Senator Henry Clay

The American System was the economic philosophy the United States followed from 1861-1913 with little interruption becoming in Woodrow Wilson's terms the "Arsenal of Democracy" and achieving the highest standard of living in the world known as the "American Way".(Gill ix and 39) It is associated in history particularly with Henry Clay who originally advocated it based on Alexander Hamilton's economic principles[1] and was intended to allow the United States to become economically independent and nationally self-sufficient. It is a school of economic thought distinct from both the "British System" of Adam Smith and the "Socialist System" of Karl Marx.[2] The "American System" called for a high tariff to promote and protect industry, support for internal improvements such as road-building and railroads, and a national banking system to encourage productive investments. It has roots in the ideas of Alexander Hamilton[3] and George Washington, was promoted by John Q. Adams and his National Republican Party, and was the antecedent to the policies of Abraham Lincoln and the early Republican Party which implemented the system during the Civil War.[4] From [1], in the public domain This image is in the public domain because its copyright has expired in the United States and those countries with a copyright term of life of the author plus 100 years. ... From [1], in the public domain This image is in the public domain because its copyright has expired in the United States and those countries with a copyright term of life of the author plus 100 years. ... Henry Clay Henry Clay (April 12, 1777 in Hanover County, Virginia, USA – June 29, 1852 in Washington, D.C.) was a leading American statesman and orator who served in both the House of Representatives and Senate. ... Henry Clay Henry Clay (April 12, 1777 in Hanover County, Virginia, USA – June 29, 1852 in Washington, D.C.) was a leading American statesman and orator who served in both the House of Representatives and Senate. ... Adam Smith, FRSE, (baptised June 5, 1723 – July 17, 1790) was a Scottish political economist and moral philosopher. ... Karl Heinrich Marx (May 5, 1818 Trier, Germany – March 14, 1883 London) was an immensely influential German philosopher, political economist, sociologist, and revolutionary. ... A tariff is a tax on imported goods. ... The notion of internal improvements or public works is a concept in economics and politics. ... The term national bank has several meanings: especially in developing countries, a bank owned by the state an ordinary private bank which operates nationally (as opposed to regionally or locally or even internationally) In the past, the term national bank has been used synonymously with central bank, but it is... Alexander Hamilton (January 11, 1755 or 1757 – July 12, 1804) was an American politician, statesman, writer, lawyer, and soldier. ... George Washington (February 22, 1732 – December 14, 1799) was the Commander in Chief of the Continental Army in the American Revolutionary War from 1775 to 1783, and later the first President of the United States, an office to which he was twice elected unanimously (unanimous among the Electoral College) and... Order: 6th President Term of Office: March 4, 1825–March 3, 1829 Preceded by: James Monroe Succeeded by: Andrew Jackson Date of birth: July 11, 1767 Place of birth: Braintree, Massachusetts Date of death: February 23, 1848 Place of death: Washington, D.C. First Lady: Louisa Catherine (Johnson) Adams Political... Abraham Lincoln (February 12, 1809 – April 15, 1865), sometimes called Abe Lincoln and nicknamed the Rail Splitter, Honest Abe and the Great Emancipator, was the 16th President of the United States (1861 to 1865), and the first president from the Republican Party. ... This article is about the modern United States Republican Party. ...

Policies of the American System

The American System included three cardinal points:[5]

• The advocacy of protectionism, and opposition to free trade - particularly for the protection of "infant industries" and those facing import competition from abroad. (See the Tariff of 1816 and Morrill Tariff, which were passed through the efforts of Clay and the early National Republican Party.)
• Government finance of Internal improvements to speed commerce and develop industry. This involved the regulation of privately held infrastructure, to ensure that it meets the nation's needs. (See the Cumberland Road or "National Road" and Pacific Railways Act of Lincoln Administration.) This also involved the selective use of the powers of taxation to promote productive activity over speculation.
• A government sponsored National Bank to issue currency and encourage commerce. This involved the use of sovereign powers for the regulation of credit to encourage the development of the economy, and to deter speculation. (See the First Bank of the United States, Second Bank of the United States, and National Banking Act which were insisted upon by Hamilton, Clay, and Lincoln.)

Congressman Andrew Stewart [6] defined elements of this system clearly in the following extract from his book, "The American System": Protectionism is the economic policy of restraining trade between jurisdictions, through methods such as high tariffs on imported goods, restrictive quotas, and anti-dumping measures, in an attempt to protect producers in a particular locale from competition. ... Free trade is an economic concept referring to the selling of products between countries without tariffs or other trade barriers. ... The Tariff of 1816 was put in place after the War of 1812, Britain had developed a large stockpile of goods, such as iron and textile. ... The Morrill Tariff of 1861 was a major protectionist tariff bill instituted in the United States. ... The notion of internal improvements or public works is a concept in economics and politics. ... The Cumberland Road, also called the Great National Pike and the National Road, was the first United States federal highway. ... The term national bank has several meanings: especially in developing countries, a bank owned by the state an ordinary private bank which operates nationally (as opposed to regionally or locally or even internationally) In the past, the term national bank has been used synonymously with central bank, but it is... Commerce is the trading of something of value between two entities. ... Credit as a financial term, used in such terms as credit card, refers to the granting of a loan and the creation of debt. ... Speculation involves the buying, holding, and selling of stocks, bonds, commodities, currencies, collectibles, real estate, derivatives or any valuable financial instrument to profit from fluctuations in its price as opposed to buying it for use or for income via methods such as dividends or interest. ... The First Bank of the United States was proposed by Alexander Hamilton to relieve the war debt from the United States Revolutionary War, develop a national currency, and dispose of the western territories. ... The Second Bank of the United States was founded in 1816, five years after the expiration of the First Bank of the United States out of desperation to stabilize the currency. ... The National Banking Act of 1863 raised money for the Union in the United States Civil War by enticing banks to buy federal bonds, and taxed state bonds out of existence. ...

• "Protect and cherish your national industry by a wise system of finance, selecting in the first place those articles which you can and ought to supply to the extent of your own wants-food, clothing, habitation, and defence-and to these give ample and adequate protection, so as to secure at all times an abundant supply at home. Next select the LUXURIES consumed by the rich, and impose on them such duties as the wants of the Government may require for revenue; and then take the necessaries of life consumed by the poor, and articles which we cannot supply, used in our manufactories, and make them free, or subject to the lowest rates of duty." [7]
• "Adopt a system of national improvements, embracing the great rivers, lakes, and main arteries of communication, leaving those of a LOCAL character to the care of the States; and on these expend the surplus revenue only; thus uniting and binding together the distant parts of our common country, and at the same time securing the most efficient system of defence in war, and the cheapest and best system of commercial and social intercourse in peace." [8]
• "Introduce enlightened economy in every branch of the public expenditures. Lighten the burdens, diversify the employments, and secure and increase the rewards of labor in all its departments." [9]
• "In your foreign relations follow the advice of the father of his country-" observe good faith and justice towards all nations-cultivate peace and harmony with all." Thereby illustrating the beauty and perfection of our Republican institutions, holding up a great example of "liberty and independence," for the nations of the earth to admire and imitate." [10]

Henry C. Carey, a leading American economist and adviser to Abraham Lincoln, in his book "Harmony of Interests" displays two additional points of this American System economic philosophy that distinguishes it from the British System of Adam Smith or the Communist System of Karl Marx: The notion of internal improvements or public works is a concept in economics and politics. ... Adam Smith, FRSE, (baptised June 5, 1723 – July 17, 1790) was a Scottish political economist and moral philosopher. ... Karl Heinrich Marx (May 5, 1818 Trier, Germany – March 14, 1883 London) was an immensely influential German philosopher, political economist, sociologist, and revolutionary. ...

• Government support for the development of science and public education through a public 'common' school system and investments in creative research through grants and subsidies.
• Rejection of class struggle, in favor of the "Harmony of Interests" between: owners and workers, farmer and manufacturers, the wealthy class and the working class.

The scope of this article is limited to the empirical sciences. ... Class struggle is class conflict looked at from a Marxist, libertarian socialist, or anarchist perspective. ...

Philosophical basis of the American System

A portrait of Alexander Hamilton by John Trumbull, 1792.

The American System of economics represented the legacy of Alexander Hamilton, who in his Report on Manufactures, argued that the U.S. could not become fully independent until it was self-sufficient in all necessary economic products. Hamilton rooted this economic system, in part, in the successive regimes of Colbert's France and Elizabeth I's England, while rejecting the harsher aspects of mercantilism, such as seeking colonies for markets. As later defined by Senator Henry Clay who became known as the "Father of the American System" because of his impassioned support thereof, the "American System" was to unify the nation north to south, east to west, and city to farmer.[11] A leading proponent and economist of the 19th Century, Henry Carey, called this a "Harmony of Interests" in his book by the same name, a harmony between labor and management, and as well a harmony between agriculture, manufacturing, and merchants. Download high resolution version (868x1224, 303 KB) A portrait of Alexander Hamilton by John Trumbull, 1792. ... Download high resolution version (868x1224, 303 KB) A portrait of Alexander Hamilton by John Trumbull, 1792. ... It has been suggested that Portrait painting be merged into this article or section. ... Alexander Hamilton (January 11, 1755 or 1757 – July 12, 1804) was an American politician, statesman, writer, lawyer, and soldier. ... John Trumbull, 1756–1843 John Trumbull (June 6, 1756–November 10, 1843), was a famous American artist from the time of the American Revolutionary War. ... 1792 was a leap year starting on Sunday (see link for calendar). ... Alexander Hamilton (January 11, 1755 or 1757 – July 12, 1804) was an American politician, statesman, writer, lawyer, and soldier. ... A portrait of Alexander Hamilton by John Trumbull, 1792. ... Jean-Baptiste Colbert. ... Elizabeth I (7 September 1533 – 24 March 1603 ) was Queen of England and Queen of Ireland from 17 November 1558 until her death. ... Royal motto (French): Dieu et mon droit (Translated: God and my right) Englands location (dark green) within the United Kingdom (light green), with the Republic of Ireland (blue) to its west Languages None official English de facto Capital None official London de facto Largest city London Area – Total Ranked... A painting of a French seaport from 1638, at the height of mercantilism. ... Henry Clay Henry Clay (April 12, 1777 in Hanover County, Virginia, USA – June 29, 1852 in Washington, D.C.) was a leading American statesman and orator who served in both the House of Representatives and Senate. ... Henry Charles Carey (December 15, 1793 - October 13, 1879), American economist, was born in Philadelphia. ... Manufacturing is the transformation of raw materials into finished goods for sale, by means of tools and a processing medium, and including all intermediate processes involving the production or finishing of component parts (semi-manufactures). It is a large branch of industry and of secondary production. ... Merchants function as professional traders, dealing in commodities that they do not produce themselves. ...

The opposing view, represented by Thomas Jefferson maintained that the U.S. was morally better off as an agrarian nation with a plantation economy with a weak, small federal government. Thomas Jefferson (April 13, 1743 N.S. – July 4, 1826) was the third President of the United States (1801–1809), principal author of the Declaration of Independence (1776), and one of the most influential founders of the United States. ...

The name, "American System," was coined by Clay to distinguish it, as a school of thought, from the competing theory of economics at the time, the British System represented by Adam Smith in his work Wealth of Nations.[12] In a passage from his book, The Harmony of Interests, Carey wrote concerning the difference between the American System and British System of economics: Adam Smith, FRSE, (baptised June 5, 1723 – July 17, 1790) was a Scottish political economist and moral philosopher. ... An Inquiry into the Nature and Causes of the Wealth of Nations is the magnum opus of Adam Smith, published in 1776. ...

Two systems are before the world;...One looks to increasing the necessity of commerce; the other to increasing the power to maintain it. One looks to underworking the Hindoo, and sinking the rest of the world to his level; the other to raising the standard of man throughout the world to our level. One looks to pauperism, ignorance, depopulation, and barbarism; the other to increasing wealth, comfort, intelligence, combination of action, and civilization. One looks towards universal war; the other towards universal peace. One is the English system; the other we may be proud to call the American system, for it is the only one ever devised the tendency of which was that of ELEVATING while EQUALIZING the condition of man throughout the world.

Historic support base for the American System

President Lincoln

The American System was supported by New England and the Mid-Atlantic, which had a large manufacturing base. It protected their new factories from British or other foreign competition, thus, allowing higher wages and moderately high prices to exist side by side. Image File history File links Download high resolution version (2850x3742, 1215 KB) Description Abraham Lincoln, 16th President of the United States of America. ... Image File history File links Download high resolution version (2850x3742, 1215 KB) Description Abraham Lincoln, 16th President of the United States of America. ... Abraham Lincoln (February 12, 1809 – April 15, 1865), sometimes called Abe Lincoln and nicknamed the Rail Splitter, Honest Abe and the Great Emancipator, was the 16th President of the United States (1861 to 1865), and the first president from the Republican Party. ...

The South, on the other hand, opposed the American System because its plantation owners were heavily reliant on production of cotton for export, using cheap slave labor of African-Americans. These policies produced a feudal Plantation System at odds with the rest of American society. The plantation owners not only feared lower demand for their cotton but the higher costs of manufactured goods. After 1828 the Democrats kept tariffs low. It wasn't until the election of President Abraham Lincoln in 1860 that the American system would be fully enacted with a series of laws (due in part to the lack of Southern opposition) in the government during the American Civil War. For example, the 1861 Morrill Tariff's reached 48% (three tariffs were passed, first two days prior to Lincoln's inauguration, and was signed into law by Buchanan).[13] A plantation is an intentional planting of a crop, on a larger scale, usually for uses other than cereal production or pasture. ... Abraham Lincoln (February 12, 1809 – April 15, 1865), sometimes called Abe Lincoln and nicknamed the Rail Splitter, Honest Abe and the Great Emancipator, was the 16th President of the United States (1861 to 1865), and the first president from the Republican Party. ... Combatants Union (remaining U.S. states) Confederate States of America Commanders Abraham Lincoln† Ulysses S. Grant Jefferson Davis Robert E. Lee Strength 2,200,000 1,064,000 Casualties KIA: 110,000 Total dead: 360,000 Wounded: 275,200 KIA: 94,000 Total dead: 258,000 Wounded: 137,000+  The... The Morrill Tariff of 1861 was a major protectionist tariff bill instituted in the United States. ...

The Radical plan of Reconstruction envisioned extending the American System into the South by building railroads, and by promoting the development of manufacturing there to diversify its economy and unite it with the North's (New England, Mid-Atlantic, Mid-West, and West). This plan failed for various reasons and the South did not industrialize until much later. Reconstruction-era military districts in the South For other uses, see Reconstruction (disambiguation). ...

Republican Party implements the American System

According to an article at US-History.com: "As soon as Lincoln took office, the old Whig coalition finally controlled the entire government. It immediately tripled the average tariff, began to subsidize the construction of a transcontinental railroad in California even though a desperate war was being waged, and on February 25, 1862, the Legal Tender Act empowered the secretary of the treasury to issue paper money ("greenbacks") that were not immediately redeemable in gold or silver."[14]

Below are two extracts from the Republican Party Platform, supporting the policies outlined above of the "American System." [15]

• On a Protective Tariff - 1860 Platform
  • "12. That, while providing revenue for the support of the general government by duties upon imports, sound policy requires such an adjustment of these imports as to encourage the development of the industrial interests of the whole country; and we commend that policy of national exchanges, which secures to the workingmen liberal wages, to agriculture remunerative prices, to mechanics and manufacturers an adequate reward for their skill, labor, and enterprise, and to the nation commercial prosperity and independence." [16]
• On Internal Improvements - 1856 Platform
  • "Resolved, That a railroad to the Pacific Ocean by the most central and practicable route is imperatively demanded by the interests of the whole country, and that the Federal Government ought to render immediate and efficient aid in its construction, and as an auxiliary thereto, to the immediate construction of an emigrant road on the line of the railroad. Resolved, That appropriations by Congress for the improvement of rivers and harbors, of a national character, required for the accommodation and security of our existing commerce, are authorized by the Constitution, and justified by the obligation of the Government to protect the lives and property of its citizens." [17]

In power and without southern opposition, the Republican Party was able to move quickly upon its promised platform planks, rooted in the American System policies of national banking, tariff protection, and internal improvements. In 1861, prior to Lincoln's inauguration, the Morrill Tariff was passed at a rate of 37.5% and then raised during the war to a rate near 48%. In 1862 they successfully passed the Pacific Railways Act, initiating the building of the Union-Pacific Railroad across the continental United States. [18] In 1862 the Legal Tender Act was passed, allowing issuance of "greenbacks," followed by the National Banking Act of 1863 which established the final piece of a three part economic philosophy which Henry Clay termed the "American System". [19] The Morrill Tariff of 1861 was a major protectionist tariff bill instituted in the United States. ...

After ten years of this system the American centennial celebration, celebrated in 1876 in Philadelphia at the Centennial Exposition, was formally opened by President Ulysses S. Grant [20], and served as a showcase for the achievements of the United States[21]. Prominently featured were innovations of science and technology as applied to infrastructure. Among the items on display were the gigantic Corliss Engine developed by George Corliss, and the telephone of Alexander Graham Bell. The centennial was a celebration of American Independence and innovation as well as over ten years of industrial strength under the three policies enacted during Lincoln's administration. Foreign nationals left the exposition with an admiration for the progress America had made since the last such expo in 1851. [22] According to the Free Library of Philadelphia's "Centennial Exhibition" website, "In 1851 America had been embarrassed by its inability to compete on a par with other nations at the Crystal Palace Exhibition. By 1876 foreign visitors were impressed and captivated by American progress and industrial know-how." [23] Philadelphia is a village located in Jefferson County, New York. ... The Centennial International Exhibition of 1876, the first official worlds fair in the United States, was held in Philadelphia, Pennsylvania to celebrate the 100th anniversary of the signing of the Declaration of Independence in Philadelphia. ... Ulysses S. Grant (born Hiram Ulysses Grant, April 27, 1822 – July 23, 1885) was the 18th President of the United States (1869–1877). ... Alexander Graham Bell (March 3, 1847 – August 2, 1922) was a Scottish-born scientist and inventor. ...

American industrialist Andrew Carnegie praised the GOP in 1900 as, "The Party of Protection of American Industries, of Internal Improvements, the Party of the Union, of Emancipation, and of the Highest Standard of Value for the money of the people..."[24] , the Republican Party continued to support national banking, protectionism, and internal improvements well into the Twentieth Century.[25][26] During this time the "American System" was sometimes called by other names, which include: "American Policy", "National System,"[27]""Protective System", "Protection Policy," [28] and "Protectionism", which alludes only to the 'tariff policy' of this system of economics.[29][30][31][32][33] Andrew Carnegie (November 25, 1835 – August 11, 1919) was a Scottish businessman, a major philanthropist, and the founder of the Carnegie Steel Company which later became U.S. Steel. ...

The last two U.S. President's to promote the American System in its original three part form were Theodore Roosevelt and William H. Taft. (Roosevelt and Croly) In 1913 the administration of Woodrow Wilson pressed forward with his New Freedom policy that replaced the National Bank System with the Federal Reserve System, and lowered tariffs to revenue only levels with the Underwood Tariff. The election of Warren G. Harding and the Republican Party in 1920 represented a partial return to the American System through restoration of high tariffs, although a shift away from productive investments into speculation by the Federal Reserve System continued. This speculation lead to the Stock Market Crash on Black Friday in October of 1929. President Herbert Hoover responded to this crash and the subsequent bank failures and unemployment by signing the Smoot-Hawley Tariff, which some economists considered to have deepened the Great Depression, while others disagree. Theodore Roosevelt, Jr. ... William Howard Taft I (September 15, 1857–March 8, 1930) was the 27th President of the United States (1909-1913), and the 10th Chief Justice of the United States (1921 - 1930). ... Thomas Woodrow Wilson (December 28, 1856 – February 3, 1924) was the 28th President of the United States (1913–1921). ... New Freedom is a borough in York County, Pennsylvania. ... Warren Gamaliel Harding (November 2, 1865–August 2, 1923) was an American politician and the 29th President of the United States, serving from 1921 to 1923, when he became the sixth president to die in office. ... The Federal Reserve System is headquartered in the Eccles Building on Constitution Avenue in Washington, DC. The Federal Reserve System (also the Federal Reserve; informally The Fed) is the central bank of the United States. ... Herbert Clark Hoover (August 10, 1874 – October 20, 1964), the 31st President of the United States (1929-1933), was a successful mining engineer, humanitarian, and administrator. ... The Smoot-Hawley Tariff Act raised US tariffs on over 20,000 dutiable items to record levels, and, in the opinion of many economists, protracted the Great Depression. ... The Great Depression was a worldwide economic downturn, starting in 1929 and lasting through most of the 1930s. ...

The before-said crash and the beginning of the New Deal of Franklin D. Roosevelt can be seen as an end to the Lincoln-Republican version of the American System as originally practiced with high tariff protection and national banking (replaced in by the Federal Reserve System). The New Deal, continued infrastructure improvements through the numerous public works projects of the Works Progress Administration (WPA) as well as the creation of the Tennessee Valley Authority (TVA); brought massive reform to the banking system of the Federal Reserve while investing in various ways in industry to stimulate production and control speculation; but abandoned protective tariffs while embracing moderate tariff protection (revenue based 20-30% the normal tariff under this) through reciprocity, choosing to subsidized industry as a replacement. Wikiquote has a collection of quotations related to: New Deal The New Deal is the name given to the series of programs implemented between 1933-37 under President Franklin D. Roosevelt with the goal of relief, recovery and reform of the United States economy during the Great Depression. ... FDR redirects here. ... In international relations and treaties, the principle of reciprocity states that favours, benefits, or penalties that are granted by one state to the citizens or legal entities of another, should be returned in kind. ...

Roosevelt's "New Deal" programs and policies were continued (controlled Federal Reserve, public works projects, with revenue tariffs and subsidy" ) on through the Truman, Eisenhower, Kennedy, and Johnson administrations. America remained dominant in industrial strength during this era with little competition for her industries and with moderate protection offered through subsidy and revenue tariffs under reciprocity arrangements.

The "Cold War" opened a need to placate U.S. allies with greater trade opportunity and lead directly to several rounds of trade negotiations. These culminated in 1973 when the "Kennedy" Round concluded under President Richard Nixon which cut U.S. tariffs to all time lows, ended the New Deal orientation towards reciprocity and subsidy, and began a gradual move to "laissez faire" through semi-privatization of the U.S. Post Office (once a Cabinet post and intended as a national service) which would become the U.S. Postal Service. The administrations of Ford and Carter continued the Nixonian policies and trade concessions in each successful negotiation. Privatization and "contracting out" continued on through Reagan, Bush, Clinton, and Bush and continues today together with continuing trade concessions/liberalization through NAFTA and CAFTA as well as recent mass in-sourcing of cheap labor through the 1990's and 2000's and under President George Bush a call for an official "Guest Worker" program in the recent immigration debate under way in the United States of America, which would legitimize millions of illegal aliens now residing there. (Gill and Batra)

Legacy of the American System and renewed interest today

Today, in the climate of the recent Dubai ports controversy and illegal immigration/guest worker debate, some commentators and activists have revived interest in protecting and promoting American industry^{[citation needed]}, including 'fair trade' advocates Ross Perot, the Reform Party, Pat Choate, Alan Tonelson, Lou Dobbs, William H. Hawkins, and James Fallows; with alternative interpretations offered by Patrick J. Buchanan and Lyndon LaRouche. Those who have shown interest in the internal improvements include persons from both major parties in America, including Governor Arnold Schwarzenegger of California and Senator Harry Reid of Nevada. There has been increasingly bipartisan collaboration in the U.S. Senate to revive a national commitment to manufacturing and infrastructure. On June 14, 2005, Senators Lindsey Graham (R-SC) and Hillary Clinton (D-NY) formed the Senate Manufacturing Caucus.[34] In addition, Senators Clinton, George Voinovich, and Thomas Carper introduced the Infrastructure Improvement Bill on March 8, 2006. In the press release announcing the bill, Clinton writes that “Our nation’s economic strength throughout history has been inexorably linked to the investments made in our public infrastructure. From the Transcontinental Railroad to the National Highway System, the public sectsectorsvestments in our roads, our waterways, our railways and our aviation systems have defined the bedrock strengths of the American economy and its people."[35] Henry Ross Perot (born June 27, 1930), is a billionaire American businessman from Texas best known as a candidate for President of the United States (in 1992 and 1996). ... The Reform Party may be: Estonia - Eesti Reformierakond Gibraltar - Gibraltar Reform Party United States Reform Party of the United States of America, formerly led by Ross Perot. ... Patrick Jeffrey Pat Choate was the 1996 Reform Party of the United States of America Vice President candidate. ... Louis Gonzales Dobbs (born September 24, 1945) is the anchor and managing editor of CNNs hour-long weeknight program Lou Dobbs Tonight, an editorial columnist, and host of a syndicated radio show. ... James Fallows is an American print and radio journalist who has been associated with The Atlantic Monthly for many years and has written seven books. ... Patrick Buchanan Patrick Joseph Buchanan (born November 2, 1938), usually known as Pat Buchanan, is an American conservative journalist and a well known television political commentator. ... Defunct California Proposition 64 North American Labour Party Party for the Commonwealth of Canada Parti pour la république du Canada U.S. Labor Party Lyndon Hermyle LaRouche, Jr. ... Arnold Alois Schwarzenegger (born July 30, 1947) is an Austrian-American bodybuilder, actor, and Republican politician, currently serving as the 38th Governor of California. ... Harry Mason Reid (born December 2, 1939) is the senior United States Senator from Nevada and a member of the Democratic Party, for which he serves as Senate Minority Leader. ... Template:Diffgggtgerent calendars 2005 (MMV) was a common year starting on Saturday of the Gregorian calendar. ... Lindsey Olin Graham (born July 9, 1955) is an American politician from South Carolina. ... Hillary Clinton Hillary Diane Rodham Clinton (born October 26, 1947), was First Lady of the United States from 1993 to 2001, as the wife of President Bill Clinton. ... George Victor Voinovich (Vojnović in Serbian) (born July 15, 1936) is an American politician of the Republican party. ... Thomas Richard Carper (born January 23, 1947) is a United States politician who has been a U.S. Senator from Delaware since 2001. ...

Realigning forces of Jeffersonian and Hamiltonian systems and possible future

The two dominant forces of American economic history - Jeffersonian economics (rooted in Adam Smith's "British System" of Free Trade) and Hamiltonian economics (rooted in Alexander Hamilton's "American System" of Nation centered Capitalism) are arising again into the two dominant party's in the United States.

The Democratic Party continues to move towards a combination of Roosevelt's Progressive, Lincoln's Republican, Clay's Whig, and Hamilton's Federalist principles on trade and economics, while continuing to embrace its rooted Jeffersonian beliefs in equal opportunity, liberty, and democracy. It's open borders - free-trade leadership in the New Democrat faction spearheaded once by President Bill Clinton has fractured and remains the largest impediment to this modern party maintaining the New Deal style of "American System" Hamiltonian economic policy, let alone to remaining a competent majority party dependent on Middle Class support.

The modern Republican Party continues to move towards the old Democratic Party principles with a major shift of once Southern Democrat's into the party during the 1980's-present era and with the support of major coporacorporationsough a large number of rank and file RepublRepublicanst the open borders - free trade sentiment of the modern Republican Party and favor something akin to the traditional Lincolnian economic policies. The modern Republican Party as expressed by Congress stands for privatization, free-trade, and laisselaissez economics once advocated by the party of Wilson, Cleveland, Polk and Jackson (ie. the pre-New Deal Democratic Party) which remains its overall impedeimpedimentcoming more like Lincoln's "American System" Hamilonian economic party and may be its "Hartford Convention" like cause of decline to third party or minority party status.

The third party, Reform Party of Ross Perot, Nader, and Buchanan has also advocated a strong return to "American System" like economics in their platform planks making it an ally of the Democratic Party and rank and file Republicans on economic issues over trade, immigration, wages, and out-sourcing - though disagreements remain over certain social and immigrant issues and over membership in the WTO. The Green's have also displayed sentiment in opposition to Free Trade, NAFTA, CAFTA, and the WTO.

The two American economic forces are now in flux with a possible third party alignment that would succeed the Federalist, Whig, Republican (Lincoln-Roosevelt), and Democratic (New Deal Roosevelt-Johnson) tradition rooted in Hamiltonian economic principles (protect and promote domestic industry (fair trade), internal improvements (public works like High Speed Rail), and national banking (more public control of FED or government issuance of paper currency instead of FED without 2% interest rate charged by FED as President John F. Kennedy had done in the early sixties) together with a basic Jeffersonian-libertarian ideal toward social/moral policy, leaving American citizens as individual sovereigns who own their country and government by that right.

Supporters of the American System or its policies

Pre-Clay (support below indicates adherence to pre-Clay policies):

• Alexander Hamilton, first Secretary of the Treasury (see his Report on Manufactures).
• George Washington, first President of the United States, supported Hamilton's plans.
• James Madison, fourth President of the United States, Father of the Constitution.
• James Monroe, fifth President of the United States, recharre-chartedank of USA
• John Q. Adams, sixth President of the United States.
• Federalist Party of Alexander Hamilton
• Democratic-Republican Party of Madison and Monroe (after War of 1812)

Clay and Whig Party Era: Alexander Hamilton (January 11, 1755 or 1757 – July 12, 1804) was an American politician, statesman, writer, lawyer, and soldier. ... The United States Secretary of the Treasury is the finance minister of the Federal Government of the United States. ... A portrait of Alexander Hamilton by John Trumbull, 1792. ... George Washington (February 22, 1732 – December 14, 1799) was the Commander in Chief of the Continental Army in the American Revolutionary War from 1775 to 1783, and later the first President of the United States, an office to which he was twice elected unanimously (unanimous among the Electoral College) and... James Madison (March 16, 1751 – June 28, 1836) was the fourth (1809–1817) President of the United States. ... James Monroe (April 28, 1758 – July 4, 1831) was the fifth (1817–1825) President of the United States and author of the Monroe Doctrine. ... Order: 6th President Term of Office: March 4, 1825–March 3, 1829 Preceded by: James Monroe Succeeded by: Andrew Jackson Date of birth: July 11, 1767 Place of birth: Braintree, Massachusetts Date of death: February 23, 1848 Place of death: Washington, D.C. First Lady: Louisa Catherine (Johnson) Adams Political... The label Federalist refers to two major groups in the history of the United States of America: (1. ... The Democratic-Republican party was a United States political party, which evolved early in the history of the United States. ...

• Henry Clay, Senator from Kentucky.
• Henry C. Carey, Lincoln's economic advisor and leading economist of 19th century.
• Friedrich List, leading German economist who wrote "National System of Political Economy."
• Congressman Andrew Stewart, advocate for American System
• National Republican Party of John Q. Adams from remnants of Democratic-Republican Party
• Whig Party of Henry Clay sucesssuccessortional Republican Party

Post-Clay Lincoln and Republican Party Era: Henry Clay Henry Clay (April 12, 1777 in Hanover County, Virginia, USA – June 29, 1852 in Washington, D.C.) was a leading American statesman and orator who served in both the House of Representatives and Senate. ... A senate is a deliberative body, often the upper house or chamber of a legislature. ... Official language(s) English Capital Frankfort Largest city Louisville Area  Ranked 37th  - Total 40,444 sq. ... Henry Charles Carey (December 15, 1793 - October 13, 1879), American economist, was born in Philadelphia. ... Friedrich List (August 6, 1789 - November 30, 1846) was a German economist born at Reutlingen, Württemberg. ... -1... This article is about the British Whig party. ...

• Abraham Lincoln, sixteenth President of the United States.
• William H. Seward, Secretary of State under Lincoln and Johnson.[36]
• Ulysses S. Grant[37]
• Benjamin Harrison[38]
• William McKinley, twenty-fifth President of the United States.
• Andrew Carnegie, leading industrialist and philanthropist.
• Theodore Roosevelt, twenty-sixth President of the United States.
• William H. Taft, twenty-seventh President of the United States.
• Otto Von Bismarck and Germany from 1871-1914.
• Republican Party fully til 1950's, in part until circa 1970's.[39]
• Democratic Party 1932-present with New Deal changes (alothoalthough differences between rank and file members and leadership over immigration and wages - and the WTO).

Abraham Lincoln (February 12, 1809 – April 15, 1865), sometimes called Abe Lincoln and nicknamed the Rail Splitter, Honest Abe and the Great Emancipator, was the 16th President of the United States (1861 to 1865), and the first president from the Republican Party. ... William H. Seward William Henry Seward (May 16, 1801 – October 10, 1872) was United States Secretary of State under Abraham Lincoln and Andrew Johnson. ... Ulysses S. Grant (born Hiram Ulysses Grant, April 27, 1822 – July 23, 1885) was the 18th President of the United States (1869–1877). ... Benjamin Harrison VI (August 20, 1833 – March 13, 1901) was the 23rd President of the United States. ... William McKinley (January 29, 1843 – September 14, 1901) was the 25th President of the United States. ... Andrew Carnegie (November 25, 1835 – August 11, 1919) was a Scottish businessman, a major philanthropist, and the founder of the Carnegie Steel Company which later became U.S. Steel. ... Theodore Roosevelt, Jr. ... William Howard Taft I (September 15, 1857–March 8, 1930) was the 27th President of the United States (1909-1913), and the 10th Chief Justice of the United States (1921 - 1930). ... For alternative meanings: See Bismarck (disambiguation). ... This article is about the modern United States Republican Party. ... The Democratic Party is one of the two major political parties in the United States, the other one being the Republican Party. ...

Opponents of the American System or its policies

Philosophical Critics:

• Adam Smith *-proposed alternative Free Trade and Laissez-faire system
• Karl Marx *-proposed alternative Communist system of total state control

Pre-Clay Era Critics: Adam Smith, FRSE, (baptised June 5, 1723 – July 17, 1790) was a Scottish political economist and moral philosopher. ... Free trade is an economic concept referring to the selling of products between countries without tariffs or other trade barriers. ... Laissez-faire is short for laissez faire, laissez passer, a French phrase meaning to let things alone, let them pass. First used by the eighteenth century Physiocrats as an injunction against government interference with trade, it is now used as a synonym for strict free market economics. ... Karl Heinrich Marx (May 5, 1818 Trier, Germany – March 14, 1883 London) was an immensely influential German philosopher, political economist, sociologist, and revolutionary. ... This article is about communism as a form of society and as a political movement. ...

• Thomas Jefferson *-in later years changed mind.
• James Madison *-changed mind after War of 1812.
• Democratic-Republican Party *-prior to War of 1812.

Clay and Whig Era Critics: Thomas Jefferson (April 13, 1743 N.S. – July 4, 1826) was the third President of the United States (1801–1809), principal author of the Declaration of Independence (1776), and one of the most influential founders of the United States. ... James Madison (March 16, 1751 – June 28, 1836) was the fourth (1809–1817) President of the United States. ... The Democratic-Republican party was a United States political party, which evolved early in the history of the United States. ...

• Andrew Jackson *-opposed to national banking and internal improvements.
• Martin Van Buren
• John C. Calhoun *-original supporter, after 1828 opposed.[40]
• John Tyler *-elected as a Whig Vice-President, but opposed Whig program.
• Democratic Party of Andrew Jackson.

Post-Clay Lincoln and Republican Era Critics: Andrew Jackson (March 15, 1767 – June 8, 1845) was the seventh President of the United States (1829-1837), first governor of Florida (1821), general of the Battle of New Orleans (1815), a founder of the Democratic Party, and the eponym of the era of Jacksonian democracy. ... Martin Van Buren (December 5, 1782 – July 24, 1862), nicknamed Old Kinderhook, was the eighth President of the United States. ... John Caldwell Calhoun (March 18, 1782 – March 31, 1850) was a prominent United States politician from South Carolina during the first half of the 19th century. ... John Tyler (March 29, 1790 – January 18, 1862) was the tenth (1841-1845) President of the United States. ... The Democratic Party is one of the two major political parties in the United States, the other one being the Republican Party. ...

• Grover Cleveland[41]
• Woodrow Wilson, twenty-eighth President of the United States.
• Democratic Party of Cleveland, Bryan, and Wilson until circa 1932, though Southern faction remained to later gravitate to Republican Party of present influencing that party to favor Free-trade over domestic manufacturing and Independence concerns - the original Democratic Party stance until the New Deal.
• Republican Party of Goldwater, Nixon, Reagan, Bush's circa 1960's-present in part (not typically rank and file members, but leadership as expressed through Presidents and Senate and some think tanks).

Stephen Grover Cleveland (March 18, 1837 – June 24, 1908) was the 22nd (1885–1889) and 24th (1893–1897) President of the United States, and the only President to serve two non-consecutive terms. ... Thomas Woodrow Wilson (December 28, 1856 – February 3, 1924) was the 28th President of the United States (1913–1921). ... The Democratic Party is one of the two major political parties in the United States, the other one being the Republican Party. ... This article is about the modern United States Republican Party. ...

See also

• Capitalism
• Communism
• Dirigisme
• Mercantilism
• Socialism

Capitalism has been defined in various, but similar, ways by different theorists. ... This article is about communism as a form of society and as a political movement. ... Dirigisme (from the French) (in English also dirigism although per the OED both spellings are used) is an economic term designating an economy where the government exerts strong directive influence. ... A painting of a French seaport from 1638, at the height of mercantilism. ... The neutrality of this introduction is disputed. ...

Important online reading on the American System

• • Excerpts of the Report on Manufactures by Alexander Hamilton
  • Report on Public Credit I by Alexander Hamilton
  • Argument in Favor of the National Bank by Alexander Hamilton
  • The Harmony of Interests by Henry C. Carey
  • The National System of Political Economy by Friedrich List
  • Federalist #7, The Federalist Papers by Alexander Hamilton as Publius
  • The American System: Speeches on the Tariff Question and Internal Improvements by Congressman Andrew Stewart
  • John Bull the Compassionate

Alexander Hamilton (January 11, 1755 or 1757 – July 12, 1804) was an American politician, statesman, writer, lawyer, and soldier. ... Henry Charles Carey (December 15, 1793 - October 13, 1879), American economist, was born in Philadelphia. ... Friedrich List (August 6, 1789 - November 30, 1846) was a German economist born at Reutlingen, Württemberg. ... Title page of an early Federalist compilation. ...

Modern sources

• Batra, Ravi, Dr. The Myth of Free Trade: The pooring of America (1993)
• Boritt, Gabor S. Lincoln and the Economics of the American Dream (1994)
• Buchanan, Patrick J. The Great Betrayal (1998)
• Curry, Leonard P. Blueprint for Modern America: Nonmilitary Legislation of the First Civil War Congress (1968)
• Croly, Herbert The Promise of American Life (2005-reprint)
• Dobbs, Lou Exporting America: Why Corporate Greed is Shipping American Jobs Overseas (2004)
• Joseph Dorfman. The Economic Mind in American Civilization, 1606-1865 (1947) 2 vol
• Joseph Dorfman. The Economic Mind in American Civilization, 1865-1918 (1949) vol 3
• Foner, Eric. Free Soil, Free Labor, Free Men: The Ideology of the Republican Party before the Civil War (1970)
• Faux, Jeff. The Global Class War (2006)
• Gardner, Stephen H. Comparative Economic Systems (1988)
• Gill, William J. Trade Wars Against America: A History of United States Trade and Monetary Policy (1990)
• Carter Goodrich, Government Promotion of American Canals and Railroads, 1800-1890 (Greenwood Press, 1960)
  • Goodrich, Carter. "American Development Policy: the Case of Internal Improvements," Journal of Economic History, 16 ( 1956), 449-60. in JSTOR
  • Goodrich, Carter. "National Planning of Internal Improvements," ;;Political Science Quarterly, 63 ( 1948), 16-44. in JSTOR
• Richard Hofstadter, "The Tariff Issue on the Eve of the Civil War," American Historical Review, 64 (October 1938): 50-55, shows Northern business had little interest in tariff in 1860, except for Pennsylvania which demanded high tariff on iron products
• Jenks, Leland Hamilton. "Railroads as a Force in American Development," Journal of Economic History, 4 (1944), 1-20. in JSTOR
• John Lauritz Larson. Internal Improvement: National Public Works and the Promise of Popular Government in the Early United States (2001)
• Lively, Robert A. "The American System, a Review Article," Business History Review, XXIX (March, 1955), 81-96. recomended starting point
• Lauchtenburg, William E. Franklin D. Roosevelt and the New Deal 1932-1940 (1963)
• Lind, Michael Hamilton's Republic: Readings in the American Democratic Nationalist Tradition (1997)
• Lind, Michael What Lincoln Believed: The Values and Convictions of America's Greatest President (2004)
• Paludan, Philip S. The Presidency of Abraham Lincoln (1994)
• Richardson, Heather Cox. The Greatest Nation of the Earth: Republican Economic Policies during the Civil War (1997)
• Remini, Robert V. Henry Clay: Statesman for the Union. New York: W. W. Norton Co., 1991
• Roosevelt, Theodore. The New Nationalism (1961-reprint)
• Richardson, Heather Cox. The Greatest Nation of the Earth: Republican Economic Policies during the Civil War (1997)
• Edward Stanwood, American Tariff Controversies in the Nineteenth Century (1903; reprint 1974), 2 vols., favors protectionism

Older historic sources

1. W. Cunningham, The Rise and Decline of the Free Trade Movement (London, 1904)
2. G. B. Curtiss, Protection and Prosperity: an ; W. H. Dawson, Protection in Germany (London, 1904
3. Alexander Hamilton, Report on the Subject of Manufactures, communicated to the House of Representatives, 5th December 1791
4. F. Bowen, American Political Economy (New York, 1875)
5. J. B. Byles, Sophisms of Free Trade (London, 1903); G. Byng, Protection (London, 1901)
6. H. C. Carey, Principles of Social Science (3 vols., Philadelphia, 1858-1859), Harmony of Interests Agricultural, Manufacturing and Commercial (Philadelphia, 1873)
7. H. M. Hoyt, Protection v. Free Trade, the scientific validity and economic operation of defensive duties in the United States (New York, 1886)
8. Friedrich List, Outlines of American Political Economy (1980-reprint)
9. Friedrich List, National System of Political Economy (1994-reprint)
10. A. M. Low, Protection in the United States (London, 1904); H. 0. Meredith, Protection in France (London, 1904)
11. S. N. Patten, Economic Basis of Protection (Philadelphia, 1890)
12. Ugo Rabbeno, American Commercial Policy (London, 1895)
13. Ellis H. Roberts, Government Revenue, especially the American System, an argument for industrial freedom against the fallacies of free trade (Boston, 1884)
14. R. E. Thompson, Protection to Home Industries (New York, 1886)
15. E. E. Williams, The Case for Protection (London, 1899)
16. J. P. Young, Protection and Progress: a Study of the Economic Bases of the A merican Protective System (Chicago, 1900)
17. Clay, Henry. The Papers of Henry Clay, 1797-1852. Edited by James Hopkins

External links

• Party Platforms of Republican and Democratic Party's, including links to Third Party's in history.
• Excerpt from The Harmony of Interests
• "Eroding U.S. Industrial Base Comes With Price"
• "Memo to Bush and McCain: National Security Requires Industrial Independence, Too"
• Lincoln Debunked Criticism of the American System from a Libertarian Party activist
• "Punchinello", Vol. 1, Issue 8 pg 125 Article from 1870 against the American System