Last month I posted a large article on American School Economist Henry C. Carey, The only economists who ever created a national economy. The article was drawn almost entirely from the 1965 Pulitzer Prize winning history book, The Greenback Era: A Social and Political History of American Finance, 1865-1879, by Irwin Unger (Princeton University Press, 1964). One of the most intriguing references cited by Unger was R.L. Bruckberger.

Raymond Léopold Bruckberger was a French priest of the Dominican order. At the beginning of World War Two he requested the order allow him to join a combat unit, and served in the French mountain light infantry and commandos. After the collapse of the French army, Bruckberger became chaplain general of the French Resistance. He was awarded the Croix de Guerre and the medal of the Legion of Honor for his role in the Resistance. After the war, he lived eight years in the United States, researching and writing his book Image of America, published by Viking Press in 1959. Prominent American historian Arthur Schlesinger Jr. wrote a front-page review of the book for the New York Times Book Review, comparing Bruckberger to Alexis de Tocqueville.

One chapter of his book focuses on American School economist Henry C. Carey, and is entitled, "The Only American Economist of Importance" The title is taken from a 5 March 1852 letter by Karl Marx and Friedrich Engels, in which they wrote that Carey is “the only American economist of importance.”

Bruckberger inlcuded some excerpts from Carey that directly assault the key tenets of conservative, libertarian, and neoliberal economic thought. And, of course, Bruckberger frames Carey’s economic thought as being distinct from, and hostile to, today’s economic thought dominated by the British school. Contrast Carey’s belief that man’s struggle to master nature necessitates the creation of a cooperative society, with neoliberals' belief  (as per Margaret Thatcher) that “there is no society.”, only a never ending struggle of personal interests mediated by the working of markets. Carey’s belief also foreshadows Veblen’s analysis of the need for organized cooperation in the industrial processes of production. And Carey's analysis of humanity's struggle to master nature reinforces the point I have made in the past that the most important economic activity a society undertakes in the creation and dissemination of new scientific and technological knowledge. In The Higgs boson and the purpose of a republic (July 2014), I wrote:

....what is wealth? Is it really hoards of cash, or stockpiles of precious metals? Consider: Why do we have computers now, when there were none 200 or 500 or more years ago? Certainly, 500 years ago, all the raw materials that go into making a computer were available. There was lots of silicon laying around, and there was a lot of petroleum, with which to make plastics, sitting in the ground. There was the same presence of germanium and silver, and copper, and whatever else is needed to make a computer, 500 years ago, as there is today. What is so different today that we can make computers now, but could not 500 years ago? The answer, of course, is knowledge - we first had to develop, acquire, and master, the various facets of science that allowed us to make use of those latent natural resources, then apply that science to actual physical processes of production, or what we call technology. So what wealth really is, is the human power of thinking: reason, investigation, hypothesizing, testing, figuring out why things are the way they are -- and then figuring out how that new knowledge can be used to change the way things are.

In other words, the knowledge required to master nature.

One more note: Bruckberger identifies Carey as a Jeffersonian (there is an article in Bruckberger's book devoted to Jefferson previous to the article on Carey). Since Carey was a foremost advocate for the neomercantalist policies of Hamilton—a protective tariff, a national banking system, and massive government investments in infrastructure—Carey thus brings together and melds the two contending factions of early American history: Jeffersonian, and Hamiltonian.

Following are excerpts from pages 156-165 of Bruckberger's Image of America. At the end of this post are more results of an index search in economics textbooks.

From Bruckberger, Image of America. 

And now, what is political economy? What is its aim? This is how Adam Smith, revered patriarch of capitalism, defined it: "The great object of the political economy of every country is to increase the riches and power of that country.” No definition could be more clearly expressed. To me it is strictly nationalist and imperialist…. It should be added that Smith was something of a humanitarian and that he actually did seek the welfare of the workers. This may be the very reason why Carey never attacked Smith, though he was pitiless in his criticisms of Ricardo, Malthus, and the other theoreticians of capitalism. But in Smith's mind, the logic of his system conflicted with his humanitarian ideas, and so in the end, once again, a rigid system was to triumph over good intentions. [1]

Let us now look for a moment at Carey's concept of political economy… He began by pointing out that man's whole life is "a contest with nature." …what concerned Carey was man's Contest with nature, and his dominion over it, the Imperium Naturae of Francis Bacon.[2] Carey believed that society owed its existence to this contest with nature, since the strength of any one man alone was so disproportionately small that unless he associated himself with his fellow men he was doomed from the start. Nothing could be more real, less abstract, than this association of human beings with one another; it is an association in which men unite their strength for power over nature, and an association encompassing literally not only all the regions of the earth but also all the centuries of man's existence on it. As I roll along in my car, I am inseparable from him who long ago discovered the principle of the wheel; and as I light my pipe, I am still bound to him who once discovered and mastered fire.

The concept of the struggle for power over nature as the goal of mankind can hardly be called original. But where Carey was so characteristically American was in his insistence that this association of men's strength and power had a more distant, loftier aim, a more imperative goal than that of mere power over nature. "The ultimate object of all human effort," wrote Carey, in a truly remarkable statement, "[is] the production of the being known as Man capable of the highest aspirations."

Here Carey took a decisive step of his own. Nowhere in the theoreticians of the capitalist school, nowhere in Marx and Lenin, can any such words as these be found. Basically, all that concerned Carey was man, and the process whereby man becomes more and more civilized. What Carey sought to create, beyond a theory of political economy, was a theory of civilization itself. For him, man was not only greater than the whole of nature, but even above the victory he won over it. With this victory civilization began, but it still had far, far indeed to go. It still faced the obligation to fulfill man's "highest aspirations."

….Carey very clearly saw that neither all the victories over nature nor all the wealth accumulated by toil can avail, unless those victories and that wealth are then put to man's service, for him to use for his own, his human aims. Just as the nature of man is above that of the beasts, so his highest aspirations and his ultimate ends transcend the realm of the material. Man is more important, he has more intrinsic value, than the whole of nature, more even than his dominion over nature, more than society. Carey was a true Jeffersonian.

What Carey could not forgive in the English school of political economy, which after all must historically be called the capitalist school, and what he particularly could not forgive in Ricardo and Malthus, whom Marx so profoundly respected, was that they assigned to civilization the role of pursuing not happiness but wealth and power; that they debased man by directing him toward an aim that was beneath him, since power and physical satisfaction are also the aim of the beast; that they forgot to take man and man's nature into consideration when they established their so-called laws which reduced him to the level of the beast.

…Carey asked, "What then, is wealth everything, and is man absolutely nothing?" And he went on to say, "In the eyes of modern political economy he is nothing, and can be nothing, because it takes no note of the qualities by which he is distinguished from the brute, and is therefore led to regard him as being a mere instrument to be used, by capital to enable its owner to obtain compensation for its use." With this bitter pronouncement Carey was merely recognizing the true significance of capitalism. Here Carey saw eye to eye with Marx. No one who has read Ricardo could fail to agree with them.

While it is a fact that Carey hated England, it would be exceedingly unjust to say that this hatred explains his anti-capitalism. It was his perspicacity that made him anti-capitalist. He saw that, like the physical body, the social body also has maladies that doctors must attend... a disease of the social body which falsifies the aim of economic production by subordinating man to that which he produces, found its theoretical justification in the English capitalist school and has now spread over more than half the face of the earth in that phase of its development known as Marxism. It is immensely to Henry Charles Carey's credit that, in his time, he was shrewd enough to attack this social disease at its focal point. So far as I know, he never mentioned Marx, yet he was undermining Marx's whole position by his constant attacks on the English capitalist school. It would be possible to go on quoting him indefinitely. His life work was actually one long, mercilessly documented and pitilessly honest indictment of the appalling system formulated by the English economists and swallowed hook, line, and sinker by Marx.

Such is the course of modern political economy [wrote Carey], which not only does not "feel the breath of the spirit" but even ignores the existence of the spirit itself, and is therefore found defining what it is pleased to call the natural rate of wages, as being "that price which is necessary to enable the laborers, one with another, to subsist and perpetuate their race without either increase or diminution" (Ricardo)—that is to say, such price as will enable some to grow rich and increase their race, while others perish of hunger, thirst, and exposure. Such are the teachings of a system that has fairly earned the title of the "dismal science."

This American was immeasurably more radical than Marx. He would never have conceded what Marx conceded so readily in his letter to Weydemeyer—"the greatness and the temporary necessity of the bourgeois regime." Carey saw nothing great, nothing even temporarily necessary, in bourgeois capitalism as defined by the English school; he saw it quite simply as a loathsome malady, a social disease to be fought and conquered. And today there is still no other way of refuting communism except by denouncing at the same time the form of capitalism that gave it birth. In Carey's indictment, moreover, there can be detected the first intimations of an original American philosophy of labor and production.

Such being the tendency of all its teachings, it is no matter of surprise that modern English political economy sees in man only an animal that will procreate, that must be fed, and that can be made to work [Carey's emphasis]—an instrument to be used by trade; that it repudiates all the distinctive qualities of man, and limits itself to the consideration of those he holds in common with the beast of burden or of prey; that it denies that the Creator meant that every man should find a place at His table, or that there exists any reason why a poor laborer, able and willing to work, should have any more right to be fed than the cotton-spinner has to find a market for his cloth; or that it assures its students that "labor is a commodity."

….According to classical capitalism, as defined by the English school, the supreme goal on earth is to increase wealth and power continually through the exploitation of natural resources and the subordination of labor and the workers to capital and money. This creates a society of master and slave. History has seen just such a society, which has been historically responsible for repeated and specific crimes at home and in its colonies….

According to Karl Marx, on the other hand, the supreme goal on earth is a harmonious and fraternal City of Man in which men will at last be reconciled to one another. This City of Man will come into being when the Revolution "violently overthrows the old system of production." The role of hero and builder of this Revolution will be played by the proletariat. The proletariat is composed of all the victims of capitalist exploitation. It is under capitalism that the proletariat becomes a class; it is only within the capitalist system that it can exist, and it exists within that system only as "the most suffering class." Marxist revolution is therefore inconceivable except under the capitalist system. Under no other system could it possibly take place. With the coming of the Revolution, the proletariat "destroys at the same time as the system of production, the conditions of class antagonism, it destroys classes in general, and, in so doing, its own domination as a class." At that moment, the harmonious and fraternal City of Man will be achieved.

Historically, however, everything goes to show that Marxism always falls far short of its goal; that it not only never attains its ultimate goal of man's reconciliation with man, but that it creates, by revolution, exactly what it claims to destroy, that is, a new class, which in turn takes possession of the means of production and pitilessly exploits both labor and the workers. Milovan Djilas has made this very plain….

But Carey rejected both the capitalist postulate and its Marxist corollary. He clearly understood the diversity of economic functions, a diversity which becomes greater and greater with the advance and extension of production, and he considered this diversity as necessary to social harmony as the various physiological functions are necessary to health, and in no way conducive to antagonism and class struggle. Refuting Ricardo and Malthus, he proved that it is not only possible but inevitable for the economic conditions of the workers to improve through the dynamic and fertile association of labor and accumulating capital. He thought of labor and capital as existing on the intellectual and spiritual planes as well as on the material plane; he saw them as much in terms of their continuity in time as of their extension in space. The ultimate objective of all human effort, according to Carey, was not just the accumulation of the things of this world, but the achievement of civilization itself, in other words, the creation of a more and more civilized mankind—"the production of the being known as Man capable of the highest aspirations." The one way by which to achieve a higher civilization seemed to him, not by revolution (as in Marx), not by the fierce systematic exploitation of the poor by the rich (as in the capitalist system), but by the association of all men for this common purpose. 

Below are the results of some time spent in the stacks of the library at the University of North Carolina looking through the indexes of introductory economics textbooks. These are the number of pages on which there citations (for exxample, a citation in the index of pp. 145-147, is counted as three pages, not one) of  Henry Carey, Alexander Hamilton, Friedrich List, Thorstein Veblen (American School); Milton Friedman, David Ricardo, Adam Smith (British school), and Karl Marx.

These results clearly show how establishment economics in USA has written Carey out of history. This mutilation of American economic history goes a long way in explaining why American institutions, including the Democratic Party, have repeatedly stumbled and failed to create economic policies that result in widespread general prosperity, the maintenance and improvement of crucial infrastructure, and a mature and determined view of creating a better future including solving the problems of peak oil, environmental destruction, and global climate change.

Joan Robinson and John Eatwell, An Introduction to Modern Economics (McGraw Hill, 1973)
Carey 0
Hamilton 0
Veblen 3
List 1
Friedman 1
Ricardo 18
Smith 20
Marx 28

Lloyd C. Atkinson, Economics: The Science of Choice (Richard D. Irwin, 1982)
Carey 0
Hamilton 0
Veblen 0
List 0
Friedman 4
Ricardo 0
Smith 3
Marx 0

Allen W. Smith, Understanding Economics (Random House, 1986)
Carey 0
Hamilton 0
Veblen 0
List 0
Friedman 1
Ricardo 0
Smith 4
Marx 3

Roger N. Waud, Economics, 3rd Edition (Harper and Row, 1986)
Carey 0
Hamilton 0
Veblen 0
List 0
Friedman 9
Ricardo 6
Smith 5
Marx 7

Bradley R. Schiller, The Economy Today, 4th Edition (Random House, 1989)
Carey 0
Hamilton 0
Veblen 0
List 0
Friedman 6
Ricardo 3
Smith 3
Marx 6

William J. Baumol and Alan S. Blinder, Economics: Principles and Policy, 5th Edition (Harcourt Brace Jovanovitch, 1991)
Carey 0
Hamilton 0
Veblen 0
List 0
Friedman 5
Ricardo 5
Smith 13
Marx 7

Paul A. Samuelson and William D. Nordhaus, Economics (McGraw Hill, 1995)
Carey 0
Hamilton 4
Veblen 0
List 0
Friedman 5
Ricardo 2
Smith 8
Marx 2 (plus 2 on "Marxism")

Robert J. Barro, Macroeconomics (MIT Press, 1997)
Carey 0
Hamilton 0
List 0
Veblen 0
Friedman 9
Ricardo 0
Smith 0
Marx 0

Julian L. Simon, Economics Against the Grain, Volume 2 (Edward Elgar, 1998)
Carey 0
Hamilton 1
Veblen 0
List 0
Friedman 5
Ricardo 3
Smith 11
Marx 1

Frank Stilwell, Political Economy: The Contest of Economic Ideas (Oxford University Press, 2006)
Carey 0
Hamilton 0
Veblen 11
List 1
Friedman 9
Ricardo 12
Smith 16
Marx 19

N. Gregory Mankiw, Principles of Economics, Instructor’s Edition, Sixth Edition (Southwestern, 2012)
Carey 0
Hamilton 0
Veblen 0
List 0
Friedman 9
Ricardo 1
Smith 9
Marx 0

It would be very useful if any of our readers in other countries such as India and China, would report on the results of a search through the indexes of the economics textbooks of their countries. Also, if there are any suggestions of economists that should be added to this list. I think it would be useful to add John Kenneth Galbraith for the American School, and Friedrich von Hayek, and Ludwig von Mises for the Austrian School. I must frankly confess to not knowing who are considered the leading economists in other countries outside the Anglo-American sphere.

[1] I have noted that the mercantilism of the new American republic was distinguished from the mercantilism of the monarchies and oligarchies of Europe by the Constitutional mandate to promote the General Welfare. See my Introduction to my abridged and annotated edition of The Power to Govern: Then and Now.

[2] Some readers may recoil from the idea of man's dominion over nature. But Bruckberger refers to Bacon's Imperium Naturae, which is a quite different understanding of man's relationship to nature: dominion is not domination. Eleonora Montuschi, in a relatively short pdf document available online, Order of man, order of nature: Francis Bacon’s idea of a ‘dominion’ over nature explains that for Bacon,

the learning of both practical and abstract matters must be conceived of as useful tools for human action and human redemption... Far from pursuing his aims for lucre or profession, ornament or personal ambition, a man of knowledge sees in science an opportunity both to improve human condition and to get mankind closer to God. The new science, which ought to combine knowledge and action, must be looked at, in Bacon’s own words, as ‘a rich storehouse for the glory of God and the good of humanity.’

Montuschi explains that Bacon's view was typical of his time, and while it was intricately bound up with Christian humanism, its root trace back to "Plato, and then Cicero and Plutarch."

....in order to restore what man sinfully lost [original sin] a pursuit of good and pure knowledge must once more come to the rescue. A philanthropic advancement of learning becomes the means of man’s redemption, the only chance of salvation for mankind. This view was common currency in the 16th and 17th centuries: the joint pursuit of goodness and usefulness were developed, especially by the humanists, within disciplines such as ethics, theology and the law the true and lawful goal of the sciences is none other than this: that human life be endowed with new discoveries and powers."

As Bernard Bailyn (The Ideological Origins of the American Revolution, Harvard University Press, 1967; awarded the Pulitzer Prize and the Bancroft Prize in 1968); Gordon S. Wood (The Creation of the American Republic, 1776-1787, University of North Carolina Press, 1969; awarded the 1970 Bancroft Prize; and J.G.A.. Pocock (The Machiavellian Moment: Florentine Political Thought and the Atlantic Republican Tradition, Princeton University Press, 1975); and other historians have shown, the framers of the Constitution were very familiar with these thinkers and concepts. Remember: this was an intellectual tradition which included church canon law that held usurers could be put to death. Obviously, something changed. Had this intellectual tradition not been debased and nullified by the rise of capitalism, such canon law would be a very serious hindrance to operations of Wall Street and the City of London, to put it mildly.

A couple months ago, I found online a very useful graphic of the major schools of economic thought. Take a look at it, with this question in mind: Have any of the schools of economic thought shown in the graphic actually resulted in creating a functioning national economy with a large degree of general prosperity and political freedom?

An honest, historically informed answer completely contradicts the libertarian / conservative / neoliberal hero-worship of Adam Smith. The original graphic was posted in April 2014. Four months later, the author posted a revised graphic. Note the major addition in the bottom left corner of the revised graphic: the American School of Alexander Hamilton, Henry C. Carey, and Friedrich List.
It is a very welcome addition, because the American School is the only school of economic thought that has resulted in creating a functioning national economy.

In December 1993, James Fallows rattled the economics profession with an article in The Atlantic, How the World Works:

The more I had heard about List in the preceding five years, from economists in Seoul and Osaka and Tokyo, the more I had wondered why I had virtually never heard of him while studying economics in England and the United States. 

Fallows goes on to describe the historical importance, not of British opium-trade apologist Adam Smith, but of the American School, in guiding the early industrial development of Tokugawa Japan, late imperial China, czarist Russia, Germany, South Korea, and other countries.

In a nutshell, the American School is the only body of economic thought which has actually resulted in national industrial development along with a large degree of general prosperity and political freedom. A partial exception is Marx, but, as Lawrence Goodwyn, the late historian of the American agrarian revolt and populist movement of the late 1800s, pointed out, no system of Marxism has been implemented without the coercive power of a red army behind it.

So why haven’t you ever heard of Henry C. Carey and Friedrich List, two of the most famous economists of the mid-nineteenth-century? They, and the American School, have simply been written out of the economics textbooks. Did you take an economics course in college, and do you still have the textbook around somewhere? Please, look in the index and see how many references there are to Henry Carey. Or to Alexander Hamilton, who, after all, is the person who designed the foundations of the USA economy—which certainly has to rank among the greatest achievements of the past millennium.  Compare what you find with the number of references to Adam Smith, or Milton Friedman.


As part of an inquiry into insurgent political movements, I have been reading a book, The Greenback Era: A Social and Political History of American Finance, 1865-1879, by Irwin Unger (Princeton University Press, 1964), which was awarded the Pulitizer Prize for History in 1965. Near the beginning of the book, Unger provides a dozen or so page summary of Carey and his economic thought. This is what inspired me to post this story, and most of the following material is taken from Unger, who writes that Henry Carey was

...a social thinker who had bent the Jacksonian producer ethic to Whiggish ends…. The essence of the ‘American School’ of political economy that Carey created… was the harmony of all ‘producing’ economic groups in America—agricultural, wage earning, and industrial. He denied the ‘wages fund’ theory of the Classical Economists which pitted laborer against employer, and also questioned the relevance to America of Ricardian rent theory…. 

Carey’s rejection of the “wages fund” theory would be vindicated by Henry Ford’s theory of paying his auto workers enough that they could buy the cars they built, and by the Treaty of Detroit negotiated by Walter Reuther and the United Auto Workers with General Motors in 1950. I would also note something Unger does not: the uniquely American Doctrine of High Wages, which sharply distinguished the USA from European economies through most of the nineteenth century.
Unger continues:

In America, with its abundant land and untapped resources, there was a community of interests among all the producing classes, and it followed that domestic industrial growth—which [Carey] saw as the country’s most pressing need—was not in the interests of manufacturers alone. Like Hamilton before him, Carey argued that a protective tariff would benefit farmers and laborers as well as manufacturers, and confer a general boon on the nation.

Carey’s argument was that excluding foreign manufactures would compel a home market, in which “the anvil and the loom take their place next to the plough and the harrow,” thus producing a market for the bounty of the soil immediately next to where that bounty was produced. And, indeed, by the middle of the nineteenth century, the village blacksmith had become a fixture in every American village and town.

Production of heavy machinery was originally limited to the fall line of the rivers in New England, because that was where reliable water power could be obtained. But by the end of the century, with water power supplanted by steam power, and electricity beginning to become a major power source, almost every large town and city hosted a manufacturer of steam engines, lathes, milling machines, and other machine tools. By the end of the nineteenth century, the manufacture of lathes had spread to:
American Turret Lathe Co., Warren, PA;
Baird Machinery Co., Pittsburgh, PA;
Bardons & Oliver, Cleveland, OH;
Barnes Drill Co., Rockford, IL;
Bradford Machine Tool Co., Cincinnati, OH;
Cairo Machine Works, Cairo, IL;
Elgin Tool Works, Elgin, IL;
Grant Tool Co., Franklin, PA;
Hamilton Machine Tool Co., Hamilton, OH;
Hardinge Brothers,Chicago, IL;
Henley Machine Tool Works, Richmond, IN;
Lodge & Shipley Machine Tool Co., Cincinnati, OH;
Charles A. Mann, Providence, RI;
Milwaukee Machine Tool Co., Milwaukee, WI;
Monarch Machine Co., Sidney, OH;
Niles Tool Works, Hamilton, OH;
San Francisco Tool Co., San Francisco, CA;
Schumacher & Boye, Cincinnati, OH;
Sebastian Lathe Co., Cincinnati, OH;
Shepard Lathe Co., Cincinnati, OH;
Universal Radial Drill Co., Cincinnati, OH;
Von Wyck Machine Tool Co., Cincinnati, OH;
Warner & Swasey Co., Cleveland, OH;
Waterbury Farrel Foundry & Machine Co., Waterbury, CT;
Wight & Powell, Worcester, MA;
Willard Machine & Tool Co., Cincinnati, OH

Planers and shapers were being manufactured by
Cincinnati Planer Co., Cincinnati, OH;
Cincinnati Shaper Co., Cincinnati, OH;
Cleveland Planer Works, Cleveland, OH;
Davis & Egan Machine Tool Co., Cincinnati, OH;
Detrick & Harvey Machine Co., Baltimore, MD;
Durkee & Keefer, Chicago, IL;
Fox Machine Co., Grand Rapids, MI;
Rockford Machine Tool Co., Rockford, IL;
Steptoe Shaper Co., Cincinnati, OH;
Totten & Hogg Iron and Steel Foundry Co., Pittsburgh, PA;
Union Iron Works, San Francisco, CA.

(See the lists of manufacturers in Kenneth L. Cope, Makers of American Machinist's Tools: An Illustrated Directory of Patents, (Astragal Press, 1993); Cope, American Lathe Builders: 1810-1910 (Astragal Press, 2001); Cope, American Planer, Shaper, and Slotter Builders, 1830-1910 (Astragal Press, 2002); Cope, Carriage and Wagon Makers' Machinery and Tools (Astragal Press, 2004); and Cope, American Steam Engine Builders 1800-1900, (Astragal Press, 2006).)

The manufacture of steam engines and boilers was even more dispersed, with a higher proportion located in what were considered the western states in the mid-1800s. A list of manufacturers of farm steam traction engines, 1870-1920, and their locations, would no doubt delight Carey:
Ames Engine Works, Indianapolis, IN;
Atlas Engine Works, Indianapolis, IN;
Aultman Engine and Thresher Co., Canton, OH;
Aultman and Taylor Machinery Co.; Mansfield, OH;
Avery Co., Peoria, IL;
A.D. Baker Co., Swanton, OH;
Banting Manufacturing Co., Toledo, OH;
Best Manufacturing Co., San Leandro, CA;
Fairbanks Steam Shovel Co., Marion, OH;
A.B. Farquhar Co., York, PA;
Ferdinand Machine Co., Ferdinand, IN;
Frick Co., Waynesboro, PA;
Gaar Scott Co., Richmond, IN;
Geiser Co., Waynesboro, PA;
Harrison Machine Works, Belleville, IL;
Heilman Machine Works, Evansville, IN;
Holt Manufacturing Co., Stockton, CA;
Illinois Thresher Co., Sycamore, IL;
Byron Jackson Machine Works, San Francisco, CA;
Keck-Gonnerman Co., Mt. Verson, IN;
O.S. Kelley Manufacturing Co., Iowa City, IA;
Merritt & Kellogg, Battle Creek, Mich.;
Minneapolis Threshing Machine Co., Hopkins, Minn.;
Port Huron Engine and Thresher Co., Port Huron, Mich.;
Reeves and Co., Columbus, OH;
Roberts and Doan, Sacramento, CA;
M. Rumely Co., La Porte, IN;
A.W. Stevens Co., Marinette, Wisc.;
Wood Brothers Thresher Co., Des Moines, Iowa.

(Reynold M. Wik, Steam Power on the American Farm,  University of Pennsylvania Press, 1949, Appendix “Farm Steam Traction Engines Manufactured in the United States and Canada, 1870-1920,” pages 254-255. The complete list runs to 65 companies. Wik compiled another list, “Manufacturers of Portable Farm Steam Traction Engines in the United States and Canada, 1849-1915,” which includes 108 companies.)

Unger notes that Carey’s rejection of Ricardian rent theory meant that the landlord was not necessarily “a grasping villain.” Moreover, Carey’s political economy “contained none of the Jacksonian passion for the economic underdog,” which makes me wonder if Unger had actually read Carey’s Harmony of Interests, and its exquisite denunciations of the immiseration of  Ireland and India caused by the free trade economic policies of British imperial rule. But there was a “social enemy” in Carey’s schema (pages 51 and 52):

The scarcity of capital… made interest high and directed Carey’s fire against the ‘money lenders.’ This assault had a Jacksonian ring, but it was not Agrarian. The money lenders were primarily enemies not of the poor but of ‘productive’ capital. The high cost of borrowing money, Carey wrote before the [Civil] War, ‘causes a deduction from the profits of the trader, from the rents of houses, from the freight of ships. The owner of money, then, profits at the expense of all other capitalists.’ In America, where land was plentiful and financial institutions rudimentary, the money lender was the chief danger to productive endeavor.

This attack on the money lender contains the germ of Carey’s specific financial doctrines. Having rejected the Classicial Economists’ free trade dogmas, he also rejected their monetary and capital theories. In words that echo the doctrines of his seventeenth and eighteenth-century mercantilist predecessors, Carey declared money to be a part of "capital" and its scarcity the cause of high interest rates. In the American West, he noted, interest charges were prohibitive "because money—the thing for which alone interest is paid—is scarce.

In the terms of his time, Carey was in favor of “free banking,” which meant an expandable state banking system which could readily add more banks and bank notes when more money was needed. This was in opposition to Andrew Jackson’s and Thomas Hart Benson’s “simple minded bullionism.” It took its name from the Free Banking Act enacted in the state of New York in 1838, which made it possible to incorporate a bank under general incorporation laws, instead of specific charters granted by the state legislature. Carey and other Whigs viewed free banking as a way to prevent the monopolization of money and credit. They were joined in this support of free banking by Democrats who did not accept “the whole package of Jacksonian dogma… many of Jackson’s supporters were closer to the new aggressive thrust of business enterprise than to the bucolic past.” Unger labels this faction “enterpriser-Democrats,” and they would play a significant role after the Civil War in response to the resumption of a hard gold standard in 1874—the focus of Unger’s book. As Unger discusses, Carey would develop into a foremost opponent of resumption. What I think is important to note here, is Carey’s understanding of money and banks, which, again, was quite different than that of Smith, Ricardo, and the British economists.

From this rejection of the Ricardian interest theory flowed Carey's faith in an abundant money stock as a stimulus to the economy. The very essence of prosperity, he believed, was the increase in "societary circulation." In the late 1850's, Carey described the quickening effects of enlarging the coin supply: "The larger the quantity of gold sent to the chief manufacturing centers of the earth the lower will be the rate of interest there—the greater will be the facilities for constructing new roads and mills—and the more rapid those exchanges from hand to hand which constitute commerce and for the making of which money is so absolutely indispensable."

But as early as the 1840's he also recognized the identical effects of a highly developed banking system. Implicitly he accepted the mercantilist concept of banks as long-term lenders to industry, as well as  short-term Ienders to trade. As the wealth of a country grows, coin becomes increasingly less important, and banks and their note deposits take on the function of adding to the circulation. In New England, where banks were plentiful, money was abundant, interest rates low, and general prosperity prevailed. As a good Whig, Carey supported the Bank of the United States against Jacksonian attacks, but he was primarily a free banker and was actually rather suspicious of money monopolies which could restrict circulation. New England, with its virtually free banking, was a model of adequate societary circulation without excess. 

Carey gathered around him a distinguished band of followers, who helped disseminate his neo-mercantilist views. Several of these men—E. Peshine Smith, William Elder, and Stephen Colwell—were trained economists in their own right and before the War helped elaborate the monetary doctrines of the American School. Colwell and Elder, along with Henry Carey Baird, Carey's nephew and intellectual heir, became deeply involved in the postwar financial controversy. But Carey himself was to take the leading role in the postwar years in creating an intellectually respectable soft money philosophy. In February 1865 he began an assault on the doctrines of the bullionists that ended only with his death in 1879 at the age of 86. In the course of these fourteen years he wrote over twenty pamphlets—close to a thousand pages—devoted to the currency question, all reiterating with stubborn insistence the financial ideas which he had developed in his earlier works.

It is largely because of Carey’s influence that most of the businessmen running heavy industry at the beginning of the 1870s would line up against the bankers and financiers in Boston, New York, and Philadelphia on the issue of resumption. How Carey’s influence was spread is an important lesson for political action today, because it is strikingly similar to the lecturing system devised by the Farmers Alliances and the populist movement in the 1870s and 1880s. On pages 54-55, Unger writes:

By 1865 [Carey] had become the chief apologist and unchallenged intellectual spokesman for American heavy industry. His influence was particularly potent among the ironmasters, whose long fight for protection he had come to champion. Carey and Colwell were themselves iron manufacturers, and at the Carey "Vespers"—evenings of talk on economics and politics washed down by good hock—men like ironmaster Joseph Wharton, railroad promoter Thomas A. Scott, manufacturers Robert Patterson and William Sellers, and publisher Henry C. Lea, absorbed the Carey financial philosophy. From Wharton and other Philadelphia iron manufacturers neo-mercantilisrn spread to iron men throughout the country. Daniel Morrell of the Cambria Iron Works and Eber B. Ward, a pioneer western ironmaster, were in close touch with Carey. Morrell, whose iron works at Johnstown were the largest in the country, served two terms in Congress between 1867 and 1871, where he regaled his colleagues with the Carey philosophy. Ward, president of the Iron and Steel Association in the late '60's, was also a disciple and used his great wealth to finance distribution of the Master's monetary writings.
Serving as sounding boards for the Carey coterie were several manufacturers' trade associations. The American Industrial League, launched in 1867, was one of these. The League ostensibly represented all sectors of industry and all sections of the country. Its first president was Peter Cooper, the New York ironmaster and railroad promoter; Ward, a westerner, was a prominent early sponsor.

It is worth stopping here to take special note of Peter Cooper, who was one of the richest, if not the richest, man in USA at this time. Born in 1791, Cooper began his career as an important producer class industrialist in 1821 by buying a glue factory at Kipps Bay in Manhattan. Glue factories often exploded when the glue was heated directly by fire. Cooper solved this problem by inventing a double boiler in which direct fire was used to heat water, and the boiling water was used to heat the glue.

In 1829, Cooper was elected as Councilman of New York, and worked to bring clean water to the city through a long-distance pipe built across the Harlem river. This successful 1835 project was the prototype of New York’s massive water supply system built a few decades later.
Around the same time, Cooper started an business iron in Baltimore. The iron beams Cooper produced were used in the Flatiron Building, the Philadelphia Mint, The Cooper Union, and the US Treasury building.

This was the time when the Baltimore and Ohio Railroad was just getting started, and in 1830 Cooper built and operated the Tom Thumb. This was the first steam locomotive designed and built in America, and it helped convince the company and local citizens that steam locomotives were a practical means of pulling trains. The Baltimore and Ohio Railroad became the first commercially successful railroad in USA.

In 1845, Cooper invented gelatin desert, which we know today as Jell-O.

In 1854, at the age of 65, Peter Cooper began construction of the Cooper Union for the Advancement of Science and Art. He wanted to provide as good an education in engineering and architecture, as The Ecole Polytechnique in Paris, but wanted tuition to be free. He also insisted that Cooper Union welcome progressive thinkers and ideas, and after the Civil War, Clara Barton and Susan B. Anthony had their offices there.

In 1857, Cooper bought control of the North American Telegraph Company, which would eventually become American Telephone and Telegraph, or A T and T. Cooper then played a key role in the design and laying of the first transatlantic cable.

During the Civil War, Peter Cooper was among the first to buy war bonds. More importantly, he supported and promoted the issuance of paper money by the United States Treasury. This broke the stranglehold of the big banks in Boston, New York, and Philadelphia. These currency notes, issued by the national government instead of private banks, became known as Lincoln’s Greenbacks, and made it possible for the Union to pay for winning the war. When these Greenbacks were replaced by the hard money of gold in 1873, farmers and small industrialists around the country suddenly could not get money or credit, and the economy collapsed into a depression. This is the focus of Unger's book.

In 1876, even though he was 85 years old, Peter Cooper, ran for President as the candidate of the new Greenback Party. The policy platform of the insurgent Party called for:

• a return to flexible fiat paper money,
• regulation of Interest rates,
• breaking up industrial and transportation monopolies,
• protective tariffs to help industrial development,
• increased government support for the poor and needy,
• imposing a tax on high incomes,
• an eight hour work day, and
• giving women the right to vote.
• In addition, Cooper revived George Washington's idea that bankers and stock brokers should be excluded from Congress.

Cooper did not win, and millions of people would be forced to suffer through a number of financial crashes and economic depressions. But Cooper and the Greenbackers would be vindicated in the 1930s, when their policies were adopted and implemented by Franklin Roosevelt and the Democratic Party in response to the Great Depression of 1929.

To return to the story of the American Industrial League and how Carey’s ideas were disseminated, Unger notes that there state leagues were created in New York, Ohio, and Michigan, as well as Pennsylvania. In addition, one of the most important USA trade groups, the Iron and Steel Association, became a key Carey organ. Unger writes that Carey was a frequent guest at Association meetings, and the Association’s semi-official publication, The Iron Age, (see picture at the top of this story), featured Carey, Colwell, and Smith, as "special contributors" to Iron Age in the 1860s. In the 1870s, Carey did not write for The Iron Age as often, but “his influence on the paper's editorial policy continued well into the following decade. John Williams, editor of lron Age, was a Carey disciple and treated his mentor's writings as the Bible of the trade and an absolute guide to economic wisdom.”

November 6, 1860. Abraham Lincoln has been made President by a 39.8 percent plurality of votes. The Democratic Party had split in two over the issue of slavery expansion during its national convention in Charleston, South Carolina in late April. Almost exactly one month after the election, Robert Barnwell Rhett, publisher of the Charleston Mercury and the most open proponent of secession, walked along Meeting Street, almost to the southern tip of the peninsula Charleston is built on. He stopped at a house and knocked on the door. Now that secession was being planned, Rhett had come to talk with the Consul of Great Britain, Robert Bunch, about the “commercial prospects” of the South.

Once the two men had exchanged carefully courteous greetings, Rhett got right to the point.

Rhett asked Bunch how he thought Britain would act if ships arrived in its ports that came from the seceding states but did not have clearances from the customs collectors of the Federal government—assuming, of course, the Federal government didn’t object to their sailing and wasn’t going to “coerce the Seceders back into the Union.”

Rhett had represented South Carolina in the U.S. Senate in the early 1850s, so the British consul addressed Rhett with the honorific. “Is that what you believe will happen, Senator?” Bunch asked. Rhett replied:

“The course most likely to be pursued by the President is that he will not acknowledge the right of a State to secede as an abstract question, but practically, he will not interfere with it for doing so…. Foreign nations would be at perfect liberty to consider secession as an accomplished fact and to use their own discretion as to recognizing or making treaties with the new state.”

Bunch answered that he could not provide an official reply, since her majesty’s government had not yet provided him any instructions on the matter, and in fact had probably not even considered the issue yet. Bunch then slyly provoked Rhett by noting that most foreign governments, including his own, would take their guidance from whatever position the President and the Congress of the United States settled on.

This pushed Rhett to go directly to the heart of the matter, according to Bunch’s biographer:

[Rhett] expected the cottons states to form a Confederacy within the next sixty days, and he wanted to make it clear that “the wishes and hopes of the Southern states centered in England”; that they would prefer an alliance with her to any other power; that they would be their best customer; that free trade would form an integral portion of this scheme of government, with import duties of nominal amount and “direct communication by steam between the Southern and British ports.”

This conversation was communicated by Bunch to his superiors in the Foreign Office in London, and are part of the original documents used and quoted by Bunch’s biographer, Christopher Dickey, in his book, Our Man in Charleston: Britain's Secret Agent in the Civil War South (2015, Broadway Books / Penguin Random House, New York, NY, pages 179-184).

It is becoming a constant struggle to combat despondency, as I watch USA Democratic Party leaders shuck and jive, wriggle and squirm, to avoid having to accept any responsibility for their disastrous and destructive neoliberal economic policies of the past half-century. It's a tragedy having Donald Trump as President, with reactionary Republicans in control of the House and Senate. But having Democrats unwilling to address their own role in creating the widespread misery and discontent that is fueling political populism, thus crippling their ability to oppose Trump and the Republicans, is a catastrophe. Because without the Democratic Party in USA renouncing neoliberalism and putting forward a grand vision for a $100 trillion rebuilding of the world economy to stop global climate change, that political populism has no where to go except to the right.

The origins of the Democratic Party's insouciance today is the Party's response to the Republican victories of 1968 and 1980. The latter was an especially severe blow, because the common wisdom held that the Republican Party was on the verge of extinction because of the Watergate scandal. Democratic control of the Senate with 61 seats, flipped to Republican control of 53 seats. The Democratic majority in the House was reduced from 292 Representatives to 242.

The Democratic Party leadership responded to these electoral disasters by abandoning their traditional alliance with organized labor and beginning to shun the working class--explicitly The future of the Party, they declared, lay in embracing instead the rising new “professional class.” This is abundantly documented by Thomas Frank in his most recent book, Listen Liberal. A shorter summary is by Matt Stoller in The Atlantic this past October, just before the election: How Democrats Lost Their Populist Soul. Summaries of Stoller’s article are available on DailyKos here and here. There are a number of reviews of Frank’s book available with a search of the InterTubez, but I have yet to read one that is a truly adequate summary. The book is just too chock full of details, names, and dates, and it packs a wallop. Anyone still thinking in terms of Hillary versus Bernie should be shamed into silence if they manage to read the entire book. Unfortunately, I think most Hillary partisans will find the book much too painful and discomfiting to read in its entirety.

However, the key to understanding why the embrace of a “post-industrial” new “professional class” was such a disaster eludes both Frank and Stoller. First, no modern economy can ever be truly post-industrial. Modern standards of living would simply collapse without the products of industrial mass production. Just think of what would happen if there were no longer so simple a thing as medicine bottles. How would you store and distribute anti-biotics? Pain relievers? The special medications that today keep hundreds of millions of people alive, who a century or two ago would quickly expire because of their illness or disorder? I’d be willing to bet that without continued production of the trillions of medicine bottles each year, about half the human population would die off within five years. The really sick thing is: there are many so called “liberals” and “progressives” who think such a die off is not such a bad thing.

Second, the embrace of one specific class or another directly violates the republican (small “r”, not Republican Party) political economy of the U.S. republic, which is founded on the Constitutional mandate to promote the General Welfare. It is this Constitutional mandate that sets the USA apart from and above all other governments before it—monarchies, aristocracies, oligarchies, and dictatorships. It is what is supposed to distinguish the USA economy from the mercantalist economies of old Europe: all economic activity is supposed to strengthen not the state and the elites who control it (as was the case with mercantalism), but the entire nation—all the people. (And note that conservative and libertarian scholars explicitly attack the General Welfare principle for being the bedrock of the “nanny state.” The Confederacy that split the Union and fought to preserve slavery copied the U.S. Constitution, but deliberately removed any mention of the General Welfare—and conservative and libertarian scholars have written that this was an “important improvement.”)

This second point also directs us toward the reason why many people make the oversimplified argument that there is no difference between Democrats and Republicans, which is implicit in the results of the Washington Post /ABC News poll conducted in mid-April 2017 which that 67% of Americans think Democrats are out of touch with the concerns of average citizens. Embracing one specific class or another—for the Democrats, the “professional class”; for the Republicans, “entrepreneurs” or “job creators” or whatever—must be accompanied by the belief that the prosperity of that favored class will “trickle down” and “lift all boats.” Broken down in this way, it is easily apparent that Democratic economic policies are not that different from Republican economic policies. The major differences between the two parties is in their approach to how much of a social safety net there should be to alleviate the poverty that inevitably results from deindustrialization and an abandonment of the principle of promoting the General Welfare.