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his argumentative defence of that system is practically forgotten,
— so much easier was it for him to give vogue to an effective
name, than to give a scientific basis to the thing itself. Mr. Web-
ster discussed with great power many questions involving general
principles of political economy, but he never cared to apply his
intellect to the foundations of the science. Indeed, in one of his
letters he says : " I give up what is called the * science of political
economy.' ... I believe I have recently run over twenty vol-
umes, from Adam Smith to Professor Dew, of Virginia; and from



10 ESSAYS

the whole, if I were to pick out with one hand all the mere truisms,
and with the other all the doubtful propositions, little would be
left." Whatever else may be said of this passage, it absolves us
from the further explanation of Mr. Webster's failure to contribute
to the world's advancement in economic science. Of the contem-
poraries of these three great men, the other champions on whose
words listening senates once hung, in the fierce contest over tariff
and bank, no name can now be recalled as having any claim to
connection with the development of the science of which we speak.
Lowndes, Crawford, Wright, Berrien, McDuffie, Benton, and the
others may yet shine in our political history, but they are unknown
in political science.

And if we examine the roll of statesmen of the generation
which closes our century, what better success is met .-' We find,
indeed, the names of some men who have skilfully managed inter-
ests of vast magnitude, and of others, not in great number, who
have shown a competent scientific knowledge ; but we may
safely challenge the mention of one who has added to the stock of
economic principles with which the world was already acquainted,
or has given any essential assistance in their elucidation. As a
class our public men have confined themselves, like Franklin, to
the sagacious application of rules of thumb. So far as they have
dealt with the science at all, it has been made for them by others ;
and they have not aided in making it. Indeed, the promise held
out by Hamilton's great example, of the thorough examination of
questions in the fight of ascertained principles, has seldom been
fulfilled, even by our highest officers of administration. Few
things, in fact, are more noticeable in our recent political history
than the extreme fragility and brevity of the reputations acquired,
either in administration or in legislation, by most of our public
men who have assumed to deal with this class of subjects.

If we turn from the statesmen to the scholars of the United
States, the result is not more satisfactory. Down to the year 1820
no American produced any treatise on political economy which the
world has cared to remember. Such books of that period as come
to light, upon industrious search in forgotten corners, are crude,
unsystematic, full of empirical notions, and are now intellectually
obsolete. The philosophical study of the subject, to which Adam
Smith gave an impulse abroad, was, in fact, late in making any



ECONOMIC SCIENCE IN AMERICA H

public appearance on this side of the Atlantic. The increasing
interest in it is shown by three editions of the " Wealth of Nations "
(Philadelphia, 1789; Hartford, 181 1 ; ibid., 1818), and by the re-
printing of Ricardo's great work (Georgetown, 18 19) only two
years after its original publication. But when we remember that
on the other side of the Atlantic this period was marked by the
appearance of works so important, and in some cases of such last-
ing influence, as those of Malthus, Say, Ricardo, and Sismondi,
the poverty of American thought upon the subject is striking, even
if we allow, as we must, for the infancy of the country and the
consequent small number of its literary class. In the twenty years
which followed, the period of which we have just spoken, a toler-
ably rapid succession of treatises by American authors was given
to the public. Raymond (1820) brought to the discussion zeal and
ingenuity, but such looseness of method and want of precision of
ideas as to defeat his efforts and destroy the value of his work, —
which, indeed, from its confusion of definition and want of system,
seems a late growth of the generation which preceded Smith,
rather than one of that which followed him. Alexander H.
Everett, fresh from the influences of a long residence in Europe,
and of personal intercourse with some of the leading economists
of the world, published (1822) an answer to the essay of Malthus
on Population, which holds a place among the best of the many
attempts made in this direction ; but his dialectic skill was not able
even to supply the opponents of the Malthusian doctrine with a
common standing ground, and still less to prevent the doctrine
from being accepted in its essentials by the great majority of
economists who have followed, and even by many who imagine
that they reject it. Dr. Cooper, of South Carolina, issued a treat-
ise (1826), of which McCulloch says that, "though not written in
a very philosophical spirit, it is the best of the American works on
political economy that we have met with," — an encomium meas-
ured with judicious care. Dr. Cooper's chief success, in fact, was in
reproducing in systematic form the results attained by the English
economists, with whose works he was well acquainted ; but he did
nothing in original speculation. Willard Phillips produced a treat-
ise (1828) in which, treating the whole structure of Malthus and
Ricardo as unsound, he sought to take up the subject where Adam
Smith had left it. He treated it with an abundant knowledge of



12 ESSAYS

industrial and commercial facts, and with a mind well trained for
speculative inquiry ; but it was complained, even by a friendly con-
temporary critic, that he reared nothing in place of that which he
sought to remove. Rae's book (1834) has been pronounced by
high authority to be a valuable discussion of the subject of produc-
tion ; but as the work of a Scotchman settled in Canada, and origi-
nally intended for publication abroad, we can hardly count it as
an American contribution. President Wayland's book (1837) is
the only general treatise of the period which can fairly be said to
have survived to our day ; and this, it must be admitted, owes
whatever value it has to its manner of presenting for easy compre-
hension some of the leading English doctrines, — of which, how-
ever, it may be doubted whether the author ever fully recognized
the bearing. Vethake's treatise (1838) is now little known, its
more valuable portion having served its purpose, like the works of
Cooper and Wayland, of bringing before our public some of the
results, at that time unfamiliar, which had been reached by writers
not then well understood in this country. Other writers of this
period, like Dew, Newman, Tucker, and Potter, can be dismissed
even more summarily, so transient was their influence and so com-
pletely forgotten are their works.

The years which followed from 1840 down to the war for the
Union were for natural reasons much less prolific of works on
political economy than the period just noticed. The stimulus
given to the study of the science by the extraordinary advances
made in it by the great English investigators had ceased to be
active ; questions of currency, as we shall presently see, had
fallen into a subordinate rank ; the tariff question, after a furious
party struggle in which all considerations of political science were
lost sight of, seemed to have been settled ; and the great sectional
controversy began to fill all minds, to the exclusion of every other
public question. A few text-books appeared, recasting familiar
material; as, for example, the well-known treatise of Professor
Bowen (1856), in which he threw into connected form a long series
of articles and lectures produced by him in the preceding ten
years, and Bascom's convenient rhiirn^ oi economic theory (1859).
To these we must add Stephen Colwell's work on " The Ways and
Means of Payment" (1859), the production of an author who had
few equals as regards his acquaintance with economic literature,



ECONOMIC SCIENCE IN AMERICA 1 3

but who in this, his chief work, appears to have been led into
unprofitable subtleties, which have failed to influence appreciably
the opinions or studies of others. Beyond these works, however,
— and omitting for the present a writer whom we must notice
more at length further on, — our literature now has little to show
in this department except pamphlets and occasional essays of
limited interest, for the years in which the wonderful phenomena
of the California discoveries were occurring in our own country.

In the period which includes and follows the war we have a few
works like that of the late Amasa Walker (1866), with its earnest
but not always conclusive discussions of currency, and the vigorous
treatise by Professor Perry (1866), — both designed for use as
manuals, and claiming but little attention as statements of original
thought. In general it must be said of the last ten years, that
while they have witnessed a marked and salutary revival of
interest in economic discussion, the most absorbing questions
which have caused this revival have been quite too rudimentary to
lead to fresh development of principle. Whether we shall have
more paper, or shall return to specie, are questions caUing not for
research so much as for skill and force in rhetorical treatment,
which may carry axiomatic truths into unwilling or otherwise unre-
ceptive minds. It is true that the question whether our fiscal
policy should look to continued protection or to ultimate freedom
of trade involves more really controversial matter ; but this has
been so far overshadowed and complicated by the question of
currency, that it neither has produced nor seems to us likely
to produce for some time to come any marked originality of
investigation.

It might perhaps have been enough for our purpose, if, instead
of passing in review this series of American writers on political
economy, we had simply called attention to the fact that, with few
exceptions, the works produced in the United States have been
prepared as text-books by authors engaged in college instruction,
and therefore chiefly interested in bringing principles previously
worked out by others within the easy comprehension of under-
graduate students. The success with which this work has often
been done and its value, we shall not question ; but clearly it is
not by such means that discoveries in abstract science are likely to
be made or to be announced to the world. It should occasion no



14



ESSAYS



surprise, therefore, that of the considerable list of American
writers on the subject, so few have produced any impression out
of our own country, or have been able even at home to give to the
study any strong impulse. Not only has no American school of
writers on pohtical economy been established, if we except that
which we are about to notice, but no recognized contribution to the
development of the science can be pointed out in any way com-
parable to those made by the French writers, or to those which the
Germans are now making.

The writer to whom we have referred as offering in some
respects a possible exception to these general remarks is Mr.
Henry C. Carey. It cannot be said that Mr. Carey has not
engaged attention outside of his own country, for his works have
been translated and circulated in nearly every important language
of Europe, and Mr. Mill on several occasions pays him the dis-
tinguished tribute of singling him out in an especial manner from
a throng of opponents. Nor can it be said that he has won his
place by following others, for his system aims at nothing less than
revolution in the leading doctrines of political economy, and he
certainly bids fair to stand next to Malthus and Ricardo as a pro-
voker of controversy. This exceptional position has been attained
as the result of a long and laborious career as a writer. Mr.
Carey's first publication, in which he appears as an advocate of
free-trade, with an economic theory based on a new doctrine of
value, dates from 1835. His denial of Ricardo's doctrine as to the
law of production from land and his conversion to the theory of
protection followed a dozen years later. The final elaboration of
his system in opposition to what he is fond of calling the British
school appeared ten years later still, in 1858 ; and hardly a year
has passed since without some addition to the long line of his
works on this class of subjects. This series of publications has
had a distinct and not inconsiderable effect. Bastiat not only
borrowed Carey's law of value and presented it in a brilliant para-
phrase, but seems to show Carey's influence throughout his eager
search for harmonies in the economic world. In Germany, where
the way was no doubt prepared for him by the labors of Frederic
List, Mr. Carey has found a large class of readers, whose numbers
are explained by Dr. Uiihring of Berlin, the most active German
writer of this school, by pointing to the American author's early



ECONOMIC SCIENCE IN AMERICA 1 5

sympathy with the Germans and his prediction of their intellectual
leadership of the world ; although a more substantial ground of
explanation might be found in his more than German readiness to
refer to the coordinating power of the state, as a specific for
social or economic discords.

But while we may admit that the system elaborated by our
countryman is likely to be, as Diihring says, "a ferment of the
strongest kind " in the discussions of this generation, we must not
forget that to lead a school is not necessarily making a contribu-
tion to the science. Not much of Mr. Carey's work, we are con-
fident, will be found wrought into the political economy of the
future. His doctrine of value gives epigrammatic form to some
important general truths, but does not supersede the usual con-
ception of value as the ratio of exchange or purchasing power of
commodities, or enable us to dispense with the use of that con-
ception in dealing with a wide range of questions, both theoretical
and practical. His doctrine as to the law of production from land,
which is presented in fundamental contradiction of the English
school, is chiefly a statement as to historical development, which
does not touch the essential point of Ricardo's theory ; and while
he denies the whole of that theory and the law of Malthus as to
increase of population, his reliance upon a conjectured physiologi-
cal law as an ultimate limit to the increase of numbers, shows the
difficulty which he has found in avoiding as a logical conclusion
the tendency to increasing pressure upon the means of subsistence
pointed out by those writers. And it is upon his speculations as
to value, production from land, and population that, as we appre-
hend, his claims to be regarded as a permanent contributor to the
science would be rested, — not upon his later discussions of pro-
tection, the major part of which follows from the three lines of
speculation just named, nor upon his theorizing as to money, in
which his priority might be disputed by a series of writers, from
John Law down. That Mr. Carey, by his ardent attack, compels
a wholesome revision of positions and arguments there is no ques-
tion ; that he has checked some incautious generalizing we have
no doubt; but that he has overturned any previously accepted
principle of leading importance, still more that he has established
any new and valuable principle originated by himself, is a claim
which, in our judgment, cannot be made good.



I 6 ESSAYS

In thus recognizing Mr. Carey's position as a writer of excep-
tional importance, we are confirmed by observing that he is the
only American author noticed by Dr. Roscher in his exhaustive
" History of National Economy in Germany." But it must be
admitted, we think, that Mr. Carey's following, in our own
country, has had a more local character than might have been
expected from his wide reputation. The work of E. Peshine
Smith (1868), Dr. William Elder's "Questions of the Day"
(1871), and Professor Thompson's "Social Science" (1875) are
representative, not only of the views of his school, but almost of
its geographical limits in the United States. The conclusion at
which we have arrived, however, as to Mr. Carey's own position
with respect to the development of economic science, frees us
from the necessity of considering more particularly those writers
who have followed but have not advanced beyond him.^

The general result then to which, as we believe, a sober exami-
nation of the case must lead any candid inquirer, is, that the
United States have, thus far, done nothing toward developing
the theory of political economy, notwithstanding their vast and
immediate interest in its practical applications. It is not an
agreeable duty to declare a conclusion so little flattering to
patriotic sentiment; but to arrive at it as a truth forced upon
the mind by the history of economic science is still less agreeable.
And what explanation, it will be asked, is to be given for a failure
apparently so much at variance with what our material condition,
the general intelligence of our people, and the growth of intel-
lectual activity among us, might lead the inquirer to expect .'' The
answer to this question will be easier, if we briefly consider the
circumstances under which one of the leading public questions
having an economic bearing has been discussed and acted upon
in this country.

The question of paper currency, when it first came before the
people of the United States for settlement under the present Con-

^ It is impossible to make any serious mention of Mr. Greeley as a writer on political
economy, although his name is sometimes included in a full catalogue of Mr. Carey's
school. And we have not included the name of Mr. Colwell, because, while he, no doubt,
agreed with Mr. Carey in many points, we observe that in a note to the translation of
List's "National System of Political Economy," p. 335, he more than intimated dissent
from Mr. Carey's theory of rent ; and Mr. Carey's system, with that theory struck out,
w<juld not be recognizable by its author.



ECONOMIC SCIENCE IN AMERICA 17

stitution, in 1 790-1 791, was already complicated in a manner which
made its thorough investigation doubtful. Whether such paper
should be issued at all, whether it should be regulated by the
general government or the states, and whether the proposed
national bank should control the paper issues of the country, or
should be content with simply pouring its own into the general
mass, were questions the decision of which was in a manner fore-
stalled by the existence of banks of issue established several years
before under state authority, and not easily disturbed by the new
government. And the approach to the fundamental question as
to bank paper was still further embarrassed by the political turn
which the discussion took in its early stages. The advocates of a
liberal construction of the Constitution, and those of a strict con-
struction, arrayed their forces for battle over this question as soon
as it appeared. Nothing, indeed, could be more natural ; but
nothing could be more unfortunate for the proper settlement of
an economic problem. All scientific questions were made subor-
dinate to the political question at the outset. The party who
dreaded to see the natural government too strong were committed
in advance, in opposition to a measure which for them was part
of a general political system, and in large sections of the country
hostility to the bank became hostility to banking. And the
division of opinion upon this line, rather than upon abstract
principle, was promoted by the supposed opposition of interests
between the commercial states and the agricultural. Of thirty-
nine votes for the bill chartering the first Bank of the United
States, all but six were from states north of the Maryland line ;
of the twenty votes against the bill, all but one were from states
south of that line. How far the political side of the question of
banking overshadowed the scientific is clear from the manner in
which it was discussed by Mr. Jefferson, from whom one of the
great parties took its tone for years. That statesman's treatment
of the question of currency, and, indeed, of other economic ques-
tions of which the relations happened to be political, would to-day
be universally recognized as beneath the level of both his intellect
and his knowledge. His intense democracy, and his extreme
dread of any proposition based on English models or English
opinions, incapacitated him for any genuine discussion of this
subject in its larger aspects. And to what length the ignorant



1 8 ESSAYS

bigotry of many of his followers carried the hostility to banks,
which was instinctive with him, the political history of our first
half-century amply testifies.

The prudence and good judgment with which the first Bank
of the United States was conducted are now seldom questioned :
and the real service which it rendered, in its twenty years of
existence, toward giving a stable foundation for our finances, at a
time when the state banks and their issues were in actual chaos,
is not more doubtful. But the bank owed its existence to the
Federal party, and with the downfall of that party the renewal
of its charter became impossible. Late in the War of 1 812, an
empty treasury brought the government of the day to the support
of a new bank charter, as an expedient of the moment. Banks,
said Mr. Webster, in sober admonition, cannot give the means
of supporting an expensive war. " They are useful to the state
in their proper place and sphere, but they are not sources of
national income. The streams of revenue must flow from deeper
fountains." But so urgent was the demand for a bank, on grounds
of merely temporary policy, that Mr. Madison, who had opposed
the charter of the first Bank of the United States, vetoed, as
dilatory, one bill chartering the new bank, because it required
the institution to begin on the basis of specie payments. Happily,
the return of peace settled this weighty question for us, and the
second Bank of the United States was chartered, to begin as a
specie-paying bank, on the first day of January, 18 17.

But whatever influence the new Bank of the United States
might have had in directing the public mind to broader views
of the question of currency, had it been left to itself and had its
management continued to be sound, its circumstances did not
allow such influence to be exerted by it. Political hostility was
excited against it, and, six years before the expiration of its
charter, war was formally declared against it by President
Jackson. We, of the present generation, are in some respects
losers from the total and probably final disappearance of that
personal loyalty to great leaders, which marked our poHtics forty
years ago and gave to them a glow of generous enthusiasm ; but
in some respects we are also gainers. The overwhelming in-
dividuality of one man is not likely again to convert a high
question of economic policy into a mere struggle between " Jack-



ECONOMIC SCIENCE IN AMERICA 19

son and the bank," in which the rival clamors of personal ad-
herents and personal foes shall drown all considerations of
scientific or political principle. Such, however, was the ignoble
character of the contest which led to the final overthrow of the
second Bank of the United States. The financial revulsion which
followed that contest, and was in part its natural consequence,
established for years in the minds of a great political party the
notion, — it could hardly be called an opinion, — that paper cur-
rency of any sort is sure to work ruin. Under the domination of
this party the general government in 1846 made specie its only
currency, and left the paper, the currency of the people in three-
quarters of the states, to take care of itself. That this measure for
the protection of the Treasury was judicious, supposing it to be
settled that the paper was to remain free from all control, few are
now disposed to deny ; but it involved an abdication of power
over the part of the circulation which was of immediate importance
to the mass of the community, and a confession of the insolubility
of a great public question, which hardly has its parallel.

The effect produced on our statesmen by thus drawing a line
which left this whole subject in the exclusive province of state
legislation, was disastrous. From 1846 to 1862 the study or dis-



Online LibraryCharles Franklin DunbarEconomic essays → online text (page 3 of 40)