Mathew Carey Revived Hamiltonian Economics

By Nancy Spannaus

June 19, 2019—The seminal role of Mathew Carey (1760-1839) in promoting and advancing the American System of political economy is a long and important story, mostly obscured in the United States. In this post, I concentrate on re-introducing him, with emphasis on one crucial aspect which is relevant to our situation today: his revival, by name, of the economic principles of Alexander Hamilton.

Mathew Carey Revived Hamiltonian Economics

Mathew Carey

Carey, an Irish revolutionary brought to the colonies in 1784 under the sponsorship of Benjamin Franklin, played his critical role primarily as a publisher and pamphleteer. His American Museum, a monthly magazine published from January 1787 to December 1792, published many of the crucial documents of that era—from Thomas Paine’s Common Sense, to the U.S. Constitution to Hamilton’s Report on Manufactures. His publishing company (M. Carey & Sons, Carey & Lea) lived on to print works by prominent American authors, numerous versions of the Bible, his own books on political economy, and highly popular novels, such as those of James Fenimore Cooper.

While he was publishing, Carey also served as an organizer and promoter of various societies for manufacturing in the Philadelphia area.[1]

Although he was always a supporter of Hamilton’s policies, especially the National Bank and his perspective on manufactures, Carey’s political affiliations were with the Democratic-Republicans, as they were called in the 1790s. As the political warfare between the Federalists and the Democratic-Republicans accelerated, especially during the War of 1812, Carey found himself alarmed at the potential for the outbreak of Civil War between New England and the South. In November 1814, he addressed this danger in a pamphlet entitled “The Olive Branch: or, Faults on Both Sides, Federal and Democratic, A Serious Appeal on the Necessity of Mutual Forgiveness and Harmony.” That 336 (!) page document eventually had 10 different editions; more than 100,000 copies were circulated. Its impact was correspondingly enormous.

Carey took extremely seriously President Washington’s Farewell Address, and the need for maintaining the unity of the nation. He excoriated both parties, but especially the Federalists of that decade, for losing sight of Washington’s perspective, and thus endangering the nation’s survival. The first Olive Branch exhaustively documents the failures and outright evils, even treason, committed by the parties, through the reprinting of letters, petitions, and other primary sources.

Mathew Carey Revived Hamiltonian Economics

The Tom Thumb, the B&O Railroads premier engine, developed in the 1820s. Rail was an industry Mathew Carey promoted.

In later editions, however, Carey turned to proposing a solution to the divide, one that he found in the political economy of Alexander Hamilton.

I have chosen three excerpts from Carey’s writings, to illustrate his economic argument. The first comes from the first Olive Branch, in Chapter II, the section in which he lists the errors of the Democratic-Republicans. The second two come from essays Carey wrote in 1819 for the Philadelphia Society for the Promotion of National Industry[2]. The argument in the 1819 essays lay out the approach which he took in his 1820 document, The New Olive Branch, and his subsequent 1822 book, Essays on Political Economy.

The Bank of the United States

(From The Olive Branch, Chapter II: Errors of the Democratic Party, 1814)

Among the great sins of the democratic party, must be numbered the non-renewal of the charter of the bank of the United States. This circumstance injuriously affected the credit and character of this country abroad—produced a great deal of stagnation, distress, and difficulty at home—and is among the causes of the existing embarrassments and difficulties of the pecuniary concerns of the country. Were it now in existence, its capital might readily at any time be increased by congress, 10, 12, 30, or 40 millions, so as to aid the government most effectually, and support the national credit. …

Address No. I to the Philadelphia Society

(from an essay written in Philadelphia, March 27, 1819

… Political economy shall be the subject of these essays. In its broad and literal sense, it may be fairly styled the science of promoting human happiness; than which a more noble subject cannot occupy the attention of men endowed with enlarged minds, or inspired by public spirit.

It is to be regretted that this sublime science has not had adequate attention bestowed on it in this country, And unfortunately, so many contradictory systems are in existence, that statesmen and legislators, disposed to discharge their duty conscientiously, and for that purpose to study the subject, are liable to be confused and distracted by the unceasing discordance in the views of the writers.

Benjamin Franklin, Carey’s original sponsor, was a preeminent spokesman for the political economy Carey came to espouse.

It is happily nevertheless, true, that its leading principles, which safely conduct to the important and beneficent results, that are its ultimate object, are plain and clear; and, to be distinctly comprehended, and faithfully carried into effect, require no higher endowments than good sound sense and rectitude of intention. …

[Carey then proceeds to take on and demolish what he calls the “Delphic oracle of political economy” of the time, Adam Smith. His summary of his conclusions reads, in part:]

To avoid prolixity, we are obliged to postpone the consideration of other positions of Dr. Smith on this subject; and shall conclude with a statement of those maxims of political economy, the soundness of which is established by the experience of the wisest as well as the most fatuitous nations of the earth.

  • Industry is the only sure foundation of national virtue, happiness, and greatness; and in all its useful shapes and forms, has an imperious claim on governmental protection.
  • No nation ever prospered to the extent of which it was susceptible, without due protection of domestic industry.
  • Throughout the world, in all ages, wherever industry has been duly encouraged, mankind have been uniformly industrious. …
  • Free government is not happiness. It is only the means, but, wisely employed, is the certain means of insuring happiness.
  • The interests of agriculture, manufactures, and commerce, are so inseparably connected, that any serious injury suffered by one of them must materially affect the others.
  • The home market for the productions of the earth and manufactures, is of more importance than all the foreign ones, even in countries which carry on an immense foreign commerce.
  • It is impossible for a nation, possessed of immense natural advantages, in endless diversity of soil and climate—in productions of inestimable value—in the energy and enterprize of its inhabitants—and unshackled by an oppressive debt—to suffer any great or general distress, in its agriculture, commerce, or manufactures (wars, famines, pestilence and calamities of seasons excepted) unless there be vital and radical errors in its system of political economy….

Address No. XII to the Philadelphia Society

(From an essay written in Philadelphia, June 24, 1819)

We have presented for your consideration, the essence of the able and luminous report of Alexander Hamilton, the Secretary of the Treasury, on manufactures. The principles contained in that admirable state paper, are the principles of political economy, that has been practised by those statesmen, whom the concurrent testimony of ages, have pronounced the most wise; and have constituted the policy of every nation, that has advanced in civilization; in which the principles of free government has been developed; or which has grown in wealth and power.

Alexander Hamilton, in a painting by John Trumbull.

Did it comport with the design of these essays, it would be no difficult task to establish, by historical references the facts; that the amelioration of society; the evolution of those just rights, which are the inheritance of every individual; and the weight and influence of the people in their government, had their origin in the establishment of manufacturing industry. With its progression, have they progressed; and by the diffusion of wealth through every class of the community, which is its necessary concomitant, have been diffused civilization and knowledge. The principles by which these important results have been effected, we shall shortly elucidate.  But other considerations first invite attention.

The arguments, by which Mr. Hamilton has sustained the principles he advocated, are lucid and conclusive. We believe them to be irrefutable. At least, we have not as yet met with any opposing writers, who has shaken one of the positions he advanced. Those diversified combinations, which grow out of, and affect all human transactions, did not escape his penetration. They are too commonly overlooked by theorists, who intent on general principles, disregard the minuter circumstances, that arise out of their very action, and frequently render them impracticable in operation, however just they may appear in themselves.

In no science, are the general maxims of mere theorists more delusive, and more to be distrusted, than in political economy…

Let is not be presumed, that we are influenced by any feelings of political partiality, in favour of Mr. Hamilton. Most of those, who thus tender the tribute of their applause to his merits as a statesman, and thus highly appreciate this particular fruit of his labours, were, and continue to be, the decided opponents of his political principles. It is bigotry alone, that denies or would obscure merit in those beyond the pale of its own belief, in church and state. To this feeling, we wish to have no claim, and while we confess a contrariety of sentiment on some essential points, we would not withhold our acknowledgment of the brilliancy of the genius, the extent and solid nature of the acquirements, and the strength of intellect, that distinguished Alexander Hamilton. …

And Today?

The crisis besetting the United States in the period after the War of 1812 was serious, but it is dwarfed by our crisis today.  In my view, Carey is right: These problems cannot be solved without adopting the correct system of political economy.

Carey recommended those principles crafted by Alexander Hamilton to resolve the crises of his day. Nicholas Biddle, Henry Clay, John Quincy Adams, and eventually Abraham Lincoln did indeed pursue them—to our lasting benefit as a nation. I recommend the same, for today.

[1] Peskin, Lawrence A., Manufacturing Revolution, The Intellectual Origins of Early American Industry. Johns Hopkins University Press, Baltimore and London, 2003, passim.

[2] These excerpts come from The Civil War and the American System, America’s Battle with Britain, 1860-1876, by Allen Salisbury, Campaigner Publications, Inc., New York, 1978.