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August 2017 Brief: Volume 24, Number 23

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President Trump's American System

 

by John Hendrickson

 

 

In Cincinnati, Ohio, President Donald Trump discussed his plan to rebuild the nation’s infrastructure. Rebuilding the national infrastructure is just one aspect of President Trump’s America First economic agenda. President Trump is also looking to reform trade policy by renegotiating NAFTA, and he has already pulled the nation out of the Trans Pacific Partnership. President Trump is also calling for a renewal of the steel industry. The steel industry is suffering from unfair international trade, and Commerce Secretary Wilbur Ross is examining the implications on national security.

 

President Trump is now implementing an agenda focused on placing America first and rebuilding the nation’s infrastructure and middle-class, as he promised during his campaign for the presidency. In his inaugural address, President Trump made his commitment to America First even more clear. “From this day forward, a new vision will govern our land. From this day forward, it’s going to be only America first, America first,” stated President Trump.[1] “Every decision on trade, on taxes, on immigration, on foreign affairs will be made to benefit American workers and American families,” stressed the President.[2]

 

In his first address to Congress, President Trump reiterated his belief in America First. Whether the issue is trade, immigration, taxes, or foreign policy, President Trump told Congress and the nation that it is time to place our country first:

 

I will not allow the mistakes of recent decades past to define the course of our future. For too long, we’ve watched our middle class shrink as we’ve exported our jobs and wealth to foreign countries. We’ve financed and built one global project after another, but ignored the fates of our children in the inner cities of Chicago, Baltimore, Detroit, and so many other places throughout our land. We’ve defended the borders of other nations while leaving our own borders wide open for anyone to cross and for drugs to pour in at a now unprecedented rate. And we’ve spent trillions and trillions of dollars overseas, while our infrastructure at home has so badly crumbled.[3]

 

President Trump’s call for infrastructure spending and revision of trade policy in the national interest is similar to the economic philosophy of the American System, which was developed by Alexander Hamilton and later supported by Whig leader Henry Clay. The American System called for tariffs to not only provide revenue for the government, but also to protect the American economy and fund internal improvements.

 

Perhaps one of the most forgotten individuals in American history is Henry C. Carey (1793-1879), who was an influential economist and promoter of the American System. Henry C. Carey was the son of Matthew Carey, a publisher, an economist, and a friend of Benjamin Franklin. Both Matthew and Henry Carey were influenced by the economic policies of Hamilton. In 1822, Matthew Carey published Principles of Essays on Political Economy, which reflected Hamilton’s economic philosophy.

 

Henry C. Carey wrote extensively on political economy. Carey also defended the American tariff system against the free-trade system of England. Carey’s works on political economy include Principles of Political Economy, The Harmony of Interests, and Principles of Social Science. Carey believed the tariff was not only important for the national economy, but also for his home state of Pennsylvania.

 

President Abraham Lincoln was a student of political economy and was influenced by both Matthew and Henry Carey’s ideas. In fact, Henry Carey would become an economic adviser to President Lincoln, and his economic policies during the Civil War reflected the American System. Carey became the “apostle of protectionism.”

 

Carey’s influence was reflective of the political economy of the Republican Party from President Lincoln through President Herbert Hoover. As Patrick J. Buchanan wrote:

 

Protectionism is the structuring of trade policy to protect the national sovereignty, ensure economic self-reliance, and “prosper America first.” It was the policy of the Republican Party from Abraham Lincoln to Calvin Coolidge. America began that era in 1860 with one half of Britain’s production and ended it producing more than all of Europe put together. Is this a record to be ashamed of?[4]

 

Henry Carey, along with other economists such as Friedrich List, influenced the political economy of the Republican Party until libertarian and classical liberal economic ideas became more popular in the aftermath of World War II. Economic theorists such as Friedrich Hayek, Ludwig Von Mises, and Milton Friedman became dominant thinkers within the post-war conservative movement. The Republican Party transformed from a party that supported protectionism and economic nationalism to a party that embraced free trade and globalization.

 

President Trump’s bold decisions to pull the nation out of the Trans Pacific Partnership agreement and the Paris climate change agreement are two notable examples of the President placing the interests of the nation before the global order. President Trump has also scolded NATO countries for not contributing their agreed-upon share to the alliance and called out countries such as Germany, Canada, and Mexico for taking advantage of the United States regarding trade. By placing America First in both foreign and trade policy, President Trump is not only hearkening back to an older conservatism, but also stirring the hornets’ nest of the internationalists and globalists of the conservative movement.

 

As President Trump moves forward to advance his policies of improving our national infrastructure and placing American interests first in trade policy, he is following in the direction of the American System.

 

Endnotes:

[1] President Donald J. Trump, “Inaugural Address, January 20, 2017,” The White House, <https://www.whitehouse.gov/inaugural-address> accessed on July 11, 2017.
[2] Ibid.
[3] President Donald J. Trump, “Remarks by President Trump in Joint Address to Congress, February 28, 2017,” The White House, <https://www.whitehouse.gov/the-press-office/2017/02/28/remarks-president-trump-joint-address-congress> accessed on July 11, 2017.
[4] Patrick J. Buchanan, “Bush’s Black List?,” Buchanan.org, June 5, 2008, <http://buchanan.org/blog/pjb-bush%e2%80%99s-black-list-1004> accessed on July 11, 2017.

 

John Hendrickson is a Research Analyst with Public Interest Institute, Muscatine, Iowa.
Contact him at Public.Interest.Institute@LimitedGovernment.org.

 

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