T. E. Cliffe (Thomas Edward Cliffe) Leslie.

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132 Political Economy in the United States.

it is true, be found of the superior tendency of the first to-
diffuse material prosperity throughout the mass of the people.
Switzerland is, in all its physical conditions, the antithesis to
America : nature has done almost nothing for its inhabitants
beyond the immense service, indeed, of interposing barriers
between them and the armies of emperors and kings ; no road
in it leads to great fortunes. Yet, were the conditions of all
the countries of Europe as prosperous as that of Switzerland, it
may well be that a science of political economy would never
have arisen, because no urgent economic problems would have
pressed for solution. Switzerland, however, has provided only
for its own people. The grand achievement of America is to
have provided for all comers, and to have not only rescued from
destitution no small part of the population of Europe, but
placed them in such affluence that they can endure tariffs which
make them buy the produce of their old countrymen at twice its
natural cost. This, however, is an achievement not of political
institutions but of nature. The maintenance of the American
polity with its equality is, moreover, in a great measure due to
physical causes. The ocean has kept it aloof from the wars of
the Old World, and the configuration of the continent has
maintained a single government. Had it been broken up inta
rival states by deserts and mountain chains, instead of being
united by rich plains and noble rivers, it might have been a
battle-field. Thrones and military and aristocratic orders might
have been founded ; a Latin empire in Mexico would certainly
have arisen ; national debts, war, taxes, and impoverishment,,
would have followed. That the emergence of these phenomena
would have given a stimulus to economic inquiry we have proof,
not only in European history, but in the awakening of tlie
American mind itself to the study of political economy since the
Civil War, with the burdens and difficulties it entailed.

The inhabitants of the New World have been the more
disposed to leave the production of science and literature to the
old, that they get their fruits at less than their cost of production
by importation ; and the absence of a law of international copy-
right has in turn been the more unfavourable to American.

Political Economy in the United States. 133

authorship that the rate of remuneration in other occupations
has been so high. The Pennsylvanian manufacturer complains
that he cannot compete with the cheap labour of England,
though freight is added to the prime cost of every pound of
English produce imported ; yet he is content that the American
author should compete with English books for which neither
producer nor carrier has been paid. A single copy of Mill's
'Principles of Political Economy,' or Bastiat's 'Harmonies
Economiques,' is all the American publisher need buy. No
wonder if American economists should be content to take their
political economy for the most part ready made from Mill and

It would, nevertheless, be an erroneous conclusion that
American political economy has no peculiar features, or that
little is to be learned from its study. Besides the perspicuity
with which its doctrines are set forth, and the novel illustrations
and instances which it affords, it has striking and distinctive
characteristics, an examination of the nature and causes of
which cannot fail to instruct the English economist. The reader
will find in their consideration fresh evidence of the influence,
among other conditions, of the physical geography of a country
on its philosophy.

American economists have, in the first place, been nearly
unanimous in rejecting, or, at least, setting aside as practically
unimportant, the Malthusian doctrine of a tendency of population
to outstrip the means of subsistence. It is controverted or
ignored in all American treatises on the general principles of
economics. It is repudiated alike by protectionists and free-
traders—by Carey, Thompson, Peshine Smith, and Bowen,* the
authors of the chief systematic works on the science which
advocate protection, and by Amasa Walker and Perry, the
writers of the chief text-books in which the freedom of inter-
national trade is supported. Mr. Henry Greorge, the propounder

* Mr. Bowen is in eiTor in asserting, in a recent article in the Xoiih American
Review on ' Malthusianism, Darwinism, and Pessimism,' that for the last thirty
.y«ars English economists have abandoned the Malthusian theory.

134 Political Economy in the United States.

of a new theory of the distribution of wealth, and of the causes
of poverty, is as zealous in antagonism to it as the writers of
American schools, from whom he differs on other fundamental
points. The immense resources of the North American con-
tinent ; the extent of uncultivated land of the highest fertility ;
the constant movement of agriculture to richer instead of to
poorer soils, while the cost of production is further diminished
by invention ; the actual need of a faster increase of population
than the country itself yields ; the rapid improvement in the
condition of a perpetual influx of emigrants, are enough to
account for general scepticism or indifference with respect to the
doctrine of Malthus. A comparison of his chapter on the checks
to population in France, with its actual movement since his
time, shows, indeed, that he much underestimated the force of
the preventive check there under institutions conducive to pro-
vidence ; and among the American-born citizens of the United
States this check is even stronger than in France. It must be
allowed to detract not a little from the practical worth and
lasting fame of his doctrines, that Malthus should have shown
so little insight into the power of institutions to foster either
improvidence or prudence, as to speak of them as in reality light
and superficial in comparison with those deeper-seated causes of
evil which result from the laws of nature and the passions of
mankind. Nevertheless, his fundamental position remains
unshaken, that, given the fecundity or power of increase of
mankind, or the ' potential rate,' as it has been called, of popu-
lation, which he assumed, the numbers of any nation must,
unless restricted by either preventive or positive checks, soon
exceed the means of subsistence. If the ' potential rate ' of
human increase everywhere and always accords with his assump-
tion that it tends to double in every twenty-five years, the
necessity for either positive or preventive restraints to keep
population within the limits of subsistence is incontrovertible.
Both in America and in England the antagonists to Malthus
misapprehend the doctrine they combat, when they point to an
actual increase of wealth as well as of population even in old.

PoUticcd Economy in the United States. 135

In neither England nor France has population advanced at
the assumed * potential rate ; ' it has everywhere been restrained
by preventive or positive checks, or by both. But the question
follows — Is the potential rate always and everywhere what
Malthus supposed ? Does it really remain constant, as he
assumed ?

Mr. Amasa Walker has adduced the following statistics of
the proportion of births among American-born and immigrant
inhabitants of the State of Massachusetts, merely with the view
of proving the strength of the preventive check in a highly
civilized and prosperous community, but they suggest something
more : —

Native population, 970,952

Foreign, 260,114

Number of births in native population, . 16,672

,, ,, foreign ,, . . 16,138

The number of births in the native population, as he
observes, to be in proportion to the foreign, should have been
60,289, or nearly four times the actual number. ' The grand
cause for this remarkable difference,' according to Mr. Walker,
' is to be found in the fact that the foreign population are far
less influenced by prudential considerations and social restraint.'
They therefore enter the marriage state with less regard to
their ability to support a family respectably. ' On the other
hand, the resistance to marriage from a more costly style of
living is constantly increasing with the native population,
among whom the standard of family expenditure rises rapidly
with the finer culture, the more elegant arts, and the greater
social vivacity of each new year.'* In support of this view the
author adds statistics showing that the number of marriages in
proportion to population is twice as great among the immigrant
as among the American-born inhabitants of Massachusetts.
But the proportion of births has been seen to be not twice only
but four times as great. Such a decline of births seems to
indicate something more than an increased force of the pruden-

T/ie Science of Wealth, By Amasa Walker. 7th ud., p. 463.

136 Political Economy in the United States.

tial check since Frauklin said, * Marriages in America are more
general and more generally early than in Europe ; and if in
Europe they have but four births to a marriage, we may here
reckon eight.' Mr. Walker himself suggests that one cause
of the difference is, that ' the foreign population is engaged
somewhat less than the native at indoor and sedentary employ-
ments, and in so far are likely to be more vigorous.'* He
furnishes statistics, too, which prove that the mortality is con-
siderably greater, and the longevity less, among the American-
born than among the foreign inhabitants. When to this we
add the vastly greater proportion of diseases of the digestive
organs in the United States than in Great Britain, f the
premature fading of American women, and what dentists report
of the frailty of American teeth, the conclusion seems inevitable
that a decline in vigour and fecundity is one of the causes of the
small families of American-born citizens, and that the ' potential
rate ' of population is not constant, as Malthus supposed. That
climate is not the cause appears from Franklin's statement
quoted above. The climate of Lower Canada is healthier than
that of Massachusetts, but not sufficiently so to account for the dif-
ference in the number of children to a marriage. ' Nous sommes
terribles pour les enfants,' said a French Canadian to Mr. John-
ston, adding that from eight to sixteen are the usual number
of the farmers' families, and naming women who had five-and-
twenty children, and threatened k vingt-sixieine pour le pretre.X
The slow growth of the native population of the Eastern
States of America seems to lend probability to Mr. Herbert
Spencer's doctrine, that the increased cost in nervous structure
and function attending the keener struggle for life, as human
society advances, entails a diminution in fecundity. And
whoever studies Mr. Spencer's arguments, along with facts
which may be learned from English physicians, surgeons, and
dentists, will find ground for surmising that new elements and

* The Science of Wealth. By Amasa Walker. 7th ed., p. 463.
t lS!otes on North-American Agriculture, Economical and Social. By James F. W.
Johnston, ii. 396.
1 Hid., i. 346.

Political Economy in the United States. 137

conditions, which Malthus could not foresee, have begun to
affect the population of Europe itself. A question, indeed,
arises whether Mr. Spencer's view of the matter is not of too
optimist a colour ; and whether the hurry and anxiety of
modern life do not cause more than a mere change in the
direction and use of nervous power, and bring with them a
decline in physical vigour that takes many painful and distress-
ing forms, and is, in truth, a degeneracy of the race. However
this may be, there is much to justify a doubt that Lord
IVfacaulay's prediction will ever be fulfilled, or that American
economists will ever be driven to give the theory of Malthus a
prominent place in their treatises.

A second marked feature of American political economy is
the conspicuousness of a theological element. Mr. Buckle
affirmed that in England political philosophy v/as finally
separated from theology before the end of the eighteenth
century ; and Dr. Roscher speaks of German political economy
as having disengaged itself from religion and become an
independent science a century earlier. Neither proposition is
strictly accurate ; but neither German nor English writers on
the science have incorporated theology with it, as American
economists have habitually done. The assumption of an in-
visible hand, directing to the general good the efforts of
individuals seeking their own gain, appears only in a single
passage of the ' Wealth of Nations,' and Adam Smith's
economic philosophy could stand without it. He never used
his conception of the character and designs of the Deity as a
premiss from which to deduce conclusions or laws. Archbishop
AVhately is the only modern English writer of eminence who
has imported theological conceptions into economic discussions :
be was a digressive writer, and his introduction of theology is
clearly a digression. Of Continental economists, Bastiat is the
one in whom the religious element is most prominent ; but with
him, too, it comes in as an inference, not as a major premiss.
The harmony of the economic interests of mankind is not
deduced from the beneficence of the Euler of the Universe, but
inferred from economic facts, and api^lied to confirm the belief

138 Political Economy in the United States.

in such a ruler. In American treatises, on the other hand,.
theology becomes the backbone of economic science. Assump-
tions respecting the Divine will and designs are employed by
both protectionists and free-traders in support of their theories.
The Malthusian theory is controverted as atheistic in tendency,
and contrary to the commandment to replenish the earth. Mr.
Perry announces at the beginning of his ' Elements of Political
Economy,' which has reached a fourteenth edition, that one of
his main purposes is ' an examination of the providential
arrangements, physical and social, by which it appears that
exchanges were designed by Grod for the welfare of men.' He
bases his theory of value and rent on the proposition that ' God
is a giver, and not a seller,' and that ' value has its origin, not
in what Grod has done, but in what man has done.' Children
used to have a way of classing books as ' Sunday' or ' week-
day books ' by looking over the leaves for sacred names.
According to this criterion several American treatises on political
economy would be set apart as Sunday books. See, for instance,.
Mr. Perry's ' Elements of Political Economy, pp. 2, 63-5, 131,
238-41 ; and his ' Introduction to Political Economy,' pp. 29,.
73-5, 152, 203.

One cause of this characteristic is the religious origin of the
chief American colonies, and the traditional influence of theolo-
gical tenets over American thought on which M. de Tocqueville-
lays stress.* The chief American colleges in the Eastern States
were, moreover, founded for sectarian purposes, and their
original design still exercises a considerable though a declining
influence over their systems of instruction and philosoj)hy. At
Yale College an attempt was made last year to stop the Professor
of Social Science, Mr. "W. Gr. Sumner, whose name is honourably
known in this country as well as in his own, from making use
of Herbert Spencer's works, and the matter is not yet settled.
Down to recent time, also, the lecturers on political economy in
American Colleges were for the most part, as many of them still
are, ministers of ^religion. This circumstance is itself connected

* Be la Democratie en Amerique, iii. 10, 11.

Political Economy in the United States. 139

with a more general cause ; for political philosophy has been
left to a theological class, who have worked their professional
ideas into it, because the laity were engaged in more lucrative
pursuits. Again, the prosperity of the American people, and
the bountiful aid which human effort receives from nature, are
more in harmony than the general condition of European society
with assumptions of beneficent design in the arrangements of
the economic world. Sentiment has undergone a great change
in modern times in relation to this point. In the Middle Ages
pain, privation, and poverty were regarded as pleasing to God,
and the idea lingered long afterwards. Lord Bacon speaks of
times of peace and prosperity as inclining to atheism, ' For
troubles and adversities do more bow men's minds to religion.'
The feelings of our own day are becoming more and more
adverse to such a conception. Mr. Mill's essays on religion
leave little room for doubt that had all mankind been as happily
circumstanced as the people of the United States, he would have
been a confirmed theist. An example of the mixture of national
pride in the prosperity of the United States with thankfulness
to heaven on the part of its citizens that they are not as other
men are, appears in the Secretary of State's letter accompanying
the reports of the United States consuls, in 1879, on the ' State
of Labour in Europe ' : ' No American labourer or capitalist,'
says Mr. Evarts, * can read their reports without a feeling of the
utmost commiseration for the toiling millions of Europe, and
heartfelt pride in and appreciation of the blessings which heaven
has vouchsafed to the people of the United States.'

A third characteristic of American political economy is the
absence of long chains of deduction, such as English economists
have affected, from the assumption that competition equalizes
the wages of labourers and the profits of capitalists in different
occupations and localities throughout a country. A priori one
might naturally have anticipated, from the mobility of labour
and capital in the United States, that the doctrine of the
dependence of prices on cost of production, by reason of the
equality of the gains of equal efforts and sacrifices, would have
been pushed to its farthest point there. It has been, on the

140 Political Economy in the United States.

contrary, rejected by some American economists, ignored by
others, or greatly qualified, and by none made the foundation of
a great superstructure of theory ; and two causes seem to have
contributed to this : — First, the rapid invention and change in
the processes of American industry ; for only in a stationary
condition of the industrial arts could the value of commodities
really depend on their original cost. Secondly, the fluctuation
in prices, and the palpable deviation from first cost, resulting
from speculation, the manipulation of dealers, and the local
variations of demand and supply within the vast area over
which American business is carried on. ' The extraordinary
fluctuations of the grain and flour market in this country,' says
Mr. Bowen, ' American Political Economy,' p. 212, ' are so
great as to put all calculations at defiance, and to make the
gains of dealers nearly as uncertain as a lottery.' And Messrs.
Read and Pell observe in their recent report, ' When we quitted
America wheat was l^d. per bushel cheaper at Liverpool than
New York ; and wheat of tlie same quality was worth almost
as much at Chicago, 900 miles from the seaboard.'

A fourth distinguishing feature of the development of
Political Economy in the United States is the systematic
teaching of protectionism in colleges and text-books as a
scientific doctrine. In the United Kingdom only a single
professor of the science — the late Isaac Butt, who for a time
held the chair of Political Economy in the University of
Dublin — has shown any leaning towards protection. In
Germany Dr. Schmoller, Professor in the University of Stras-
burg, supports the present protective tariff, and has some
followers. But no regular text-book of the principles of
political economy, advocating protection, so far as the present
writer is aware, has been published in any country in Europe.
In the United States, on the other hand, protection is set forth
in formal economic text-books — for example, the treatises of
Carey, Thompson, Peshine Smith, Bowen, and Wilson — and
taught by the professors of several colleges. Mr. Perry, though
himself a zealous advocate of the freedom of trade, in his
' Elements of Political Economy,' describes American economists

Political Economy in tJie United States. Ill

as falling for the most part into two groups : — ' First, those
modelled mainly after the ideas of Adam Smith ; and, secondl j,
those modelled mainly after the ideas of Henry C. Carey ; '
thus recognising the system of Carey and his followers as tliat
of a school of economists. No supporter of free trade, indeed,
could be appointed to a chair, or get a class of students, in
Pennsylvania. In the other colleges the lecturers in political
economy are generally on the side of free trade, yet notable
exceptions may be found. In Harvard College Mr. Bowen's
chair included economics when his 'American Political Economy'
was published, in 1870. The chair has since been divided, it
has been said, in consequence of Mr. Bowen's strong protectionist
bias ; but his successor in respect of economic functions, Mr. C.
Dunbar, is reported to be a mild protectionist, though no
indication of this appears in the essay above referred to, but
only an objection to sudden and violent alterations in tariffs.
At Cornell University, Dr. Wilson, who lectures on economic
science, has published a manual which shows him to be a
protectionist. Physical and political conditions have combined
in America to evoke a development of protectionist doctrine.
The chief obstacle the manufacturer there has had to combat, in
competing with England, has been the superiority of his own
country in some of the natural elements of wealth — land and
its products, cereals, cotton, tobacco, and the precious metals —
creating a scale of wages much above the English rate, and
raising the cost of production in industries in which the natural
advantages are not so great. The best economy, of course,
would have been for American capital to confine itself to the
fields in which it had superior productiveness, awaiting a rise of
wages and in the cost of coal-mining in England for competition
in others. But in some States, Pennsylvania especially, there
were rich coal-beds and iron ores ; and the owners of these and
the capitalists at their side were naturally impatient for an
earlier harvest, in reaping which, moreover, they could not, like
the English protectionists, be charged with taxing the food of
the labourer. The antagonistic feeling towards England of a
large section of the Kepublican party concurred to favour

142 Political Economij in the United States.

protection. But instead of taking sulk at political economy
and turning his back on it, as the English protectionist did, the
shrewder American sought a political economy on his own side,
advocating a development of all the national resources ; and
authors and lecturers were soon forthcoming to supply the
demand for economic science of this sort.

The professors of political economy in the United States,
elsewhere than in Pennsylvania, are, however, for the most part,
on the side of free trade. And when it is borne in mind that
each of the thirty-six States in the Union has from one to five
or six universities or colleges — ' university ' in the United States
means no more than ' college,' and is only regarded as a somevirhat
finer name — and that there are 287 such universities or colleges,
the importance of a decisive predominance of free trade doctrine
in academic lectures and instruction is undeniable. Its signifi-
cance ought not, however, to be overrated. Even in England
it was not philosophers and professors, but manufacturers and
politicians, who carried free trade : in America the manufacturers
and most energetic politicians are against it, and can point to a
so-called national system of political economy on their side,
while the opposite system labours under the suspicions attaching
to a foreign origin.

Economic theories and systems may be regarded in several
different lights : (I) in reference to their causes, as the products
of particular social, political, and physical conditions of thought ;
(2) in reference to their truth or error ; (3) as factors in the
formation of public opinion and policy. It is chiefly from the
first of these points of view that American political economy
has been considered in this essay ; but the other aspects of the
subject ought not to be altogether overlooked. The chief
different schools of economic doctrine in the United States

Online LibraryT. E. Cliffe (Thomas Edward Cliffe) LeslieEssays in political economy → online text (page 13 of 41)