The 19th Century Thinker Who Touted Tariffs

Historians trace the origins of protectionist thought to the pre-Civil War period during which time the U.S. transitioned into a more industrial capitalist society. Protectionists presented tariffs as the essential policy to quicken the development of manufactures as well as a remedy to the social ills that afflicted the emerging industrial working class. Proponents argued that tariffs would shield American workers from the socially deleterious consequences of the industrial revolution that were already observable by the early 19th century in Europe, especially in Britain.

Imagining tariffs as a paternalistic state response to the legitimate concerns of workers, protectionists ensured that industrialization in the U.S. would not follow the same declining course as it had in Britain. Instead, protectionists argued that tariffs would shelter American workers from the competition of cheap foreign labor by propping up domestic wages and creating the opportunities for social-economic mobility so necessary to what became known as the American Dream.

But by the end of the 19th century, the industrial social-economic order that tariffs helped foster were quite different from what earlier protectionists had promised. To help distinguish promises from reality, we should remember the work of the thinker who shaped lasting beliefs about tariffs in the U.S.: Henry Carey.

Although the 1791 publication of Alexander Hamilton’s Report on Manufactures initiated America’s support for tariffs, it was Henry Carey (1793-1879), a Philadelphia printer who later became President Abraham Lincoln’s economic adviser, who united what had been a set of disparate ideas about trade policy into an all-encompassing ideology. Carey focused various strains of American economic, political, social and cultural values towards a single principle: protectionism. And in the process, Carey became America’s most influential economic thinker.

Much like how Trump has made China a key bogeyman in his trade war, protectionists like Carey linked tariffs to a patriotic, nationalistic disdain for Britain. American Anglophobia was palpable years after the American Revolution, swelling during the War of 1812, and aggravated again by the Panic of 1819, America’s first major economic crisis. Modern economists attribute the Panic to the business cycle and reckless monetary expansionism. But protectionists of the era argued that it was a conspiracy orchestrated by British merchants to “dump” cheap English wares at American ports, crushing domestic “infant industry” and impoverishing American workers. Some argued that Britain waged an economic “war of extermination” against the U.S.

According to protectionists, the conspiracy to restore the U.S. to British colonial dependence combined a commercial and an intellectual assault. American protectionists grew suspicious of those spreading free-trade propaganda. This included Southerners who were America’s staunchest free-trade advocates, lest their cotton trade with Britain be disrupted. The sharpest attacks, however, were leveled against Adam Smith, the Scottish economist who became the perfect straw-man for early American protectionists.

Smith had promoted laissez-faire economics which contended a wide range of things, including the individual pursuit of self-interest, minimum government intervention in the economy, the value of competition, the belief in self-regulating free markets, and free trade. Combined with David Ricardo (1772-1823), another influential British economist who expounded on the benefits of free trade with his theory of comparative advantage, by the mid-19th century laissez-faire became the central tenet to what was then a burgeoning discipline: economics. And Smith’s Wealth of Nations (1776) became its preferred text.

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To counter the growing free-trade movement, Carey led a cadre of American protectionist writers, politicians, and industry lobbyists to transform the nation into a tariff fortress. Carey pointed to Hamilton’s Report on Manufactures to construct what emerged as a theoretical and political juggernaut: the home-market argument. Hamilton aimed to unite Americans under a single national economic interest. With the tariff, farms and factories could coexist as complementary—rather than rival—sectors. Instead of relying on the commercial whims of foreign markets, Carey reasoned that tariffs would direct domestic agriculture to feed industrial workers and supply factories with raw materials. Manufacturers were promised employment through a steady demand from local consumers. Carey believed this would allow “the loom and anvil to take their natural place by the side of the plough and the harrow.”

He argued that protectionism was a “really American policy,” freed from the vestiges and authorities of the Old World. To develop America first, protectionists turned inward, encouraged economic isolation, and touted the U.S. as the only nation capable of true economic self-sufficiency.

But Carey’s principal interest was how tariffs would protect the working class from the damaging tendencies of free trade. Carey criticized laissez-faire economics for degrading the British working class. In his eyes, Britain stocked its “satanic mills” with “wage slaves,” debasing workers into paupers and exacerbating class conflict. By contrast, tariffs would differentiate American industrialization from the British experience, shielding domestic labor from subsistence wages and securing workers opportunities for social-economic mobility. With this rhetoric, protectionists defended tariffs as the policy instrument to mitigate class divisions and promote a “harmony of interests” between workers and capitalists.

Carey and his fellow protectionists found a receptive audience in the Republican Party, which was known as the “tariff party” since its inception in 1854. The Morrill Tariff (1861), which Carey helped write, initiated decades of trade restrictions that climaxed with the McKinley Tariff (1890) and the Dingley Tariff (1899). The latter effectively raised rates to 50% on over one thousand imported goods, solidifying America as one of the world’s most protected markets. In the battle of ideas between free trade and protectionism, protectionism won. And by the early 1900s, the U.S. had emerged as an industrial behemoth.

And yet, despite over a century of protectionist sentiment and high tariff policies, accompanied by seemingly real, tangible economic results, many Americans realized that the tariff was not the silver bullet Carey and other protectionists had promised. Carey’s pledges to American workers were left unfulfilled. In fact, working conditions declined considerably, as captured in the popular writings of Upton Sinclair, the photographs of Jacob Riis, and the speeches of an emergent left-wing working class.

Tariffs had morphed into vehicles of special interests, raising monopolistic Robber Barons who smashed organized labor and ignored the statist and interventionist elements of protectionism while simultaneously preaching Social Darwinism as gospel. The corruption attendant to tariff legislation became so brazen and shameless that, in 1913 voters ratified the 16th Amendment granting the federal government powers to tax personal incomes in exchange for lowering tariffs.

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