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Economics

Mathew Carey on
Protection vs. Free Trade

February 2015

This article was originally published in the May 29, 1979 issue of Executive Intelligence Review and is reprinted with permission.

Mathew Carey.

In his speeches and writings, Carey advocated a national policy commitment to foster domestic industry in the United States. This included a policy of protective tar­ (If ... which in his time was the mos1 appropriate defense against the economic warfare heing waged by Great Britain under the rubric oj 'free trade."

We quote helowfrom the series oladdre.ues which Carel' delivered to the Philadelphia Society for the Promotion ol National lndustry in 1819.

... Political Economy shall be the subject of these essays. In its broad and liberal sense, it may be fairly styled the science of promoting human happiness ....

... As a preliminary step, we propose to establish the utter fallacy of some. maxims, supported by the authority of the name of Adam Smith, author of The Wealth of Nations, but pregnant with certain ruin to any nation by which they may be carried into operation ....

.... The main proposition which we at present combat, and to which we here confine ourselves is, that,

"If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy of them with some part of the produce of our own industry, employed in a way in which we have some advantage."

The only rational mode of testing the correctness of any maxim or principle is to examine what have been its effects where it has been carried into operation, ...

Great Britain affords a felicitous instance for our purpose ....

There are above a million peopie of both sexes and of all ages, employed in that country, in the woollen and cotton manufactures. By their industry in these branches, they make for themselves and families a comfortable subsistence. They afford a large and steady market for the productions of the earth, giving support to, probably, at least a million of persons engaged in agriculture; and moreover, enrich the nation by bringing into it a wealth fromnearly aII parts of the earth. The immense sums of money they thus introduced into their native country afford means of employment and ensure happiness to millions of other subjects ...

From this cheering prospect, let us turn the startled eye to the masses of misery which Dr. Smith's system would produce; and we shall. then behold a hideous contrast which, we trust, escaped the doctor's attention ....

The East Indies could at all times, until the recent improvements in machinery, have furnished cotton goods at a lower rate than they could be manufactured in England, which had no other means of protecting her dome.stic industry, but by a total prohibition of the rival fabrics. Let us suppose that France, where labour and expenses are much lower than in England, has possessed herself of machinery, and is thus enabled to sell woollen goods at half, three-fourths, or seveneights of the price of the English rival commodities. Suppose, further, that articles manufactured of leather are procurable in South America, and iron wares in Sweden, below the rates in England. Then, if the statesmen of the last nation were disciples of Adam Smith, as "foreign countries can supply them with those commodities cheaper than they themselves can make them," they must, according to the doctor, "buy from them with some part of the produce Qf their own country," and accordingly open their ports freely to those various articles, from these four particular nations. Who can contemplate the result without horror? ...

Industry paralyzed and the enormous floods of wealth, drawn from their colonies, answering no other purpose but to foster and encourage the industry, and promote the happiness of rival nations; and all obviously and un· deniably the result of the system of "buying goods' where they are to be had cheapest," to the neglect and destruction of their domestic industry ....