Economics American School: Unlocking the Legacy of Economic Innovation, The American School of Economics

By Fouad Sabry

What is Economics American School

Within the realms of politics, policy, and philosophy, the American School, which is often referred to as the National System, is a representation of three distinct yet interconnected structures. Over the course of its existence, which spanned from the 1790s to the 1970s, the policy underwent a fluctuating range of degrees and implementation specifics. A historian by the name of Michael Lind describes it as a cohesive applied economic philosophy that has logical and conceptual links with other economic notions.

How you will benefit

(I) Insights, and validations about the following topics:

Chapter 1: American School (economics)

Chapter 2: Whig Party (United States)

Chapter 3: Tariff

Chapter 4: Morrill Tariff

Chapter 5: Free trade

Chapter 6: Panic of 1819

Chapter 7: National Republican Party

Chapter 8: Jacksonian democracy

Chapter 9: Henry Charles Carey

Chapter 10: History of the United States (1789-1849)

Chapter 11: Report on Manufactures

Chapter 12: Tariff of 1816

Chapter 13: Second Party System

Chapter 14: Tariff in United States history

Chapter 15: Bank War

Chapter 16: American System (economic plan)

Chapter 17: Presidency of Andrew Jackson

Chapter 18: Presidency of John Quincy Adams

Chapter 19: Protectionism in the United States

Chapter 20: Political eras of the United States

Chapter 21: United States Senate Committee on the Tariff Regulation

(II) Answering the public top questions about economics american school.

(III) Real world examples for the usage of economics american school in many fields.

Who this book is for

Professionals, undergraduate and graduate students, enthusiasts, hobbyists, and those who want to go beyond basic knowledge or information for any kind of economics american school.

• Language: English
• Publisher: One Billion Knowledgeable
• Release date: Jan 11, 2024

Book preview

Chapter 1: American School (economics)

In politics, policy, and philosophy, the American School, also known as the National System, represents three distinct yet interrelated concepts. The policy existed from the 1790s to the 1970s, with varying degrees and implementation specifics. Michael Lind, a historian, defines it as a coherent, applied economic philosophy with logical and conceptual connections to other economic concepts. As it is closely related to mercantilism, it can be viewed as being in opposition to classical economics. It comprised these three fundamental policies::

Protecting industry through selectively high tariffs (particularly between 1861 and 1932) and subsidies (particularly between 1932 and 1970).

Government infrastructure investments resulting in targeted internal improvements (especially in transportation).

A national bank whose policies favor the expansion of productive enterprises over speculation.

Alexander Hamilton's ideas and three Reports to Congress formed the philosophical basis of the American School

The American School of economics represented the legacy of Alexander Hamilton, who argued in his Report on Manufactures that the United States could not attain complete independence until it was self-sufficient in all essential economic products. Hamilton partially based his economic system on the successive regimes of Colbert's France and Elizabeth I's England, while rejecting the harsher aspects of mercantilism, such as the pursuit of colonies as markets. The American System, as later defined by Senator Henry Clay, who became known as the Father of the American System for his ardent support of it, was intended to unite the nation from north to south, east to west, and city to farmer. The objective, articulated most forcefully by Hamilton, was to safeguard the nation's hard-won political independence by avoiding economic and financial dependence on the powers and princes of Europe. The establishment of a strong central government capable of promoting science, invention, industry, and commerce was viewed as an essential means of promoting the general welfare and making the U.S. economy robust enough for the people to determine their own destinies.

Jefferson and Madison vehemently opposed Hamilton's program, but were compelled to implement it due to the embargo imposed by the Non-Intercourse Act in December 1807 and the War of 1812 against Britain.

During the time period preceding the American Civil War, a number of federal programs gave the American School its form and substance. These programs included the establishment of the Patent Office in 1802 and the Coast and Geodetic Survey in 1807, as well as the 1824 Rivers and Harbors Act's other measures to improve river and harbor navigation.

Other developments included the numerous western Army expeditions, Beginning in 1804 with Lewis and Clark's Corps of Discovery and continuing through the 1870s (see, for instance, Corps of Discovery), the careers of Major Generals Stephen Harriman Long and John C.

Frémont), Almost always under the direction of an Army Corps of Topographical Engineers officer, which supplied vital information to the overland pioneers who followed (see, for example, The career of Lieutenant Colonel Randolph B.

Marcy), Army Engineer officers were assigned to assist or direct the surveying and construction of early railroads and canals, as well as the establishment of the First and Second Banks of the United States and a number of protectionist measures, such as the Tariff of 1828.

The economists Friedrich List (1789–1846) and Henry Carey (1789–1878) were prominent advocates. List, a prominent German and American economist of the 19th century, coined the term National System and expanded on it in his book The National System of Political Economy. In his book of the same name, Carey referred to this as a Harmony of Interests, a harmony between labor and management as well as between agriculture, manufacturing, and merchants.

Clay coined the term American System to differentiate it from the competing theory of economics at the time, the British System represented by Adam Smith in his book Wealth of Nations.

The American School included three fundamental policy tenets:

Advocates of protectionism and opponents of free trade, especially for the protection of infant industries and those facing import competition from abroad. Tariff Act of 1789, Tariff Act of 1816, and Morrill Tariff are examples.

Create physical infrastructure: government financing of internal improvements to increase the speed of commerce and the development of industry. This entailed regulating privately owned infrastructure to ensure that it meets national requirements. Cumberland Road and Union Pacific Railroad are two examples.

Create financial infrastructure: a National Bank backed by the government to issue currency and promote commerce. This involved the use of sovereign powers to regulate credit in order to foster economic growth and discourage speculation. First and Second Banks of the United States, and the National Banking Act are examples.

In his book Harmony of Interests, Henry C. Carey, a prominent American economist and adviser to Abraham Lincoln, outlines two additional tenets of the American School economic philosophy that distinguish it from those of Adam Smith and Karl Marx:

Government support for the advancement of science and public education through a public common school system and grants and subsidies for innovative research.

Rejection of class conflict in favor of Harmony of Interests between: owners and workers, farmers and manufacturers, wealthy class and working class.

In a passage from his book The Harmony of Interests, Carey discusses the distinction between the American and British economic systems:

The world faces two systems: one that seeks to increase the need for commerce, and the other that seeks to increase the capacity to maintain it. One seeks to exploit the Hindu and bring the rest of the world down to his level, while the other seeks to raise the human standard throughout the world to our level. One is concerned with poverty, ignorance, depopulation, and barbarism, while the other is concerned with rising wealth, comfort, intelligence, action combination, and civilization. One seeks global war, while the other seeks global peace. One is the English system, and the other, which we are proud to call the American system, is the only one ever devised whose aim was to elevate and equalize the condition of man worldwide.

Since the 1830s, the government issuance of fiat paper money has also been associated with the American School. The origins of the policy can be traced back to the days of the American colonies, when colonial scrip served as the medium of exchange. John C. Calhoun advocated for a debt-free currency issued and controlled by the government as early as 1837. As a result, banking institutions supported the British school, which advocated the gold standard throughout the 1800s, in order to preserve their profits.

During the Civil War, a shortage of precious metals necessitated the issuance of United States Notes, also known as greenbacks. Lincoln's economic advisor, Henry C. Carey, published a series of letters to the Speaker of the House in March 1865 with the title The Way to Outdo England Without Fighting Her. Carey advocated for the continuation of the greenback policy even after World War II, while also increasing bank reserve requirements to 50 percent. This would have permitted the United States to develop its economy without reliance on foreign capital (primarily British gold). Carey