Henry C. Carey, and his Political Economy

by Rufus W. Griswold

Henry C. Carey has been recognized through continental Europe as one of the master thinkers of our generation. It is time for him to be known in his own country. In Political Economy he has applied the methods of the Positive Philosophy, and his works exhibit the chief advances the science has made since Adam Smith published his "Wealth of Nations." They are text-books in the colleges even of Sweden and Norway, while at the University in the street next to that in which the author has his residence, books are adopted composed of ideas from empirical and nearly obsolete systems: Say and Ricardo are regarded as expositors of the last and ultimate discoveries. Let us see if this law respecting prophets cannot be changed; or if not changed, confirmed, by an exception in the case of our philosopher.

Mr. Carey was born in Philadelphia, in December, 1793. His father was the late eminent Matthew Carey, memories of whose virtues preserve about his name a thousand delightful associations. Matthew Carey was a political economist also. He wrote much, and he wrote effectively, because he taught that which was in accordance with the feelings and interests of his readers; but he was of the old school, dead now, with its professors. He disliked abstract ideas or principles, and did not trouble himself much with their investigation. The consequence was, that he made no addition to politico-economical knowledge, and left nothing by which he should be remembered except the fact that he was a consistent and ardent friend of Protection.

Ricardo left his doctrine of Rents; Malthus his principle of Population; their books are little read now, and they themselves would have been long since forgotten, but that they taught what had been taught by no others. Of the hundreds of their countrymen who have since written, scarcely one has furnished a new idea; or if such an idea can be found in the books of any one, it will not bear investigation. Many have collected facts, that are useful, and all of them have talked and written about their facts and theories; but only as empirics. One man contended on one side and another on another, and there was no standard by which to judge them. Ricardo and Malthus gave laws that would not fit the facts, and the facts were altered and suppressed to suit the laws. McCulloch taught that transportation and exchange were more advantageous than production, and Cobden that it was better to go to colonies in which rich lands were to be had cheap, than to stay at home where landlords charged high rents for the poor ones that were necessarily cultivated: and therefore that imported food would be cheaper than that which was grown at home. The result has proved that he was wrong. Food is now obtained with more difficulty than before; emigration is necessary, and the late decision in Parliament shows that Protection will be restored: as the ministry could command only the mean majority of 21.

A few years hence McCulloch will be remembered only as the compiler of a few indifferent books of reference, and Cobden as the author of much ill to the people of England. Many of these men have ideas that are sound; but they know nothing of the principles of the science they undertake to teach; and so they are continually making blunders. Of all the French writers of the first forty years of this century, only one, Jean Baptiste Say, has lived to the middle of it, and his work is only a mass of error in an imposing form.

This may be called sweeping criticism; but time will prove that it is just. We need principles, as the astronomers did before Copernicus, Kepler and Newton, gave them the laws which govern the movements of the universe. Others observed facts and wrote treatises, but only these names have lived. Ricardo and Malthus furnished what they believed to be the great natural laws in regard to land and the sources of its value; the relation of the laborer and the capitalist; and of population. Their names are still familiar, but their theories are shattered by the assaults of critics; they will be forgotten, and their places will be occupied by those of the great author of whose works we propose to write. Ricardo and Malthus will be to Carey as Ptolemy to Copernicus.

From 1803, a period of almost fifty years, since Ricardo published his doctrine of Rent, there has not been even an attempt, except Carey's, to add any thing to political economy. Senior, Whateley, and a thousand others, have been disputing about words, while as many others have been attacking Malthus and Ricardo; but no one has attempted to discover laws, to take the place of those which were assailed. Of the supporters of these writers, every one has been compelled to admit that their laws did not cover the facts, and to interpolate accommodating passages. John Stuart Mill, in his recent work, has done this even more largely than his predecessors, and so furnished additional proof that their laws were not laws, but mere anarchy. Ricardo had to leave a place of escape for difficult facts and his successors have since found themselves obliged to open so many new ones, that his laws are now like sieves.

The period was propitious for a discoverer. The opinion of D'Alembert that the steps of Civilization were to be taken in the middle of each century, was to be confirmed by a new illustration.

Mr. Carey's father was a practical man; all his children were trained to affairs; thus they became observers. The students of books are rarely creators in science. Truth is most likely to be evolved in the school of experience. From the age of seven years until he was twenty-one, Mr. Carey was in his father's bookstore. From 1821 to 1838, he was a partner in the important publishing house of Carey, Lea & Carey, and Carey & Lea; but in this period he passed one season abroad, we believe immediately after his marriage with a sister of Leslie the painter. The determination of his mind was already fixed, when his retirement from business enabled him to devote his faculties entirely to the science with which his name will for ever be associated.

Mr. Carey's first book—An Essay on the Rate of Wages—was published in 1836, and was soon after expanded into The Principles of Political Economy, which appeared in three octavo volumes in 1837—1840.

Before proceeding to give an account of this performance, we will more particularly show what was, at the date of its publication, the condition of the science it was designed to illustrate. Mr. Malthus had taught that population tended to increase faster than food, and that so irresistible was this tendency, that all human efforts to restrain the number of men within the limits of subsistence were vain. It was a great "law of nature," and it was of little consequence, therefore, how fast food might be increased, since the only effect must be to stimulate population, which, in the end, was sure to outrun the means of living. The impression which this work produced has been briefly noticed in what we have written in connection with Mr. Alexander H. Everett's reply to it, printed in London and Boston in 1822. The doctrine was a convenient one, for it relieved the directors of affairs from the charge of causing, or suffering, the poverty and wretchedness by which they were surrounded.

Soon after this, Mr. Ricardo attempted to explain by what means the supply of food was limited. He taught that men always commenced the work of cultivation on the most fertile soils, capable of yielding, say, one hundred quarters for a given quantity of labor; but that as population increased, it became necessary to resort to poorer soils, yielding but ninety quarters, and that then the owner of the first could command as rent ten quarters. With a further increase, lands of a third quality, yielding but eighty quarters, were brought into use, and then the first and second would command as rent the whole difference, say, twenty quarters for the first, and ten quarters for the second. The payment of rent is thus regarded, in this school, as an evidence of constantly diminishing reward of labor, resulting from the increase of population in consequence of which it is necessary to extend the area of cultivation. With each step of its progress, the owner of the land takes a larger proportion of this constantly decreasing product, leaving a smaller one to be divided among those who apply either labor or capital to cultivation, thus producing a constant increase in the inequality of human condition. The interests of the landlord are in this manner shown to be for ever opposed to those of all the other portions of society. Rent is supposed to be paid because land has been occupied in virtue of an exercise of power and not because the owners have done any thing to entitle them to it. Here we see the germ of that discord which everywhere in Europe exists between the payers and receivers of rent. The annual fund from which savings can be made is held to be continually diminishing, the poor becoming poorer as the rich grow richer. The tendency to increase is more powerful in population than in capital, and the natural result must be that "wages will be reduced so low that a portion of the population will regularly die of want."

The effect of the promulgation of these principles, upon the science of which they were asserted to be the basis, was curious. It was clear that increase of population led to famine. It was equally clear that increase of wealth tended to the extension of cultivation over inferior soils, with constantly decreasing returns to labor. Nevertheless, the political economist was everywhere surrounded by facts showing that the condition of man improved as numbers increased, and as cultivation was extended. With lessened rewards of toil there should be deterioration of moral condition, and abridged facilities for intellectual cultivation, but it was incontestable that men were more moral and better instructed than in any previous centuries. The increasing disproportion between the share of the landlord and that of the laborer was calculated to increase the inequality of condition, and yet it was not to be doubted that the two were nearer together than they were in the days of Elizabeth or of Henry VIII. The fact and the theory were always at variance with each other, and hence resulted a determination to limit the science to the consideration of wealth alone, excluding all reference to social condition. Mr. McCulloch therefore defined Political Economy as the Science of Values, and Archbishop Whately desired to change the name to Catallactics, or the Science of Exchanges. The whole duty of the teacher of this new science was held to be that of explaining how wealth might be increased, allowing "neither sympathy with indigence, nor disgust at profusion nor at avarice; neither reverence for existing institutions, nor detestation of existing abuses; neither love of popularity, nor of paradox, nor of system, to deter him from stating what he believed to be the facts, or from drawing from those facts what appeared to him to be the legitimate conclusions."

Such was the Political Economy then, and such is that which is now, taught in the schools of England. The consequences are seen in the manner in which the poor people of every part of the United Kingdom are being expelled from the little holdings to which they have been reduced by a system of unbounded public expenditure, and the contemptuous tone in which the common people are spoken of in all their journals. Charity is denounced as tending to promote the growth of population. Marriage among the poor is regarded as a crime, and farmers are regarded as participant in crime for giving employment to men with families in preference to single men. But the system itself was an enormous wrong against nature. Mr. Carey entered the lists against it, with the earnestness and confidence inspired by a conviction that he contended for humanity.

His book commences with a single elementary proposition, that man desires to maintain and improve his condition, whether physical, moral, intellectual, or political: and the object of it is to show, that the theories of Mr. Malthus and Mr. Ricardo are in direct opposition to the universal fact, and therefore cannot be regarded as natural laws. On the contrary, he shows that food has always grown faster than population, and that the power to obtain subsistence has always increased most rapidly in those countries, and at those times, in which population has most rapidly increased, and in which cultivation has most rapidly extended over those soils denominated by Mr. Ricardo inferior. The error of all these writers is shown to be in taking quantities instead of proportions, and it is the law of proportions that constitutes the novel feature of this work. Ricardo and Malthus assert that land, labor, and capital are the agents of production, and are subject to different laws, all tending to produce contrariety of interests, and that the reason why such is the case is that land owes its value—or power to command rent for its use—to monopoly, while capital is the accumulated product of labor. Mr. Carey, on the contrary, shows, by a vast variety of facts, that land owes its value to labor alone, and that its selling price is invariably less than would purchase the quantity of labor required to induce its present condition were it restored to a state of nature. It is, therefore, like steam-engines, mills, or ships, to be considered as capital, the interest upon which is called rent, and it is subject to the same laws as capital in any other form. With the growth of wealth and population, the landlord is shown to be receiving a constantly decreasing proportion of the product of labor applied to cultivation, but a constantly increasing quantity, because of the rapid increase in the amount of the return as cultivation is improved and extended. So it is with the capitalist. The rate of interest falls as cultivation is improved, and capital is accumulated with greater facility, and the capitalist receives a smaller proportion; but the quantity of commodities obtainable in return for the use of a given amount of capital increases, and with every change in that direction there is shown to be an increasing tendency to equality and to improvement of condition, physical, moral, intellectual, and political.

According to the system of Mr. Ricardo, the interests of the land owner and laborer, the capitalist and the employer of capital, are always opposed to each other. Mr. Carey, on the contrary, proves, and we think most conclusively, that "the interests of the capitalist and of the employer of capital are thus in perfect harmony with each other, as each derives advantage from every measure that tends to facilitate the growth of capital, and to render labor productive; while every measure that tends to produce the opposite effect is injurious to both."

The entire novelty of these views rendered it necessary that they should be supported by a great body of facts, and Mr. Carey therefore furnished an examination of the causes which have in various countries, particularly India, France, Great Britain, and the United States, retarded the growth of wealth—demonstrating that they were to be found in the great public expenditure for the support of fleets and armies, and the prosecution of wars, the natural results of a state of things in which the few govern the many, taxing them at their will; and that the remedy was to be found in that improvement of political condition which should enable men to govern and to tax themselves, doing which they would be disposed to remain at peace.

That man may be enabled to improve his physical condition, combination of effort is shown to be necessary, and that tends to increase with the increase in the density of population. Therewith comes increased security of person and property, and increased respect for the rights of others, tending to promote the further increase of wealth, and to enable men to devote more time to the cultivation of mind. Improved mental condition enables men to apply their labors more productively, and thus obtain better subsistence from a diminished surface, facilitates combination of action, and increases the growth of wealth. With its growth the proportion of the laborer increases, and that of the landlord or other capitalist decreases, and the power of the former to govern himself, and to tax himself, grows steadily with the growth of wealth and population; and thus we have physical, moral, intellectual and political improvement, each aiding, and aided by, the other.

It will be seen from this brief summary that the field occupied is a most extensive one, more so than that of any similar work that has been written. The views are presented with great distinctness and force, and illustrated throughout by numerous facts drawn not only from the four countries principally referred to, but from Italy, the Netherlands, Norway, Sweden, Switzerland, &c. It is one of the chief distinguishing merits of the work, that each part of it, while complete in itself, has that relation to the other which belongs to the divisions of a whole, in which all things are so interblended and harmonious as to produce a cumulative and finally perfect effect; while in the various systems presented to us by Europe, every part is in conflict with every other.

In denying Mr. Ricardo's theory of the occupation of the earth, Mr. Carey did not undertake to present any by himself, but this he has done in his more recent performance, The Past, the Present and the Future, published in Philadelphia in 1848. In this original and masterly composition, he has shown that the law is in direct opposition to the principle announced by Mr. Ricardo, and since adopted in the English school, and to some extent in France and in this country. In the infancy of civilization, man is poor and works with poor machinery, and must take the high and poor soils requiring little clearing and no drainage; and it is only as population and wealth increase, that the richer soils are brought into cultivation. The consequence is, that in obedience to a great law of nature, food tends to increase more rapidly than population, and it is only by that combination of effort which results from increasing density of population that the richer soils can be brought into activity. The truth of this is shown by a careful and particular account of the settlement of this country, followed by a rapid sketch of the occupation of Mexico, the West Indies, South America, Great Britain, France, Italy, Greece, India, and the Islands of the Pacific, illustrating and confirming the position that the poor lands at the heads of streams, or the small and rocky islands, are first chosen for cultivation, while the lower and richer soils are left unimproved for want of the means which come with growing wealth and population. Mr. Ricardo's theory is then examined in all its parts, and shown to be entirely opposed to the whole mass of facts presented in a rapid review of the course of events in the different portions of the world, while the exceptions made by him for the purpose of providing for the infinite number that could not be brought under his general law, are shown to be themselves the law; and that such is the case is now admitted by some of the most eminent economists of Europe.

With the downfall of Mr. Ricardo's hypothesis of the occupation of land, disappears the base on which rests the celebrated theory of Mr. Malthus—a theory which has been largely discussed in this country by Mr. Everett and others, and which is examined at length from his point of view by Mr. Carey, who shows that everywhere increase of population has led to the cultivation of the lower and richer soils, followed by increase in the facility of obtaining food, while depopulation has everywhere been marked by the retreat of cultivation to the hills; a truth which he illustrates by numerous instances.

He next surveys the circumstances attending the progress of wealth. It is held by the English economists that capital, applied to land, must necessarily bring diminishing profits, because applied to a machine of constantly decreasing powers; and that, therefore, manufactures and trade, steam-engines and ships, are more profitable than agriculture; whereas, Mr. Carey shows that land is a machine of constantly increasing capacities, and that the only manner in which machinery of any description is beneficial, is by diminishing the labor required for converting and transporting the products of the earth, and permitting a larger quantity to be given to the work of production. The earth is the sole producer, says Mr. Carey, and man merely fashions and exchanges her products, adding nothing to the quantity to be converted or exchanged, and the growth of wealth everywhere is shown to be in the ratio of the quantity of labor that can be given to the cultivation of the great machine bestowed on man for the production of food and wool. This leads to an examination of the British system, the object of which is shown to have been that of compelling the people of every part of the world to bring to her their raw products to be converted and exchanged, thus wasting on the road a large portion of them, and all the manure that would result from their home consumption, the consequence of which is shown to be the exhaustion of the land and its owner. The broad ground is then taken that the products of the land should be consumed upon the land, and that nations grow rich or remain poor precisely as they act in accordance with, or in opposition to, that view. Mr. Carey is a free-trader. In his first book he advocated the British doctrine of diminished duties, as the means of bringing about free trade. In his Past and Present he admits his error, and shows that the protective system was the result of an instinctive effort at the correction of a great evil inflicted upon the world by British legislation, and that the only course towards perfect freedom of trade is to be found in perfect protection.

The effect of increasing wealth and population resulting from the power to cultivate the richer soils, in bringing about the division of land and the union of man is then shown, and illustrated by examples drawn from the history of the principal nations of the world, ancient and modern; and here the European system of primogeniture is examined, with a view to show that it is purely artificial, and tends to disappear with the growth of wealth and population. This leads to the discussion of the relations of man to his fellow-men, which are shown to tend to the establishment of equality wherever peace is maintained, and wealth and population are allowed to grow; and to inequality, with every step in the progress of war and devastation.

Man himself next appears on the scene. Mr. Malthus, Mr. Ricardo, and all others of the English School, represent him as the slave of his necessities, working because he fears starvation. Mr. Carey, on the contrary, shows him to be animated by hope, and improving in all his moral qualities, precisely as by the growth of wealth and population—the results of peace—he is enabled to clear and cultivate the rich soils of the earth.

Thence we pass to the relations of man and his helpmate, which are shown to improve precisely as do those of man to his fellow-man, as the rich soils are brought into cultivation. Man and his family follow, and the same improvement, under the same circumstances, is shown to take place in the relations of parent and child.

Concentration, or the habit of local self-government, so strikingly illustrated in New-England, is next examined in contrast with centralization, as exhibited in England and France, and its admirable effects in tending to the maintenance of peace are fully exhibited. The various systems of colonization next pass in review, and give occasion for an examination of the various causes that brought negro slavery into this country, and the reason why it is here alone that the race has increased in numbers. India and Ireland, and the devastating effects of the colonial system, Annexation, and Civilization, furnish the materials for the succeeding chapters, and give occasion—the last particularly—for the expression of opinions much at variance with those taught by Guizot and others of the most distinguished men of our day. Such are the Past and Present. The closing chapter is the Future, and contains an examination of many remarkable facts now presented to our view by our own country, produced by the existence of the unnatural system fastened upon the world by England, and to be remedied by the adoption of an American policy, having for its object that of enabling men to live together and combine their exertions, instead of flying from each other, leaving behind rich lands uncultivated, and going to Texas or Oregon to begin the work of cultivation on the poorer ones. "With each step in the progress of concentration his physical condition would improve, because he would cultivate more fertile lands, and obtain increased power over the treasures of the earth. His moral condition would improve, because he would have greater inducements to steady and regular labor, and the reward of good conduct would steadily increase. His intellectual condition would improve, because he would have more leisure for study, and more power to mix with his fellow-men at home or abroad; to learn what they knew, and to see what they possessed; while the reward of talent would steadily increase, and that of mere brute wealth would steadily decline. His political condition would improve, because he would acquire an increased power over the application of his labor and of its proceeds. He would be less governed, better governed, and more cheaply governed, and all because more perfectly self-governed."

The field surveyed by Mr. Carey in the Past and Present is a broad one—broader than that of any other book of our time—for it discusses every interest of man. The ideas are original—whether true or not, they are both new and bold. They are based upon a great law of Nature, and it is the first time that any system of political economy has been offered to the world that was so based. The consequence is, that all the facts place themselves, as completely as did the planets when Copernicus had satisfied himself that the earth revolved around the sun.

More recently, in his Harmony of Interests, Mr. Carey has published a full examination of the great question of commercial policy, with a view to show that protection, as it exists in this country, is the true and only road to free trade. He has brought to the illustration of this important doctrine a mass of facts, greater, probably, than was ever before displayed in support of any position in political economy. It commences with an examination of our whole commercial policy for the last thirty years, and shows the effect of protection in increasing the sum of production and consumption, the means of transportation, internal and external, and the influx of population from abroad, always an evidence of the increased productiveness of labor. In this work it is shown conclusively, that shipping grows with protection, because protection tends to promote immigration, or the import of men, the most valuable of commodities, and thus to diminish the cost of sending to market the less valuable ones, grain, tobacco, and cotton. The question is examined in every point of view—material, moral, intellectual, and political; and the result arrived at is, "that between the interests of the treasury and the people, the farmer, planter, manufacturer and merchant, the great and little trader and the ship-owner, the slave and his master, the land-owners and laborers of the Union and the world, the free-trader and the advocate of protection, there is perfect harmony of interests, and that the way to the establishment of universal peace and universal free trade, is to be found in the adoption of measures tending to the destruction of the monopoly of machinery, and the location of the loom and the anvil in the vicinity of the plough and the harrow."

In addition to the works I have named, Mr. Carey has published two others, on the Currency—the larger of which is entitled Credit System in France, England, and the United States. Their object is to show, that there is a very simple law which lies at the root of the whole currency question, and that by its aid the revulsions so frequently experienced may be perfectly accounted for. That law is perfect freedom of trade in money, whether by individuals or associations, leaving the latter to make their own terms with their customers, and to assume limited or unlimited liability, as they themselves may think most expedient. In a detailed review of the operations of several of the principal nations, and of all the States of this Union, it is shown that the tendency to steadiness in the quantity, and uniformity in the quality, of currency, is in the exact ratio of freedom, while with every increase in the number or extent of restrictions, steadiness diminishes and insecurity increases. The views contained in this work are now adopted by some of the most eminent writers in France. They constitute the basis of a recent and excellent work by M. Coquelin, who quotes largely from that of Mr. Carey, declaring that our countryman has, "in the investigation of causes and effects, succeeded better than the English inquirers," and had, as early as 1838, "clearly shown the primary causes of the perturbations recurring almost periodically in commerce and currency."

Since these paragraphs were written, Mr. Carey has commenced the publication of a series of Letters to Mr. Walker, the late Secretary of the Treasury, in which he promises more largely and satisfactorily than heretofore to indicate and vindicate his opinions upon the subject of Trade. They are likely to have a powerful influence upon affairs, being of that class of compositions which the mind receives with astonishment that it had not anticipated their truth.