Protectionism

The principle of free trade was virtually inscribed on the Union Jack after 1845, but rhetoric waved far above reality. Britain not only maintained tariffs on a number of important goods until the last few years of the nineteenth century; its actual policies were, in some respects, more protec­tionist than those of France.²⁷ The United States, by contrast, both preached and practiced tariffs.

Like the German economist Friedrich List, eager to promote industrial­ization in his own country, American political economists defended the protectionist policies that their British mentors labeled heresy. The influen­tial and prolific Henry Carey had few original ideas, and his reasoning was contradictory at times. Still, he outlined a passionate critique of both Malthus and Ricardo. If America needed anything, in his view, it was more children and more immigrants. Land was abundant, at least in the West, and labor was scarce. In the absence of demographic pressures, there was no reason that wages could not rise along with labor productivity.

In England, landlords were, for the most part, men who inherited their wealth. In the United States, land was available to those with the energy, enterprise, and capital to claim it. Carey rejected the Ricardian theory of rent, the notion that landlords were simply claiming a portion of a surplus others had created. Land was not a completely non-produced good; invest­ments in its clearing and improvement created a capital asset, which, like any other, offered a rate of return. Landlords, therefore, were no different than capitalists.

The only dissonance in Carey's intellectual world resulted from the dislocating effects of free trade. Carey went well beyond familiar arguments in favor of protection to argue that international trade could subvert the social order by separating producers from consumers, breaking the bonds of community and trust. Rhetorically, he sought to reconcile the competing doctrines of two Founding Fathers: Hamilton had argued that manufactur­ing would bring prosperity. Jefferson had insisted that family farms and small towns should be protected. Carey believed that protectionism could reconcile these goals. It was as though he hoped for capitalism only within countries, not among them.

Unable to challenge the logic of comparative advantage, Carey couched his argument in moral and cultural terms. He claimed that free trade would undermine what Smith had termed the moral sentiments. Malthus and Ricardo were urging the pursuit of self-interest at the expense of social responsibility. Carey warned that Britain had become a cold-hearted country dominated by the new religion of political economy which, thank­fully, had not fully displaced Christian ideals: ‘‘That any feelings of kindness towards those who are so unfortunate as to be poor should still remain in England is due to the fact that those who teach it [political economy]have not in their doctrine sufficient faith to practice what they preach.''²⁹

Protection would indeed raise the prices of imports and perhaps inhibit demand for exports. But it would also raise wages, attract immigrants, and promote industrialization. Furthermore, he went on at length, it would benefit women in particular, by reducing the temptation to men to seek their fortunes on their own. It was policies of free trade, he argued, that had emptied men from the Highlands of Scotland and delivered them to the deserts of Australia, leaving women behind. Carey bewailed the tilted sex ratios of the Old World and bemoaned the deterioration of men's character when deprived of civilizing female influence. When ‘‘commerce is king,'' he wrote, describing the horrors of poverty and prostitution in London, his female subjects suffer.³⁰

Like many others who rejected the march of liberal individualism, Carey emphasized the economic importance of families—the sites where labor power was produced and maintained. Influenced perhaps by Robert Owen (see Chapter ιι) he pointed out that life expectancy itself had economic implications: ‘‘Of all machines, the most costly to produce is Man.''³¹ Machines could be programmed to pursue their own self-interest. If men ever programmed themselves that way, women and the family would be endangered. Carey concluded that the state should protect the natural harmony of interests from such unnatural disruption.