Henry Carey Essay, Research Paper Henry Charles Carey (1793 B 1879) One of the most highly regarded and best known economist of the early eighteen hundreds was Henry Carey. Of all the many American economists in the first half of the nineteenth century, the best known, especially outside of America, was Henry Carey.
Henry Carey Essay, Research Paper
Henry Charles Carey
(1793 B 1879)
One of the most highly regarded and best known economist of the early eighteen hundreds was Henry Carey. Of all the many American economists in the first half of the nineteenth century, the best known, especially outside of America, was Henry Carey. Being born in Philadelphia, Carey’s views were that typically of an American. The manor, in which he opposed other economists and established his own theories, distinguished him as a prominent figure not only in his hometown of Philadelphia but in the entire United States. He rejected Malthus and Ricardo on several grounds and accused them of deviating from the views of Adam Smith. His belief in the revision of economic thought stemmed from the fact that early classical thinking, developed in Europe, was not suitable for a newly discovered country such as the United States which consisted of abundant land and scarce labour. These aspects will be viewed in detail while examining Carey’s principle theories. However, before tackling the unprecedented theories of Carey, a description of the man’s life and career, and writings should first be examined.
The Life of Henry Carey
He was born in 1793 in Philadelphia. He was the son of a self-made Irish immigrant, Mathew Carey. His father, whom was a leader in early American economic thinking, emigrated from Ireland on account of the political upheaval during the time. Henry Carey was also self taught and in 1821 at the age of twenty-eight assumed ownership of his fathers printing press. Carey who was a largely self-educated man, retired from active business at forty-two in order to devote the rest of his life to his literary career. Carey was known for his enormous published output. Many believe his quantity took away from the meaning he was trying to corroborate because it was rambling, repetitious, and diffused the message. The publications included thirteen books, about three thousand pages of published tracts, and perhaps an equal quantity of newspaper articles, editorials and correspondence covering economic and political topics. Here is a list of Carey=s most creditable works: Essay on the Rate of Wages (1835), The Principles of Political Economy (1837-1840), The Credit System of France, Great Britian and the United States (1838), An Answer to the Questions: What Constitutes Currency? What are the Causes of its Unsteadiness? And what is the Remedy? (1840), The Past, Present, and the Future (1848), The Harmony of Interest (1851), The Principles of Social Science (1857-1860), and The Unity of Laws as Exhibited in the Relations of Physical, Social, Mental, and Moral Science (1872). Carey after retiring from the printing press acquired a great deal of fortune, in which he invested in a wide range of enterprises, including coal mines, paper mills, gas companies, and real estate. From this one can see that Carey not only wrote but also was involved in the economy. He worked for the printing press as well he invested in the economy to drive it to new levels. Due to this involvement Carey became a prominent figure in his native city and state through his voice and pen. Which were very active in all matters of public interest, he exerted considerable influence on public opinion and some on the economists of his day. Through his life, in the years of 1825, 1857, and 1859 he traveled to Europe where he met with John Stuart Mill, Covour, Humbolt Liebig, Chevalier, Ferrarra, and Bergfall. With some of them Carey had established an acquaintance with, and continued to share experiences and studies with in later years through writings. After all his travels, his works and studies lead him to become one of the leading citizens of Philadelphia, and an influential figure in the state where more than one President had sought his advise. At the time of his death, in 1879 at the age of 86, he was named as America=s most widely known private citizen at the time.
During the course of his writings the views of Carey in relation to previous economic theories and beliefs of other economists changed considerably. “Carey is a fine example of the difficulty of fitting economists into neat pigeonholes. He is at once a classical optimist, a critic of classicalism, and a protectionist.”(Newman, 96) His views toward classical school did not stem too far in his first two of the above mentioned books. However, by the time of the publication of his third book, The Past, Present, and the Future, his belief’s and views took their own course, stemming far from the classical view. By this time his criticisms of Malthus and Ricardo were becoming heavily apparent. Carey developed these views and emphasized them over and over in his succeeding books. These views are the reasoning behind them will be discussed in the following.
Carey=s Four Major Theories and Views
1) Permanent Protectionism
Inconsistencies have been apparent in Carey=s philosophies. In his early writing, earlier in his life Carey supported a more classical economic approach advocating free trade and the doctrines of Adam Smith. By 1845, however, he became an ardent protectionist. His writings reflected the protectionist and nationalist mentality developed over the years. Many of the ideas Carey wrote about in his book titled The Principles of Social Science resembled that of Freidrich List. In this book Carey attacks the industrial acts of England and instead of international divisions of labour he favors the notion of independent nationality where each country, on its own, would devote itself its own economic activity. One author, who wrote about Carey, stated that “almost all the evils in the world he attributed to international trade, and all the virtues flowed from domestic commerce.”(Oser, 235) This view was realized because foreign trade, in eyes of a protectionist, destroyed small communities and replaced them with cities that would center their economic practices on giving domestically produced items to other countries. For example, produce grown on American soil would be transported to another land, therefore the produce grown in the states would not be returned to the soils of the states. This simple fact would lead to a multitude of unfortunates including; soil exhaustion, unemployment, war and disruption. By 1951, Carey had established his theory of protection@. His book entitled AHarmony of Interest@ reflected this protectionist theory. Many of his ideas of protectionism resembled those of Freidrich List.
As international trade increases so does the in additive of transportation. During these years, the people who owned these transportation agencies would profit greatly from the use of international trade, therefore, they would have influence over the farmers. As a result the international division of labour would cause an increase in employment and neglect production. “The more people engage in transportation, the worse for society, for the transportation of goods does least to promote development of the mind or improvement of the heart”(Oser, 235). Due to the problems of delivering goods across a large distance from the grower to the buyer, the exchange of goods between them becomes slower and inconsistent. Carey even goes on to attribute the facts of fires and the costs of fire insurance with their impact on transportation and international trade. He says,
The loss thus resulting from the absence of power to develop the mineral treasures of the earth, and from the constant waste of property and of labour, is more than the total value of the merchandise received in the Union from every quarter of the world; and yet, it is policy which forbids the opening of mines, and the development of the coal and metallic ores that so much abound; and by means of which structures of every kind could be built of minerals that would set at defiance the risk of fire. (Oser, 235)
Overall the effects of free trade would be the destruction of all nations for the benefit of one. Protection, in the eyes of Carey, would assist to free agriculture from the burdens of the costs of transportation from the producers to the consumers. Unfortunately, Carey did not see the day when countries would adopt this policy, but no longer then three decades after his death Great Britian and other leading countries of the world would have implemented it. So looking back Carey had two main points on protectionism. The first was the benefit of association and the second was the necessity of returning to the earth what is taken from it. In the first point, Carey develops the powers of association, how it sustains and promotes individuality. In the second point, he states the importance of returning to the earth its fertility, its nutrients; otherwise the earth will become depleted of its harvesting ability.
2)The Ricardian Rent Theory
Carey=s opposition of the Ricardian Rent Theory is expressed in his APrinciples of Political Economy@. His main argument against the Ricardian Theory lies in the process of land cultivation. Ricardo, he says- and it is a significant sentence “had never witnessed as at the moment we do from the window at which we write, the progress of a new settlement.”(Gray, 252) Carey believed that the poorer lands were cultivated first, because the first cultivators, not having the proper tools required to clear the better soils, or to drain the lowlands, were forced to seek out the higher lands. These higher lands had relatively little timber and vegetation because the soil was thinner. These higher lands were sought out for protective reasons; protection from wild beasts, savages, and fatal fevers. As the population increased, they acquired more skills and tools, enabling the newcomers to cultivate the richer, more prosperous soils. Ricardian Theory stated the opposite. Ricardo stated that the newcomers had the first choice to the lands, hence choosing the richer soils. He also stated that as population increases, people go from better to poorer soils, and rent is based on differentials in productivity measured at the margin. This means that according to Ricardo, rents would fall, whereas under Carey, rents would rise. So as the first settlers immigrated to the states, many of them did not have tools of any kind needed for the cultivation, therefore, they would not be able to cut down trees that grow on the fertile ground . This resulted in forcing the settlers to search for barren dry unproductive soils. After sometime these infertile lands would be exhausted of their nutrient content and the farmers would have to seek new land. However, this time the population would be larger, resulting in more available labour and tools hereby allowing the farmers to cut the forest and use the rich soils beneath it. This was how Carey envisioned his theory of rent and why he believed Ricardo’s was inappropriate. He states,
The doctrine of Mr. Ricardo is that of increasing dispersion and weakness; whereas under the real laws of nature there is a tendency towards a constant increase of power of association and combination to which alone man is indebted for the ability to subjugate the more productive soils. As he descends the hills and meets his neighbor man, the efforts are combined, employment’s are dived, individual faculties are stimulated into action, property becomes more and more divided, equality grows, commerce becomes enlarged, and persons and property become more secure; and every step in this direction is but preparation for future progress.(Oser, 237)
Carey had combated Ricardo so extensively on this ground that it motivated other economists to review the whole scheme of the theory of rent. Taking American experience as an example, Carey held that the poorest land was often cultivated first, because it was the most accessible. The richer soil may be “the terror of the immigrant”(Newman, 96) because it may be overgrown by vegetation, covered with forest, or inhabited by savages or wild beasts. Thus, viewing life from the point of view of a settler in a new country, Carey is “led to deny, and indeed with vituperation and abuse, the Law of Diminishing Returns(and with it the Ricardian Law of Rent)”(Gray, 251). The end result of it was a correction and adjustment made to Ricardo’s Theory. In the end Carey did not abolish Ricardo’s Theory but advanced it to a truer meaning.
3) Theory of the Law of Harmony
Among different classes in society, there have always been conflicts and usury. Carey expands upon this usury stating its rapidness and its longevity. He remarks on that the strong have always tried to trample the weak, and later have combined to limit the power of their oppressors. He also looks at the middle groups, between consumers and producers, such as the lawyer, the broker, and the traders. Carey believed that they profit unduly at the consumers and producers expense, and hence impede the progress of society. Carey goes on to state that all classes of people are driven by profit, even at the exclusion of the consumer good. The concept can be summarized as; the harmony of classes will lead to a harmony of nations, with the love of peace becoming diffused throughout the earth. Henry Carey examines how the strong in society have always tried to dominate the weak, such as the landowners or the slave owners, at the time, which essentially robbed the services of others for their own benefit. However, Carey had suggested that the real and permanent interests of all the classes of men are really the same, although their apparent and temporary interests differ. It is explained best by this mutual cooperation existing between workers and capitalists.
Assume that a worker, using an axe, cuts more wood in a day than he can in a month without it. Suppose the capitalist who lends the workers the axe charges him three-fourths of his product for its use; the worker will still be better off than previously, notwithstanding the large proportion claimed by the capitalist as profit. (Oser, 237)
Carey goes on to say, “Individuals and nations, blinded by the idea of present profit and grandeur, pursue then to the exclusion of a common good. In the long run everybody stands to gain as society grows wealthier and more productive.”(Carey, 247) This explanation clearly demonstrates the benefits that can be achieve by both people as is the case with the axe example, where both the worker and the capitalists are both better off in the long run though cooperation.
4) Malthusian Theory of Population
Carey opposed the Malthusian Theory of population. Being of strict Catholic decent, his religious upbringing greatly influenced his outlook concerning the theory. Carey viewed the rapid growth of North American population from the same as Bastait, rather than that of Malthus. He opposed Malthus on several grounds. The first was because the Malthus theory was in contrast to God’s intentions. Carey goes on to explain this by saying,
‘Be fruitful and multiply,’ said the Lord, ‘and replenish the earth and subdue it’, and Carey adds “Can such things be? Can it be. That the creator has been inconsistent with himself? Can it be, that after having instituted throughout the material world a system, the harmony of whose parts is absolutely perfect. He has of design, subjected man, and the master of all, to laws, which must produce universal discord? Can it be, that after having given to man all the faculties required for assuming the mastery of nature, it has been a part of his design to subject him to laws in virtue of which he must become nature’s slave” (Heimann, 127)
The second argument against Malthus stems from his harmonious laws of nature. According to Carey this law suggests that as animals die the supply of carbon dioxide, needed by plants, would diminish. Therefore it will be necessary that an increase in the human race should occur. In this way, the more humans there are on earth, the more carbon dioxide will be expelled and the more vegetation will grow. However, many economists had disagreed with this aspect simply because of the uncertainty of the level of carbon dioxide that would be produced by humans and animals.
In his third argument against Malthus, Carey proposes the notion that an increase in the population would lead to an increase in wealth. In Carey’s opinion, the more hands the more producers of wealth. The greater the number of inhabitants, the greater the combinations of divisions of labour. Although this may be true to some degree, it should be stated that the labour is only one of the three elements of production. The other two elements: land, and capital can also have a detrimental effect on production.
In his fourth argument, Carey contradicts the beliefs of how Malthus presumed that the population would increase in a geometric ratio alone. He based his understanding on the examples of a grain of corn and that of a pair of rabbits. In each case, both will multiply and produce literally thousands and thousands over a period of time. This then would be geometric also. However, according to Malthus only mankind will increase geometrically and other lower life forms will only produce in arithmetic numbers only. Simply by the use of the rabbit example we can see that the Malthus theory could not be totally correct.
Lastly, Carey argued the fact that of relationships between intellectual and reproducing functions of humans. He further looks at this by stating that the population growth tends to decrease as the rate of intelligence of human’s increases. Unfortunately, Carey was unable to forward any proof of this argument but he may have well predicted the future as the advancement in human intelligence has lead to population anti-growth devices such as birth control.
The main theory implies that low-income countries are caught in a trap, which condemns the too perpetual poverty. It bases this assumption on per-capita income and on population growth rate. When per-capita income increases, population growth will follow, slowing the economy once again, only for the cycle to repeat itself perpetually. Two points can sum up all the arguments. The first being that Carey was a religious and intellectual man who viewed population trends in an optimistic fashion and the second being that he believed that human population would reach a balance environment with the supply of nature.
Henry Charles Carey had for the most part of his life good battles against several of the highest regarded individuals in the field of economics. He had undertaken great deal of study during his times of criticisms against namely that of Ricardo, Malthus, and Smith. The erroneous nature of his opposition lead to the questioning of the worthiness of Carey=s contributions to economic thought. As to the overall contributions to economic analysis made by Carey, much disagreement exists. To most economists, however, Carey=s service was rendered through his attacks on economic theory, especially the four previously mentioned ones. Nobly, he had succeeded in making new theories and proving them at most times. The end results of Carey’s contributions were a deeper understanding of some of the basic theories in economics. Carey defined the meaning of an American through his beliefs in protectionism on a world level along with his belief of laisser faire system within the country along with his optimistic views that established Carey as one of the most highly regarded person of his times, something only that today’s fellow American could even dream about, In his time he exercised great influence, though less so in his country than in America and on the Continent; for us, at least, he has now faded into comparative, insignificance, cursed by his own voluminousness and repetitiveness, and, it must be added by a rather na ve foolishness(Gray, 249). Henry Carey had ideas that were not wholly unjust; he is, above all, the supreme example of the truth that the economist reflects his environment.
Blaug, Mark. Great Economists before Keynes, New Jersey,
Humanities Press International Inc, 1986
Carey, Henry C. Principles of Social Science. Philadelphia, 1888
Gray, Alexander. The Development of Economic Doctrine,
Heimann, Eduard. History of Economic Doctrines, London,
Oxford University press, 1956
Newman, Philip C. The Development of Economic Thought.
New York, Prentice-Hall Inc, 1952
Oser, Jacob. The Evolution of Economic Thought, New York,
Harcourt, Brace and World Inc., 1963
Scott, William A. The Development of Economics, New York,
Century Company Inc., 1933
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