“Two systems are before the world… One looks to increasing the necessity of commerce; the other to increasing the power to maintain it. One looks to underworking the Hindoo, and sinking the rest of the world to his level; the other to raising the standard of man throughout the world to our level. One looks to pauperism, ignorance, depopulation, and barbarism; the other to increasing wealth, comfort, intelligence, combination of action, and civilization. One looks towards universal war; the other towards universal peace. [One] …we may be proud to call the American system, for it is the only one ever devised the tendency of which was that of elevating while equalizing the condition of man throughout the world.” – Henry Charles Carey, Economic Adviser to Abraham Lincoln
The Tea Party movement of right-wing anarchism, which has dissipated, but it still influential in this country is profoundly motivated by the disreputable Austrian School of Economics. Many of these so-called Tea Party Patriots may not even be aware of the fact, that their fatuous economic hocus pocus/daft theory, comes from Vienna, Austria — and not Yellowstone Park, Dodge City, Lake Mead, Mt. McKinley, the coal fields of Kentucky and Western Virginia, Utah’s Salt Lake, the Grand Canyon, the Great Plains, or the Alamo! In other words Sarah Palin’s mythological “real America”. The United States has a high wage, protective tariff, beneficent projects, public works, and egalitarian-minded economic tradition/ethos, that is virtually entirely absent from the teaching of today’s “elite” American economic and business schools.
The Chicago School is the more prevalent in American mainline economic teaching — as compared to the aforementioned Austrian one — but, as per my understanding, it is a more tepid cup of the same deleterious, rank, and wholly execrable brew! Moreover, Milton Friedman and his sycophantic acolytes, are proffering a kind of revisionist or neo — if you will — Austrianism. And furthermore, in my study/research of the American economics profession (Ph.D. bearing true economists the term is sometimes used rather loosely), it is Chicagoism that reigns supreme. So this kind of traitorous Austrian economic junk theory (or “watered-down”, “mild”, or “polite” versions of it), exists as a kind of fifth column in this country; and has been driving it down since at least the emergence of the pernicious, and the consummately deplorable Ronald Reagan.
President Reagan the man who popularized these anti-American economic sophistries/dilettantisms, and even earning himself a dignified nickname, as the alleged so-called grand communicator. And more still, this knavish and deceitful individual even turned many New Deal/JFK loving Democrats over to — unbeknownst to them — the fifth columnists’/traitorists’ side! The “choice” arteries of this fifth column today are, of course, the loathsome Murdoch “news” channel, and these AM radio carnival barkers, who revile anyone who isn’t pale, white, age spot bespeckled, and/or well-to-do!
Alexander Hamilton, this nation’s first Secretary of the Treasury, believed in a nation that would be strong by maintaining a federal debt — and with good credit standing. Hamilton also rejected the Austrian view of a gold standard explicating, “Purchases and undertakings, in general, can be carried on by any given sum of bank paper or credit, as effectually as by an equal sum of gold and silver.” And unlike many of the Austrians who willy-nilly seemingly perpetually repeat the trite, hackneyed, and unimaginative slogan “End the Fed”, Hamilton was a strong believer in a national bank. (I am aware of the fact that the Federal Reserve is currently a private bank it can, however, be de facto or de jure nationalized.)
Hamilton was a believer in a national bank for quite a different number of reasons, but an interesting one in particular; I think, was the allegiance that Hamilton had, to the General Welfare Clause of the Constitution of the United States. A component of the Constitution — and some Austrians go around bandying about that they are “constitutionalists” — that many of the most ardent, hard-hearted, and dedicated Austrians indefatigably hate! Secretary Hamilton was not a so-called strict constructionist, moreover, and he even saw our founding document, as a fungible framework from which to advance, evolve, and capacitate.
Hamilton was also exceedingly well-versed in free trade arguments, and believed that tariffs were necessary in order to develop US manufactures, which concomitantly would have positive stimulative effects on: the promotion of a robust national defense, diversification of trades, differentiation of labor, and worker technical expertise/skill sets. Hamilton was, in fact, a heretical, infidel, and even a “certifiable” protectionist! Today in the American “mainstream” media — particularly in the business/financial press — one of the strongest, most virulent and insolent, and even insurrectionistic of dirty words!
Abraham Lincoln like Hamilton, and influenced by his chief economic adviser Henry Charles Carey, believed that government had a moral obligation to provide economic sustenance for the American people, and especially for the poor. He stood, again like Hamilton, for positive government intervention in the economy: tariffs, a national bank, and public works programs. Lincoln was also supportive of the rights of labor — including its use of the right to strike — that it would, of course, use to protect its (workers’) stake. Lincoln believed in the idea that all men should receive a commensurate, fair, and ever increasing return from their labor, such that they might even have the chance to rise from their point of origination in life. According to Lincoln economics was a moral discipline, and his economic arguments often involved an implied appeal to morals as well. And moreover, Lincoln identified the right to rise, as the essential ideal/integral component of the United States.
Lincoln was an admirer of the Kentuckian Whig politician Henry Clay, who was, of course, a far better senatorial representative of his state and its people (needless to say), than the ignoble and menacing personage of the wily, “good” Senator/Dr. Rand Paul today. Nevertheless and notwithstanding however, the admirable aforementioned Kentucky senator was the progenitor, and indeed the coiner; in fact, of the term “American System”, which he ascribed (as its predecessors) to Hamiltonian economic ideas. Lincoln and Carey each rejected the constraints of the outmoded apprenticeship economy that forsook people to the trades of their parents — and favored obsequiousness to hereditary elites. And moreover, they also firmly rejected making money, and material the cardinal measure/quintessential element of all things. (As the Austrians rather facily, reductionistly and myopically do, of course!) Carey defended the robust use of government in the furtherance of economic goals. He did not view government activity, as necessarily at odds with the working of a — sociological fiction — organic/unencumbered economic order. To Carey the natural order (or way) included this positive government role that would; indeed, empower the indispensable American “right to rise”.
Franklin Delano Roosevelt was the twentieth century heir to the Federalist-Whig-Republican tradition of Lincoln, Clay and Hamilton. Roosevelt, of course, via the New Deal created such initiatives like the: REA (Rural Electrification Administration), LCRA (Lower Colorado River Authority), and TVA (Tennessee Valley Authority). The REA provided interest free loans for rural electrical systems, and the LCRA and TVA were regional public-private hydroelectric cooperatives, that acted as engines of economic growth in distressed areas of the rural South. Though often credited to Eisenhower, Roosevelt was also actually the original progenitor of the interstate highway system as well. And beginning in World War II the United States began to fund the R&D that led to breakthroughs from: atomic energy, to the jet engine, and even computer technology.
FDR’s New Deal also provided hundreds of thousands of jobs to unemployed Americans. Jobs that led to the building of tens of thousands of bridges, paved countless miles of roads, and planted three billion trees additionally. The New Deal created a set of long-term structural changes to the economy in the Great Depression, whose impact lasted well beyond those days. Such as the FDIC (Federal Deposit Insurance Corporation), for one example, which protects our bank deposits. And moreover, the New Deal planted the seeds for growth in the economy from the 1940s through the 1960s, in which the benefits would be shared in more equitably.
Yes, the New Deal brought public works, agricultural price supports, new mortgage markets, working-hours legislation, securities regulation, reforestation, and the repeal of the Prohibition. And additionally, Congress passed laws in concordance with all of these goals — and other legislation too. Legislation that involved: watershed management, Social Security’s implementation, and the legalization of labor unions. Indeed, all these things remain today, whether in whole or trimmed down; we live in the nation that the New Deal made.
Despite the New Deal’s firm and deeply American roots, as well popularity across class, regional, religious, racial and ethnic lines, it became a point of attack for numerous unenlightened critics. These critics, such as the American Liberty League, were essentially altogether feckless, though, and received little fruits from their efforts. As they (American Liberty League), and their coadjuvants, made the 1936 election a referendum on the Rooseveltian New Deal. The results of this election showed: 76 percent of the lower-income vote, 60 percent of middle-income votes, and even 42 percent of upper-income votes that were pro-New Deal/Roosevelt.
The American system functioned with a good deal of effectiveness — steamed by the residual New Deal, and aided by many of the initiatives of the New Frontier, and the Great Society as well (right up until 1972). At about this time, however, a coalescence of factors emerged that moved this country away from this critical/indispensable philosophy. Of course, there were some notable departures, in this nation’s long history along the way, and a couple — amongst the rogues’ gallery of duplicitous, and even venal presidents — were Andrew Jackson and Calvin Coolidge! Both presidents that were fiercely antagonistic to the American way/system! The DLC-type so-called “New” Democrats Obama and Clinton, and Republican presidents since Nixon, unquestionably, have not really practiced the American system. And in turn this has created the great Gilded Age-like inequalities, immiseration, a two-tiered society, as well as, all of the other concomitant vagaries that we all bear witness to today.
From this nation’s founding up until the Richard Nixon administration the United States of America grew from an agrarian, rustic, frontier nation into the greatest economic power that the world had ever seen! After 1972 the link between real wages, and productivity was ruptured, however — and moreover has not since been repaired. Additionally America, at this point, began to also neglect many public infrastructure projects, in hopes that privatization of public assets would do a more efficient and accomplished job.
The adherence to the views influenced by the Austrians, and their more mild and “compassionate” Chicago brethren have produced the results of: the end of American leadership in education, the virtual total demise of private-sector unionization, the advent of a winner-take-all economic system, and the return of unregulated, casino-style, and unscrupulous high finance driven capitalism. Furthermore, the results have been, a massively unequal pre-tax distribution of overall income. And that is something that will, certainly, hunker down the forthcoming generation for many years to come; as well as perhaps, even make equality of opportunity in this nation a notion of this country’s distant past!
Weighing all the facts, and sifting through all the information, its seems exceedingly clear in this humble observer’s opinion, where we should all be looking for an answer in this nation. And not only that however, but it seems inconceivable then — in the final conclusion — not to return to the principles of political economy elucidated by people like Alexander Hamilton, Henry Clay, Franklin Delano Roosevelt, Abraham Lincoln and Henry Charles Carey! Indeed, to fail to do so would, in fact, be a monumental abrogation of the duty of any believer, in the finest traditions of this nation’s history! And furthermore, it would be a great disservice to the aforementioned inestimable/genuine article American historical: stalwarts, luminaries, paragons, pearls and eminences grises patriots.
Verily, seizing upon the sophistries of phonies, fatheads, horse sense “know-it-alls”, and blowhards falsely laying a claim to the banner of American Patriotism is, unequivocally, no effective or dignified path whatsoever/at all! Moreover, the Tea Party “Patriots” of Vienna — and not Branson, Missouri or South Williamsport, P.A. — with their right-wing anarchist bananas/nutty as fruitcake economical philosophy, undeniably, can no longer be allowed to rule the day! In fact, it is an altogether different (grandiloquent) path that lies before us, in order to continue on in furthering the promise of the American nation. And not only proceeding to lead on in that endeavor in conclusion; notwithstanding, but indeed in continuing to lead on in the American way — very much — also too.