At least one of Carey's tracts, THE HARMONY OF INTERESTS, couches in less abstract
philosophical terms just what he meant with his organic analogy of society. He describes it as the mission
of the United States, but more precisely, of the American System. This polemic, which he wrote in 1851,
reemphasized his argument for a labor-industrial alliance built around their mutual self-interest -- co-
operation under the American System. There were, in fact, he argued "two systems ... before the world" --
his American System geared to development, and the English system bent on looting. That latter meant
the degradation of humanity in contrast to the elevating and equalizing of the conditions of man
everywhere through the former.

Mr. Carey devotes considerable special attention to Thomas Malthus and David Ricardo in a number
of his writings. Since industrialization, agricultural advances, and the like have made it possible for
human population to grow throughout the ages, the overpopulation theories of Malthus are held invalid.
The simple point is that the world is not overpopulated; it is underdeveloped. Following the pattern of
settlement in his state of Pennsylvania, Carey goes on to demonstrate that it did not advance from the
better lands to the poorer ones, a fundamental undergirding of Ricardo's doctrine of ground rent. His
position presaged what happened to the 'Great American Desert.' Lands can only become what Ricardo
called 'best' through the conscious intervention of people to improve them with the introduction of
implements, fertilizer, techniques, and the like. It is only in this way that we give value to land. And it
was thus that the Great Plains became the Bread Basket that it did. To the extent that rent is involved,
contrary to the diminishing return described in Ricardo resulting from an increasing population on less
and less available (and poorer) land, rising population working with enhanced technological skills
produces increasing returns. It is also thus that what had been opposing interests develop a 'habit of
union.' And, as productive capacities expand through the increased labor power (or quality of labor as
Carey termed it), a 'perfect harmony of interests' evolves which could reach all corners of the earth.

In an earlier work in 1837, entitled PRINCIPLES OF POLITICAL ECONOMY, he actually pursued
the argument further. Further, too, he criticizes his contemporary political economists on similar grounds.
Human beings should not be viewed as occupied primarily in the acquisition and consumption of wealth,
but rather they seek to improve their condition. Reasoning man, driven thus by the impetus toward
progress, is forced to pursue cooperation with his fellow man.

Allan Salisbury writes in his book THE CIVIL WAR AND THE AMERICAN SYSTEM that Carey
has completely debunked Ricardo's theories or rent, diminishing return, and declining wages:

"Carey demonstrates how yesterday's values are depreciated by today's advances
in technology by focusing on the efforts of technological progress in an economy
as the determination of value. For this, Frederich Engels credits him with being the
first to state that the value of a commodity is it necessary cost of social reproduction
and not its accounting cost. Carey, also in this context, defined the combined quantity
and quality (or productive power) of labor to be the sole determinant of economic
value in a capitalist economy."(83)

At this point he is in direct contradiction with Adam Smith whose contention was that advantage obtained
from increasing diversification of labor arose only out of economic interrelationship, not man's wisdom
and reason. This is neither Locke's proposition of value arising from the labor entailed in harvesting
resources, not is it the labor theory of value of Marx. The important point is the improved quality of labor
power. Furthermore, it is basic in Adam Smith that there is a fundamental variance among the interests of
economic classes, an assertion quite opposite the one argued by Henry Carey.

Carey's father, Matthew, the publisher, had been quite more adamant in contradicting Adam Smith,
perhaps, than Henry was, at least initially. In his publications, OLIVE BRANCH and
AUTOBIOGRAPHY, he attacked Smith's suggestion that the U.S. return to a British colonial
relationship. The 'freedom of trade' Smith envisioned, with its supposed guarantees that displaced
manufactures and mechanics in America would be absorbed in 'collateral manufactures' or agriculture was
bunk to Matthew:

"These positions, absurd, futile, and untenable as they are, form the bases
of the WEALTH OF NATIONS. To a person wholly unbiased by prejudice,
it must be a matter of astonishment how a work, resting on such sandy and
miserable foundation, could have obtained, and still more, have so long
persevered, its celebrity. The monstrous absurdity of these doctrines and the
facility with which they might be refuted, induced me to enter the lists against
this Goliath with the sling and stone of truth."(84)

Henry's supposed (by Green) early enthusiasm for Adam Smith was clearly more than tempered with
time and the evolution of his theory. Undoubtedly, the influence of his father impacted upon him, as well.
A thorough comparison of Adam Smith and Henry Carey would probably be a worthwhile undertaking,
but for purposes here there seems to be a clear antimony between Smith's laissez faire and the American
System of Carey with its obvious alternative view of the function of government. Probably an even more
vital differentiation resides in their contrasting visions of human nature, or at least its potential, centered
around the idea of free will. The point at which there may be the greatest specificity of programmatic
divergence between the two probably centers around the issue of free trade and protection. Carey was
adamant in behalf of protective tariffs. Importantly, however, his full image of 'protection' was much
more than that. While there is no question that he meant by this the mechanism of the protective tariff
itself, that is but one albeit essential element. The sum and substance of the agenda of policies intended to
promote the upgrading of the value of human labor power seems most appropriately what he meant by the
term protection. In Carey's case, as with his cohorts, this would encompass all aspects of governmental
exercise to foster this. The credit mechanisms ranging from institutions like the several national banking
systems to the associated expansive money supply and direction of credit availability toward the most
socially reproductive investments including manufacturing, technology, invention and innovation, and
internal improvement projects would thus be part and parcel of it. In short, it was actually the entire
American System program that was 'protective,' safeguarding 'infant' industries being as much a function
of a source of cheap and available credit for operation and expansion as would be a duty. Carey quite
clearly does not represent the 'slippery slope' of the third way as posed by Hayek.

His protection is not really not so much different than the manner in which the concept is used by
economists today with one proviso -- the late 20th century is not the mid 19th century. Bronfenbrenner,
Sichel, and Gardner in their second edition MACROECONOMICS text treat it explicitly in this way:

"The term protection makes most people think at once of tariffs and quotas
used to protect domestic import-competing industries. These are indeed cases
of protection, but there are many others. An important one is administrative
protection ..." (85)

They go on to distinguish between nominal and effective protection, the first referring to tariff rates
simply. Effective protection would also include any sort of governmental promotion of output development
and focuses on that which enhances the value added in production. Hence, in Carey, protection
unquestionably refers to the whole American System and even includes his argumentation for expansive
immigration policy. In presenting political and economic arguments for such protection, these authors (of
MACROECONOMICS) treat not only the Hamiltonian 'infant industries' argument against 'predatory
foreigners,' but also the terms of trade argument which contends that:

"... the terms of trade improve when the average price of a country's exports
rises or the average price of its imports fall ..."(86)

The expanded production Carey's American System was designed to foster would have just such an
impact. In political economic terms, the term 'expanded reproduction' probably approximates his agenda
more exactly.

Bronfenbrenner, et al, further reference the 'Home Market' argument. The cultivation of domestic
markets would prosper all aspects if production. Inducements to foreign investment of capital are similarly
viewed as protectionist. They would also increase the availability of capital to finance expansion and raise
the value of labor. This is identified as the 'Capital-Attraction' argument. There is as well suggested a
'National Defense' argument which while it entails tariff-type measures, also extends to policy generally
supportive of critical manufactures for defense. Thus, the 'critical minimum' argument is allied to that.
Policies "aimed at supporting a critical minimum of production in some basic industry" (87) re-emphasize
governmental effort to foster certain production in any number of ways are therefore 'effectively'
protective.

The economists specifically note the American System program (identified by them with Henry Clay)
as in this mode. They also, however, say that especially the defense argument was powerful to Adam
Smith (88). But Smith's advocacy was a defense of the Navigation Acts which he identified as efforts to
maintain shipping and the Royal Navy. It may be the case that the Navy clearly did eventually support all
international trade by protecting the seas even for the young United States, but especially at the time he
was speaking of, the intent of the legislation he was supporting was not the 'protection' that would be
envisaged by Carey because it did not promote the general raising of labor value in the world. Rather, it
ran in the sort of British system looting Carey decries most exactly in his HARMONY OF INTEREST
tract.

As has been intimated, perhaps the area in which Green's assessment of Carey can be the most
seriously challenged is in his commentary on Adam Smith, Carey, and tariffs. He repeatedly returns to the
assertion that Smith was a tremendous influence on Carey. Given what has already been said, this claim
may indeed seem suspect. Moreover, not only was Smith generally opposed to protectionist measures, he
was adamantly opposed to the whole idea of important governmental economic program. It has been
otherwise suggested here that where Smith diverged from that overall notion, such as with the Navigation
Acts, he was defending something dramatically different from the protection of Henry Carey. Green's
entire attempt to mesh the two seems to be at times almost what we might call incredible. The central
element of Carey's perspective was certainly protection, but as has been argued, it was much more. It does
seem to be the case, however, that there is a tremendous emphasis in Carey on the particularistic program
of the protective tariff itself. To some extent, such emphasis may have been little more than pragmatism,
of seeking the art of the possible in political effort, especially in light of the general political economy he
espoused. The problem may lie with his analysts who may overemphasize it to the exclusion of the greater
picture. That much said, however, to the extent that the tariff was a critical central plank of the
programmatic thrust of Carey and his cohorts, it is important to understand just how it could be so.

He was capable, it appears, of arguing quite disparately to the diverse sections of the country for such
protection. Green even suggests that it was an 'annoying' literary practice of Carey to argue "that the best
way to achieve a desired result was to follow a course of action which to all those actively engaged in a
given movement appeared a means to secure its polar opposite." (89) Hence, Green complains, Carey
contended that admitting Texas as a slave state would work to erode slavery in the border states as
conditions there would draw slaves from the mid-South to where they would be more valuable. It was not
that he favored expansion of slavery at all, however, for ultimately the tariff-invoked rising value of labor
would cause slavery's demise everywhere, and the admission of Texas would hasten that tendency. He was
also adamant in arguing to the South that they were not being impoverished by the protectionism of the
industrial sector in the North. As Green says:

"With protection, she could trade directly, not only being free of the intervention
of Manchester, England, but also of Lowell, Massachusetts. Carey, of course,
was attempting to undercut the Southern charge ... that the South was being
impoverished by the protective agitations of Northern manufactures, the avarice
of New England shippers, and New York bankers ..." (90)

While some have charged that his design was actually quite paradoxical in an effort to increase the value
of Pennsylvania manufactures, especially in coal and iron, and that it therefore did not fare well beyond
that state's borders (91), the practicality of protection was far more than that implies. In fact, Green's tact
seems often to verge on such cynicism, a problem which seems to blind him to the bigger picture (92). By
cloaking the nation in protection which would enhance Pennsylvania industry, the nation's wealth as a
whole would be engendered, thus effecting a general rise in labor values across the whole country.

In his ESSAY ON THE RATE OF WAGES (1835), it is his argument that the general laissez faire
approach "has had a tendency to depress the rate of wages, and to keep the mass of the people in the state
of poverty ... " (93). Carey goes on to decry the viewpoint prevalent in many political economists that
profits and wages were 'natural antagonists.' (94) The entire notion of 'the poor against the rich' is
condemned:

"Believing ... that their wages are depressed for the benefit of their employers,
they believe that their employers are bound to give them a portion of their profits
in advance of wages, when, in fact, the employers are also sufferers by the same
causes which produce the depression, and are unable to advance them, however
willing they may be. If the real causes of the depression were understood, instead
of combining against their employers, they would unite with them to free their
country from those restrictions and interferences which produce the effect of which
they complain, and would thus secure permanent advantage, instead of a temporary
advance of wages, which is all that can be hoped for from their combination, even if
successful, which is rarely the case ... and if the workmen and laborers could be made
to understand the subject, they would see the division between themselves and the
capitalist, or the rate of wages, is regulated by a law immutable as are those which
govern the motion of the heavenly bodies; that attempts at legislative interference
can only produce disadvantageous effects; and, that the only mode of increasing
wages is by rendering labor more productive, which can only be accomplished by
allowing every man to employ his capital and talent in the way which he deems most
advantageous to himself. They would see that all attempts on the part of the
capitalist, to reduce wages below the natural rate, as well as all on their own part
to raise it above that rate, must fail, as any such reduction must be attended with
an unusual rate of profit to the employer, which must, in its turn, beget competition
among the possessors of capital, and raise the rate of wages ..." (95)

In what may seem to the casual observer to be a defense of Adam Smith, Carey is perhaps defending but
one aspect of his political economy, and, in sum, toward quite different ends. What his real point is
involves the question of limited notions of wealth. There is no such thing. The greater the labor, or labor
power, involved, the greater will be the wealth of any nation. That which inhibits the growth of wealth is
injurious to all while that which "promotes its growth is advantageous." (96) Hence, what Carey is
advocating is in reality the case for ever-increasing potential population density.

In building his case against Nassau William Senior, Mr. Carey even strikes a blow against
contemporary 'protectionists,' who argue that a nation's wealth is reduced by foreign imports. The real
issue is the generation of greater wealth through greater production. As wealth increases (and wages
rates). all share in heightened living standards (97) He further argues against the proposition that
unproductive consumption benefits the laboring classes since it creates employment and that service
production is preferable to that of commodities:

"As the amount of real wages depends upon the quantity and quality of the commodities
obtainable by the laborer, and as that depends upon the total amount of production, this
theory must remain unsusceptible of proof ... " (98)

until the productivity of decreased amounts of labor surpasses a lower level of production by larger
numbers of laborers. The essential aspect of his system, then, involves the measure of the 'powers of
production.' That, he asserts, had been the genius of America in the creation of new machinery
technology. (99) Increasing capital and wages had been the experience in the U.S. , and whenever such
was the case, it was premised on security of person and property, light taxation, limited restriction on
freedom of action and trade, and industry. (100)

But once again, this is not Adam Smith. America's internal and even foreign trade was always vastly
more free than in England, even when tariffs were at their highest. The English case was one of
burdensome taxation necessary to support the large revenue requirements of government, even to the point
of circumscription of improvements in manufacture. (101) On the other hand:

"Habits of industry constitute a very important item in the consideration of the causes
which tend to increase or diminish the product of labor, and, of course, the fund out of
which it is to be paid...In the United States, every inducement is held out to industry."(102)

Carey digresses a bit to complain of what he terms the "English System of poor laws" which create the
"temptation of idleness" and "teach people that they can be supported without labor." (103) He further
suggests "that pauperism leads to crime," (104) adding:

"It is increasingly argued, in relation to the system of free trade, that 'Nature is wrong:
that man is not the proper guardian of his own interests:' and therefore it is deemed
necessary that he should be regulated by law in the manner of pursuing them." (105)

No pursuit will be attempted here of the manner in which this spirit marks a clear distinction between
the British and American systems. It s suggested just that this distinction is a clear break between the
ethos of the Declaration and Constitution and even the somewhat enlightened one of John Locke's interest
seekers. But Carey approaches this in his text, as he proceeds to broach the question as to the character of
government. With the great spread of property in the United States among the population which is, here,
in control of government, there is a definitive difference in that character. He contrasts that with the
delimiting centralization characteristic elsewhere, an attribute which inhibits the accumulation of capital.
The tract then turns as an argument against Mill and his mentor, as it were, Thomas Malthus. The
example of this country, it is argued, is diametrically opposite to that proposed by Malthus, in which
population growth exceeds capital formation and production. But in the final analysis, though Carey
concludes with what seem near laudatory remarks concerning Adam Smith, there is a definitive
difference. The only 'disease' mankind labors under is oppression, and there is an immutable system of
checks and balances that regulates the universe. He even says that 'laissez nous faire' is the 'true doctrine.'
(106) In the beginning, he even invoked the use of that phrase by French merchants against Colbert.(107)
But, in the end, what he is laying out is the argument for the sort of 'protection' and tariff he so
vehemently advocated -- the sort of protection afforded by a government benevolent toward itself as
constituted by the people who here made it, which gently through its authority engenders the advances he
structures as the requisites of the power of labor which afford rising wage levels. It turns out to be much
more like Colbert than Adam Smith.

Comparatively speaking, Carey seems to make much less of the issue of protective tariffs in his early
work than he does later on. This should not be construed as an indicator that there may have been an
'early' and a 'late' Carey. Clearly, exigencies changed. Where his early emphasis was on political economy
generally to foster capital formation, as the nation developed, that more expansive program became more
settled on the tariff issue. In both instances, and especially of relevance here, the early ones, the
prerequisites that logically led to the latter, are explicitly present. Despite what Green has written, the
tariff was never the only issue for Carey, and protection meant much more -- internal improvements,
government activity generally to build wealth, etc. What difference may appear to be there is one of
emphasis at most, growing naturally perhaps as extension of logic from political economic theory to
practical programmatic application. In addition, as the American economy grew through the second
quarter of the nineteenth century, absolute dependence upon British production that had earlier on been
the necessity, diminished, and the furtherance of that development, being the very path to the
mechanization Carey was so explicit about as the basis for increased productive powers of labor to raise
the rate of wages by generally raising wealth, mandated protection from Britain -- which was not merely
at competitive or even unfairly competitive advantage, but was in a virtual state of at least economic
warfare against the United States.

It is essential through all of this to constantly bear in mind Mr. Carey's background and politics. From
the feet of Franklin, at the constant tutelage of his father, to his Hamiltonian commitment, one gets a
better sense of his viewpoint. As the country changed markedly, certainly Carey developed. By the time of
the Whigs, he had become an influential advisor and that influence only grew among his friendlier circles
through the Civil War. But the Whig Party was, for most of its existence, in what might be called a rear-
guard 'holding action' against the forces of Jacksonianism domestically. That Whig versus 'Democracy'
struggle has been the defining contest throughout our history, but the party of Jefferson and Jackson was
scarcely what its reputation portrays. Its interest in development of 'local' markets was in reality little
more than anti-industry, anti-technology, pro-slavery -- jacobin politic to the core.

To any extent that Carey could influence policy, the agenda would be somewhat more constrained than
he would undoubtedly have preferred. He would have, of necessity, placed more emphasis upon items
perceived to have what we now call windows of opportunity available to them. But these are all factors of
which the reductionism of Green seems quite unaware or unable to fathom. Even the 'public Carey' was
constantly more than unifocal on tariffs. In his policy circles, he was even less fixated. Quite obviously,
the tariff figured greatly in much of his later writing, as is otherwise reference here. And while he
approaches the issue at least in basis in the wage rate essay, he broaches the subject more exactly in at
least two of the volumes of his PRINCIPLES OF POLITICAL ECONOMY (1837 and 1838). In the
section about fluctuation of price, as he contends there is a "tendency of the price of capital, as marked by
the rate of interest, to fall" so that "As labor becomes more productive, the capitalist retains a constantly
diminishing proportion of the amount that is lent, and of the commodities that it sells," though in toto
secured wealth escalates to him, he describes a similar "case in the United States, as improvement in the
means of manufacturing the various commodities protected by the tariff, places daily an increased portion
of the products of the country above, and thus renders trade more free." (108) This is simply a
phenomenon of 'the laws of nature' which effect a rising labor value as capital and population density
increase and man enters into cooperative association (public energy) that furthers the process. (109) In a
discussion on the institutions and objects of government at the beginning of the second part of the same
work, he continues the same argument:

"When men associate in larger numbers, the rights and duties of each member
remain the same, and the only difference is that those rights and those duties
are reduced to writing, and termed laws." (110)

Although he draws a direct connection between small and diminishing proportions of support for
government and increased wealth generation, he reiterates the public energy role of government, which he
says "resemble a great insurance office." (111) But, he says, the proportional support diminishes
continually with the rise from the 'infancy of society," (112) terminology which can be construed to be
infant industry protection. Shortly thereafter, in a comparison of the impact of relative governmental
revenue in the US and Britain, he pans the latter's higher taxation as interference with industry, and
clearly delineates between protective and revenue tariffs with a similar message:

"In the United States, the revenue of the federal government is derived exclusively
from sales of land and duties on imports. For a long period the latter were light, and
as smuggling was not apprehended, trade was subjected to few regulations. Since
the adoption of the high tariff system, it has been found necessary to adopt rules
much more strict (to secure collection), and exchanges have been subjected to
inspections that were formerly deemed unnecessary. This is, however, the only
case in which any interference exists, and will be reduced as the tariff is gradually
brought down to a mere revenue system." (113)

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