The American System

Discussion in 'Politics' started by Navy1960, Nov 7, 2011.

  1. Navy1960
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    Navy1960 Senior Member

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    AMERICAN SYSTEM, a term invoked by Kentucky representative Henry Clay in his 30–31 March 1824 speech to Congress as part of his argument for a higher tariff. Clay, who went on to serve in the Senate and was the Whig Party presidential candidate in 1832 and 1844, believed the tariff would stimulate national manufacturing and agriculture by insulating the domestic market from foreign products. He based this approach at least in part on the economic strategy of the British, whose continued penetration into U.S. markets and protectionist policies against U.S. exports perpetuated a major trade imbalance between the two countries throughout the 1820s. Despite widespread resistance from antiprotectionists, who feared that high tariffs would prompt other countries to tax American exports, Congress in May 1824 narrowly approved a substantial raise in the rate.

    The concept of the American System subsequently came to include a broader set of policies that Clay and his supporters propounded as the best means for strengthening the country's economy and restructuring the relationship between government and society. Clay's invocation of the term echoed the earlier economic nationalism of Alexander Hamilton who, in number 11 of the Federalist Papers in 1787, had also referred to an American System characterized by a powerful, activist federal government that would guarantee the sovereignty and prosperity of the United States. Clay's platform reflected a similar conviction that government intervention could stimulate domestic
    http://www.encyclopedia.com/doc/1G2-3401800181.html

    As I listen to this debate over "socialism" and "capitalism" rage I thought it interesting for those who wished to see the concept of stimulating the economy is not a new one as well as direct intervention by the Govt. is not a new one. Further, protectionist measures such as taxes on foreign goods were not something totally unfamiler to the founders of this nation. In fact Adam Smiths book " the wealth of nations" did not come out till 1776 the same year our constitution was signed and as Adam Smith is considered the father of "capitalism" I thought that worthy of note as the word appears no where in the constitution and from my research it's very hard to find any connection between the Scottish Adam Smith and the the framers of the constitution. In fact at the time of our founding one can say this nations economic structure was based on a whole host of different schools of thoughts and men such as Karl Marx would have been unknown to them. So in short, perhaps when we toss around words, like one system is bad or this person is a socialist, or that person is a capitalist. it's worth noting that these two economic systems had little if anything to do with how our nations consitution was framed.
     
  2. Navy1960
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    Navy1960 Senior Member

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    Forgive me for posting this in politics everyone, it should go in Economics., my apologies.
     
  3. JakeStarkey
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    JakeStarkey Diamond Member Supporting Member

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    My heavens, who knew that Hamilton and J Q Adams and Webster and Clay were socialists!
     
  4. Navy1960
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    Navy1960 Senior Member

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    laughs, I seriously doubt they would have even known what that word meant back then do you? but it is a rather eye opening insight into things at least in my humble opinion.
     
  5. JakeStarkey
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    JakeStarkey Diamond Member Supporting Member

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    The 1st bank of the US was a joint government and commerce operation: 1/5th the directors and the $$$ was put up by the government.
     
  6. Intense
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    Intense Senior Member

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    I think Hamilton was more bent on National Government being the end all. He viewed Government more as Our Keepers, than Our Representatives. He saw Us more as Property, Commodities. I think He was actually the First Statist Progressive.

    I think Tariff's were a good Idea in the First place. Had we stuck with them as the Federal Governments primary source of Income, Our Borders, Our Ports, would be Impenetrable and Secure. Our Markets better protected.

    I prefer a Free Market to Monopoly and Conglomerate Control, with Government predetermining outcome, picking the winners and losers, too often arbitrarily. I prefer the Impartial Referee, maintaining fair play and the Integrity of the game. It's a corruption of Principle that effects everything around it. Statism preferred the Big Companies, with interest in National Reach and Centralized Control, rewarding them and showing favor, while penalizing Small Enterprise, and showing it disfavor. Each has it's place, each advantages and disadvantages. With all of the meddling, we forget that.
     
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  7. Navy1960
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    Navy1960 Senior Member

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    I think it can be said that in Hamilton's day a mix Mercantilism and local trading was the order of the day. The point of this was to show that using such words like "socialism" and "capitalism" for that matter and somehow trying to make the case that if one system or the other is unAmerican is a bit off the mark. Further, Federal Govt. stimulation of the economy is not something that President Obama invented nor is the advent of Federal help in building infrastructure. As for "Free Markets" I would venture to say that although they have been around since the inception of this nation, that those who crafted our nation were more interested in giving the power to the poeple to decide what sort of system they would prefer. I would submit to you, that if a state for example were to institute a complete so called "socialist" agenda, then if that did not conflict with the constitution and the voters of that state approved it, that state would be well within it's rights to do so. In my humble opinion I believe this is more what they had in mind. However, the point here is simply to point out that using one word of the other to denegrate someone based on what they may or may not believe is just incorrect and it is my humble belief that both elements of these types of economic systems have been with us since the founding of this nation even though they had no idea what "Capitalist meant" or for that matter "Socialist"
     
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    Last edited: Nov 8, 2011
  8. Intense
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    Intense Senior Member

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    Totally agree. From my perspective, the Total Operating Budget of Government is Socialist by definition, other than Royalties from Natural Resources and usage. Government gets it's cash flow from the consent of the governed, that and the Fines, Fee's, and Penalties which we all love. :) Yeah, there are Socialized Methods in Business too, and the expectations that go with them.

    I think Small Enterprise has it's advantages and strengths too, and they should be better treated, as a whole. We get the short end way too often.
     
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  9. Navy1960
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    Navy1960 Senior Member

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    Intense, one of the reason's why I always try to point out that the founders were a bit smarter than they sometimes are given credit for. In that, our Federal Govt. is there to provide an atmosphere for business here to thrive. If one chooses to call that socialist or capitalist then so be it, as long as in the end, America and it's citizens prosper.
     
  10. The Rabbi
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    The Rabbi Diamond Member

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    Policies that might have worked for a 3rd rate country on the backside of nowhere in the 18th century don't translate well to a 21st century super power. Tariffs to "protect" domestic manufacture end up hurting those companies, which can't compete in the world market, as well as consumers, who pay higher prices for inferior goods.
     

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