American School (economics)
Hamilton rooted this economic system, in part, in the successive regimes of Colbert's France and Elizabeth I's England, while rejecting the harsher aspects of mercantilism, such as seeking colonies for markets.
[14] The goal, most forcefully articulated by Hamilton, was to ensure that dearly won political independence was not lost by being economically and financially dependent on the powers and princes of Europe.
Jefferson and Madison strongly opposed Hamilton's program, but were forced to implement it by the exigencies of the embargo, begun in December 1807 under the Non-Intercourse Act, and the War of 1812 against Britain.
[15] A number of programs by the federal government undertaken in the period prior to the Civil War gave shape and substance to the American School.
Other developments included the various Army expeditions to the west, beginning with Lewis and Clark's Corps of Discovery in 1804 and continuing into the 1870s (see for example, the careers of Major Stephen Harriman Long and Major General John C. Frémont), almost always under the direction of an officer from the Army Corps of Topographical Engineers, and which provided crucial information for the overland pioneers that followed (see, for example, the career of Brigadier General Randolph B. Marcy), the assignment of Army Engineer officers to assist or direct the surveying and construction of the early railroads and canals, and the establishment of the First Bank of the United States and Second Bank of the United States as well as various protectionist measures such as the Tariff of 1828.
Towards the end of the Civil War in March 1865, Henry C. Carey, Lincoln's economic advisor, published a series of letters to the Speaker of the House entitled "The Way to Outdo England Without Fighting Her."
Carey wrote: The most serious move in the retrograde direction is that one we find in the determination to prohibit the further issue of [United States Notes] ... To what have we been indebted for [the increased economic activity]?
However, the national system of internal improvements was never adequately funded; the failure to do so was due in part to sectional jealousies and constitutional scruples about such expenditures.
Opposition to the economic nationalism embodied by Henry Clay's American System came primarily from the Democratic Party of Andrew Jackson, Martin van Buren, and James K. Polk.
The Jacksonians opposed other elements of Clay's ideology, including support for internal infrastructural improvements, on the grounds that they represented governmental overstretch as well.
In Andrew Jackson's first annual message to Congress in 1829, he declared that "[b]oth the constitutionality and the expediency of the law creating this bank are well questioned by a large portion of our fellow-citizens, and it must be admitted by all that it has failed in the great end of establishing a uniform and sound currency".
[24] This rhetoric, portraying the supporters of the bank as privileged individuals, and claiming the opposition of "a large portion of our fellow-citizens" crystallizes Jackson's majoritarian distaste for the special interest serving economic nationalism embodied in the American System.
[26] Henry Clay's American System supported the necessity for central institutions to "take an activist role in shaping and advancing the nation's economic development".
[26] The bank thus fit well into Clay's worldview, and he took advantage of Biddle's manipulation in order to pass the renewal bill through Congress, despite expecting Jackson's inevitable veto.
[27] However, the tariffs indeed represented an economic nationalism that primarily benefited the Northern States, while increasing the cost of European imports in the South.
[28] The final bastion of Jacksonian opposition to Clay's American System existed in relation to the use of government funds to conduct internal improvements.
[29] Van Buren believed very strongly that "[t]he central government, unlike the states", had no obligation to provide relief or promote the general welfare.
[29] As heir to the legacy of Van Buren and Jackson, Polk was similarly hostile to internal improvement programs, and used his presidential veto to prevent such projects from reaching fruition.
[31]The American System was important in the election politics for and against Grover Cleveland,[7] the first Democrat elected after the Civil War, who, by reducing tariffs protecting American industries in 1893, began rolling back federal involvement in economic affairs, a process that became dominant by the 1920s and continued until Herbert Hoover's attempts to deal with the worsening Great Depression.
The election of Warren G. Harding and the Republican Party in 1920 represented a partial return to the American School through restoration of high tariffs.
At the close of World War II, the United States now dominant in manufacturing with little competition, the era of free trade had begun.
[39] In 1973, when the "Kennedy" Round concluded under President Richard Nixon, who cut U.S. tariffs to all time lows, the New Deal orientation towards reciprocity and subsidy ended, which moved the United States further in the free market direction, and away from its American School economic system.
