American School (economics)

For the related early 19th-century economic plan, see American System (economic plan).
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The American School, also known as the National System, represents three different yet related constructs in politics, policy and philosophy. The policy existed from the 1790s to the 1970s, waxing and waning in actual degrees and details of implementation. Historian Michael Lind describes it as a coherent applied economic philosophy with logical and conceptual relationships with other economic ideas.[1]

It is the macroeconomic philosophy that dominated United States national policies from the time of the American Civil War until the mid-20th century.[2][3][4][5][6][7] Closely related to mercantilism, it can be seen as contrary to classical economics. It consisted of these three core policies:

  1. Protecting industry through selective high tariffs (especially 1861–1932) and through subsidies (especially 1932–1970).
  2. Government investments in infrastructure creating targeted internal improvements (especially in transportation).
  3. A national bank with policies that promote the growth of productive enterprises rather than speculation.[8][9][10][11]

The American School's key elements were promoted by John Quincy Adams and his National Republican Party, Henry Clay and the Whig Party and Abraham Lincoln through the early Republican Party which embraced, implemented and maintained this economic system.[12]

  1. ^ "Free Trade Fallacy" New America.
  2. ^ "Second Bank of the United States" U-S-History.com.
  3. ^ "Republican Party Platform of 1860" presidency.ucsb.edu
  4. ^ "Republican Party Platform of 1856" presidency.ucsb.edu.
  5. ^ Pacific Railway Act (1862) ourdocuments.gov.
  6. ^ "History of U.S. Banking" SCU.edu Archived 2007-12-04 at the Wayback Machine.
  7. ^ ANDREWS, E. Benjamin, p. 180 of Scribner's Magazine Volume 18 #1 (January–June 1896); "A History of the Last Quarter-Century".
  8. ^ Lind, Michael: "Lincoln and his successors in the Republican party of 1865–1932, by presiding over the industrialization of the United States, foreclosed the option that the United States would remain a rural society with an agrarian economy, as so many Jeffersonians had hoped." and "... Hamiltonian side ... the Federalists; the National Republicans; the Whigs, the Republicans; the Progressives." — "Hamilton's Republic" Introduction pp. xiv–xv. Free Press, Simon & Schuster: 1997. ISBN 0-684-83160-0.
  9. ^ Lind, Michael: "During the nineteenth century the dominant school of American political economy was the "American School" of developmental economic nationalism ... The patron saint of the American School was Alexander Hamilton, whose Report on Manufactures (1791) had called for federal government activism in sponsoring infrastructure development and industrialization behind tariff walls that would keep out British manufactured goods ... The American School, elaborated in the nineteenth century by economists like Henry Carey (who advised President Lincoln), inspired the "American System" of Henry Clay and the protectionist import-substitution policies of Lincoln and his successors in the Republican party well into the twentieth century." — "Hamilton's Republic" Part III "The American School of National Economy" pp. 229–30. Free Press, Simon & Schuster: 1997. ISBN 0-684-83160-0.
  10. ^ Richardson, Heather Cox: "By 1865, the Republicans had developed a series of high tariffs and taxes that reflected the economic theories of Carey and Wayland and were designed to strengthen and benefit all parts of the American economy, raising the standard of living for everyone. As a Republican concluded ... "Congress must shape its legislation as to incidentally aid all branches of industry, render the people prosperous, and enable them to pay taxes ... for ordinary expenses of Government." — "The Greatest Nation of the Earth" Chapter 4, "Directing the Legislation of the Country to the Improvement of the Country: Tariff and Tax Legislation" pp. 136–37. President and Fellows of Harvard College: 1997. ISBN 0-674-36213-6.
  11. ^ Boritt, Gabor S: "Lincoln thus had the pleasure of signing into law much of the program he had worked for through the better part of his political life. And this, as Leonard P. Curry, the historian of the legislation has aptly written, amounted to a "blueprint for modern America." and "The man Lincoln selected for the sensitive position of Secretary of the Treasury, Salmon P. Chase, was an ex-Democrat, but of the moderate variety on economics, one whom Joseph Dorfman could even describe as 'a good Hamiltonian, and a western progressive of the Lincoln stamp in everything from a tariff to a national bank.'" — "Lincoln and the Economics of the American Dream" Chapter 14, "The Whig in the White House" pp. 196–97. Memphis State University Press: 1994. ISBN 0-87870-043-9.
  12. ^ Howe, Daniel Walker "The policies of tariff protection, federally sponsored internal improvements, and national banking that were later to be known as the “American System” took coherent shape in the years between 1816 and 1828 and were coherent with the “national” wing of the Republican party." - "The Political Culture of the American Whigs, pp. 48-49. University of Chicago Press, 1979. "J.L.M. Curry, "Confederate States and Their Constitution", The Galaxy, New York, 1874 cornell.edu".