The History of Political Economy
in the United States
Vernon Louis Parrington
[Chapter III, "Changing Theory," from the
book Main Currents In American Thought,
published by Harcourt, Brace and Company, 1927]
UNLIKE as were Thomas Bailey Aldrich, Walt Whitman, and Mark Twain,
they belonged equally to an America that was passing. In consequence
of the silent drift towards consolidation new philosophies were
preparing that were to rephrase the familiar American ideals and adapt
current political and economic theory to the needs of the new order.
For a decade or more the significance of that drift was obscured by
the last great wave of decentralization that swept across the prairie
commonwealths; but when the frontier had been pushed to the Pacific
Northwest and the free lands had passed into private ownership, the
movement of consolidation gathered momentum swiftly. Primarily
economic in its origins, it went forward on even foot with the
industrial revolution. The vast increase in population, the
unprofitable expansion of agriculture, the augmenting resources of
liquid capital, the new potentialities revealed by industrialism, were
all engaged in the work of transforming a scattered agricultural
people into an urbanized industrial people.
And then came the railways to hasten a movement that was implicit in
the nature of things. Effective nationality in America issued more
immediately from fluid communication than perhaps any other cause. A
depressing spirit of isolation -- of provincial aloofness -- had lain
like a heavy weight on the colonial mind. The barriers of distance
were made formidable by a rugged untamed country, and to open up free
communication was an arduous undertaking. Yet easy communication must
be provided if economic development were to go forward. In the early
years of the nineteenth century vast plans and great outlays of money
went into the work of linking the sundered portions of the country by
a system of waterways. The Erie canal, the great lakes, the Ohio and
the Mississippi, were creating their own America, picturesque and
individual, when the process of differentiation was rudely broken
across by the iron rails that ran East and West, disregarding natural
barriers and breaking down traditional frontiers. It was, the railways
that tied the continent effectively together, providing the needed
transportation to make: possible a national economic system. With the
laying of the Union Pacific rails in the late sixties the destiny of
America as a self-sufficient economic unity was fixed. Henceforth for
an indeterminate period the drift of tendency would be from the
outlying frontiers to industrial centers, and with that drift would
come far-reaching changes in the daily routine of life. The machine
would reach into the remotest villages to disrupt the traditional
domestic economy, and the division of labor would substitute for the
versatile frontiersman the specialized factory-hand. A new urban
psychology would displace the older agrarian, and with the new
psychology would come other philosophies in response to the changing
realities.
WINDS OF ECONOMIC THEORY
So profound a revolution could not fail to dislocate the foundations
of all traditional schools of thought. Economic and political theory
were both thrown out of their earlier beds to flow in new channels. By
force of gravitation the main stream of economic theory-like the main
stream of political theory-poured into the broadening channels of
capitalism, and only the lesser vagrant currents followed the old
channels of agrarianism or the new channels of proletarianism. There
was much speculation on the disturbing phenomena of the great change,
and current economic theory was slow to settle into the conformities
of a school. It divided sharply, not only between the advocates of
capitalism and agrarianism, but between those who accepted the
classical English theory and those who believed that economic
conditions in America warranted an independent American school. The
first group of professional economists -- Henry C. Carey, Francis A.
Walker, David A. Wells-made its appearance, and a very considerable
group of amateurs-free4ance economists and fireside theorists --
contributed to the speculation of the times in the measure of their
intelligence. These latter have received scant attention, since the
battle went against them; nevertheless they do not deserve to be
forgotten, for most often they were an expression of the social
conscience of the times-a homely protest against the exploitation of
farmer and workingman by the rising capitalism. But because they
essayed to turn the course of "manifest destiny" they were
ignored or roughly ridden down, and only one of them -- Henry George
-- is still widely influential.
In the primitive early days of America economic theory had been a
simple homespun product, woven on fireside looms, and following simple
domestic patterns. With the rise of industrialism it passed into the
keeping of stockbrokers and textile manufacturers and retail merchants
who were looked upon as authoritative expounders of the new science of
wealth. In his
Elements of Political Economy, first published in 1837 and for
forty years a standard textbook in American colleges, Francis Wayland
accepted this view and offered an apology for treating of the subject
at all. "It may possibly be urged," he said, "that the
Author, having had no experience in mercantile business, should have
left this subject to be treated of by practical men." In the days
of Henry Clay this view established itself in the halls of Congress,
where politicians who had never heard of Ricardo were on profitably
intimate terms with Nick Biddle, and respected the interests of
influential constituents far more than the principles of
Manchesterism. With the appearance of professional economists the
breach between economic theory and legislative votes widened to a
chasm. Ignored by the politicians except in so far as their views fell
in with the current paternalism, the economists retreated to the quiet
of the schools and there spun their webs quite harmlessly. Youthful
undergraduates were fed on a modified English classical theory in
which the pessimism of Ricardo and Malthus, bred of the bitter
dislocations of English industrial life, was diluted with an optimism
more suited to the temper of the new world.
The academic economists, it must be confessed, were in an unhappy
position, not unlike that of the earlier Calvinists. They lived as
remote from the realities of life as did those old ministers. Trained
in the orthodox English school they felt bound to defend laissez
faire; yet as members of universities dependent on wealthy patrons
they could not well offend powerful interests that wanted none of
their free-trade theory. On the whole they stuck pretty manfully to
their. guns, and from Wayland to Sumner they upheld the abstract
principle of free competition; but what; they could do in other ways
to appease the wrath of the protectionists they did heartily, and the
steady rapprochement of academic economic theory and capitalism was
foreordained in the nature of things academic. Agrarian and
proletarian economics were granted no hearing in the colleges. Other
schools than the English classical were not countenanced, Henry George
was ridiculed and the left-wing European economists -- great thinkers
like Sismondi, Saint-Simon, Louis Blanc, Bastiat, Proudhon, Engels,
and Karl Marx -- were pretty much ignored by professors of economics
in the America of the Gilded Age. Something of the intellectual
sterility of the genteel tradition descended upon our academic
economists; yet amongst them were vigorous and capable minds that must
not be overlooked.
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