AMERICAN SYSTEM, a term invoked by Kentucky representative Henry Clay in his 3031 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.