Henry Charles Carey (December 15, 1793 – October 13, 1879) was an American publisher, political economist, and politician from Pennsylvania. He was the leading 19th-century economist of the American School and a chief economic adviser to U.S. President Abraham Lincoln and Secretary of the Treasury Salmon P. Chase during the American Civil War.
Carey's central work is The Harmony of Interests: Agricultural, Manufacturing, and Commercial (1851), which criticizes the system of laissez faire capitalism and free trade expounded by Thomas Malthus and David Ricardo in favor of the American System of developmentalism through the use of tariff protection and state intervention to encourage national self-sufficiency and unity. Carey was also a critic of the practice of slavery from an economic perspective. His work on protective tariffs was largely influential on the early Republican Party and United States trade policy through the start of the 20th century, and his views on banking and monetary policy were adopted by the Lincoln administration in its issuance of paper fiat currency as legal tender.
Early life Carey was born in Philadelphia, Pennsylvania on December 15, 1793.
His father, Mathew Carey (1760–1839), was a native of Ireland and an influential economist, political reformer, editor, and publisher whose patrons included Benjamin Franklin and the Marquis de Lafayette. He founded a publishing firm, which soon became among the leading firms in Philadelphia and the young United States. Among his many writings was Essays on Political Economy (1822), one of the earliest American treatises favoring Alexander Hamilton's idea of protection and its use in the promotion of American industry.
Carey began working at his father's firm at only twelve years old. At the firm, Carey read most of the books selected for publication, substituting for a formal college education. In 1812, he traveled to Raleigh, North Carolina as part of his business for the firm. He was elevated to partner alongside his father in 1814.
In 1819, he married Martha "Patty" Leslie, the sister of Charles Robert Leslie and Eliza Leslie. They adopted one daughter.
Publisher On January 1, 1822, Carey, with Isaac Lea (1792–1886)], formed a co-partnership, H. C. Carey & I. Lea. Isaac Lea, on March 8, 1821, in Philadelphia, married one of H.C. Carey's sisters, Frances Anne Carey (1799–1874). On April 10, 1927, when Henry's younger brother, Edward Lawrence Carey (1805–1845), became a partner, the firm's name changed to Carey, Lea & Carey. The firm went on to become the largest publishing house in the United States.
Carey took little formal interest in economics, tacitly accepting the market doctrines of Jean-Baptiste Say and of his Philadelphia associates, Condy Raguet, Nicholas Biddle, and Charles Pettit McIlvaine who were active believers in free trade doctrine.
In 1824, Carey established the common method of trade sales, a medium of exchange between booksellers, which lasted through his life. Economist In 1835, Carey read the published 1829–30 lectures of Nassau William Senior titled The Rate of Wages and The Cost of Obtaining Money and published his refutation Essay on the Rate of Wages, with an Examination of the Differences in the Condition of the Laboring Population throughout the World. Carey agreed with Senior's principles and main propositions but criticized Senior's failure to adjust for real wage rates. He remained an advocate of free trade in the essay, writing that "Laissez nous faire is the true doctrine it is now so fully understood that the true policy of the United States is freedom of trade and action, that there will be every day less disposition to interfere with it." Nevertheless, his intensely nationalist tone conflicted with economic orthodoxy; Carey identified the purpose of political economy as the promotion of the happiness of nations and the application of national labor for the comfort of workers.
The same year that Essay on the Rate of Wages was published, Carey retired from active business with a fortune and devoted his time to economics and related work. He began work on a text, The Harmony of Nature, which he did not feel adequate for wider publication but which became central to his later thinking. Setting this work aside, he began Principles of Political Economy in 1837, an expansion of his refutation of Senior. He completed the three-volume work in 1840. This work was largely adapted by the French economist Frédéric Bastiat in his own Harmonie Economiques in 1849, with some later accusing Bastiat of plagiarism. The first volume explained Carey's labor theory of value. Its second volume, a comparative study of credit systems in France, Great Britain, and the United States, reads as a defense of the American free banking system, particularly as practiced in New England, in the wake of the Panic of 1837. It was cited favorably by John Stuart Mill in defense of his own arguments for a similar system in Britain. Carey continued to ground his thinking in standard laissez faire doctrine, writing that "Governments have arrogated to themselves the task of regulating the currency, and the natural effect is that nothing is less regular." He would soon thereafter abandon the doctrine.
Rejection of free trade Following the Panic of 1837 and the success of the protectionist Tariff of 1842, Carey became an open critic of free trade.
Carey's newfound skepticism was based on his empirical observation of tariff history and his belief that some economic law must exist to explain prosperity under protection and bankruptcy under free trade. By Carey's own account, he initially expected the 1842 tariff would prolong the recession; when it did not, he sought an explanation and became convinced "as with a flash of lightning, that the whole Ricardo-Malthusian system is an error and that with it must fall the system of British free trade." Subsequent scholars have challenged Carey's claim of a sudden change of heart by pointing to his earlier opposition to the English occupations of Ireland and India and his support for Friedrich List and the German Zollverein. He may have also been influenced by his own personal experience; between 1837 and 1840, he invested a portion of his publishing wealth in a paper mill that became completely bankrupt. By the end of 1843, Carey was engaged in a public debate with former Vice President John C. Calhoun, a leading advocate for tariff reduction. In 1845, in a pamphlet entitled Commercial Associations in France and England, Carey began to reject wholesale the "British" economics of Thomas Malthus and David Ricardo altogether and sought to develop a critique of their underlying assumptions. At the same time in England, the Manchester school of liberal capitalism reached the apex of its influence with the repeal of the Corn Laws.
Over the course of ninety days in 1848, Carey expanded on this view by writing Past, Present, and Future, which he said was "designed to demonstrate the existence of a simple and beautiful law of nature, governing man in all his efforts for the maintenance and improvement of his condition which, nevertheless, has hitherto remained unnoticed." The work argued in favor of a marriage of industry with capital and the necessity of maintaining domestic markets to promote prosperity; it was met with derision from Manchester school economists. The same year, while living in Burlington, New Jersey, Carey founded The Plough, the Loom, and the Anvil, a periodical journal of economic development, with John Stuart Skinner serving as its publisher. Selections of Carey's writings in the journal were compiled into his next work, The Harmony of Interests.
Critique of slavery Carey was a long-time opponent of American slavery, criticizing it as an economic albatross.
In 1853, prompted by the popularity of Uncle Tom's Cabin, Carey wrote and published The Slave Trade, Domestic and Foreign: Why it Exists and How It May Be Extinguished. The tract was partly written as an accusation of hypocrisy against the English. Uncle Tom's Cabin had been particularly popular among abolitionists in England, who cited it to contrast English liberty to American slavery; Carey sought to expose the English system of pauperism and colonialism as an equally severe or worse form of bondage, introducing famine, exile, and pestilence to its subjects in addition to its restraint on liberty. Nevertheless, The Slave Trade is primarily a criticism of the Southern system of chattel slavery on moral and economic grounds.
New-York Daily Tribune From 1849 to 1857, Carey was a leading editorialist on political economy at Horace Greeley's New-York Daily Tribune.
Beginning in 1852, Karl Marx also served as European correspondent for the Tribune. Marx privately referred to Carey as "the only American economist of importance," but was highly critical of Carey's views as obstructive of communist revolution. Marx believed himself to be engaged in a "hidden warfare" against Carey through his own work for the Tribune. Even after both had left the Tribune, Marx remained a critic of Carey for the remainder of his life. In a 1890 study of Carey's thought, Charles Herbert Levermore suggested that Carey's criticisms of David Ricardo and Thomas Malthus may have been a "prophetic vision of the use that Karl Marx and the socialists would make of [their work]."
While at the Tribune, Carey successfully pressed for an open editorial position in support of the Russian Empire in the Crimean War against Great Britain and France, despite the Russian institution of serfdom. This stance was adopted by much of the Northern press and has been partially credited for influencing Russia's reciprocal support of the Union during the American Civil War and the opposition of Great Britain and France.
Carey left the Tribune in 1857, around the same time Greeley came out in support of a reduction in tariffs. Greeley would later run for president in 1872 on an anti-tariff platform. After leaving the Tribune, Carey took two tours of Europe, where he personally met with John Stuart Mill, Count Cavour, Alexander Humboldt, Justus von Liebig, Michel Chevalier, and other leading men. He maintained correspondence with many of his European acquaintances and hosted them as guests when they visited Philadelphia.
Influence on Republican Party Carey was hugely influential in shaping the nationalist and protectionist economic policy of the early Republican Party, through his roles as a public intellectual, party operative, and advisor to numerous figures. During the American Civil War, Carey was a trusted adviser to both President Abraham Lincoln and Treasury Secretary Salmon P. Chase. He directly assisted in the drafting of Republican tariff legislation from 1857 through the Civil War, and his thought also influenced President Lincoln's banking and finance policy through the passage of the National Bank Act of 1863 and subsequent Treasury policy.
Tariff of 1857