Main currents in American thought

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—free-lance 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.

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.