '' Money: A Lecture Delivered before the New York Geographical and Statistical Society'', Philadelphia, 1860.
*
Financial Crisis: Their Causes and Effects
', Philadelphia, 1864.
*
The Way to Outdo England Without Fighting her
', Philadelphia, 1865.
* '' The Currency Question. Letters to the Hon. Schuyler Colfax'', Chicago, 1865.
* ''Contraction or Expansion? Repudiation or Resumption? Letters to the Hon. Hugh M'culloch, Secretary of the Treasury'', Philadelphia, 1866.
* '' The public debt, local and national: how to provide for its discharge while lessening the burthen of taxation. Letter to David A. Wells, Esq., Chairman of the Board of Revenue Commissioners'', Philadelphia, 1866.
* '' Review of the Decade 1857-67'', Philadelphia, 1867.
* Reconstruction: industrial, financial, and political. Letters to the Hon. Henry Wilson, U. S. Senator from Massachusetts, Washington, 1868.
* '' How protection, increase of public and private revenues, and national independence, march hand in hand together : review of the report of the Hon. D.A. Wells, Special Commissioner of the Revenue'', Philadelphia, 1869.
*'' Shall we have peace? Peace financial, and peace political? Letters to the president elect of the United States'', Philadelphia, 1869.
* '' A Memoir of Stephen Colwell: Read before the American Philosophical Society'', Philadelphia, 1871.
*
The Unity of law; as Exhibited in the Relations of Physical, Social, Mental and Moral Science
', Philadelphia, 1873.
* '' Commerce, Christianity, and Civilization, versus British free trade : letters in reply to the London times'', Philadelphia, 1876.

References

; Attribution
*

Further reading

* Elder, William
''A Memoir of Henry C. Carey,''
Henry Carey Baird & Co., 1880.
* Green, Arnold Wilfred. ''Henry Charles Carey: Nineteenth-century Sociologist,'' University of Pennsylvania Press, 1951.
* "Henry Charles Carey," ''Daedalus,'' March 1881.
* Kaplan, Abraham D. H.
Henry Charles Carey: A Study in American Economic Thought
'' The Johns Hopkins Press, 193
archive
.
* Lee, Arthur M.
Henry C. Carey and the Republican Tariff
" ''The Pennsylvania Magazine of History and Biography,'' Vol. 81, No. 3, Jul., 1957
Archive
.
* Levermore, Charles H
"Henry C. Carey and his Social System,"
''Political Science Quarterly,'' Vol. 5, No. 4, Dec., 1890.
* Morrison, Rodney J. "Carey, Classical Rent, and Economic Development," ''The American Journal of Economics and Sociology,'' Vol. 27, No. 3, Jul., 1968.
* Morrison, Rodney J. "Henry C. Carey and American Economic Development," ''Transactions of the American Philosophical Society,'' New Series, Vol. 76, No. 3, 1986.
* Turner, John Roscoe
"Henry Charles Carey."
In ''The Ricardian Rent Theory in Early American Economics,'' The New York University Press, 1921.
* Nathan. Baily - Henry Charles Carey : forgotten prophe

(need to be a searcher)
* Ariel Ro
“Scientific Agriculture” and Economic Development in the Antebellum North
(textual pdf but login needed)

External links

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{{DEFAULTSORT:Carey, Henry Charles
1793 births
1879 deaths
Scientists from Philadelphia
American people of Irish descent
Fellows of the American Academy of Arts and Sciences
19th-century American economists
Members of the Royal Swedish Academy of Sciences
Economists from Pennsylvania