Henry Carey as an Economic Thinker - Essay Example

? Henry Carey as an economic thinker Introduction It is necessary for every society to have a process of organizing and coordinatingchoices about the production, consumption, and distribution of goods and services. This process is helpful because, our inputs or resources are scarce, our technical ability constraint the use of these resources for production of goods and services, individuals, institutions, and organization may constrain production, and lastly because, western societies desires of groups or individuals depends on cultural forces or physical forces and normally exceeds the economic services and goods available. Ideally, these scarce resources need to be set to their “highest valued use” whereby, this allocation needs knowledge, information, and choices on which goods to produce and how to produce them (Thompson, 2007). In the jargon of economic thought, it is essential to determine what to produce, how to produce it, and the consumers who should consume the products. The criteria that a particular society uses to answer these aspects shape the society’s nature and influence the best answers to these questions (Thompson, 2007). There a number of approaches used to manage economic activities of people living in a society. Whatever approach used, it is necessary to integrate or incorporate behavior of all members in the society. The economic thought history is a study of essential attempts to describe, analyze, and explain the relationships in idealized or actual economic system (Thompson, 2007). Time and life of Henry Carey A. A biography of Henry Carey 1793-1879 Henry Carey was the first son of Mathew Carey, who was an Irish freedom rebel. In the year 1817, Henry Carey became a partner in his father’s publishing company and later resigned from the firm to study economic matters. He published his first economic book in the same year, “Essay on the Rate of Wages”. In his work, he argued against David Ricardo’s rent doctrine, and disproved doctrine of Thomas Malthus of ever-limited resources by claiming that the capital and human technology application prevails over the limitations of apparently infertile soils (Homestead, 2005). Henry Carey later advanced these economic thoughts in “Principles of Political Economy”, whose publication was in three editions from 1837 to 1840. The American Biography Dictionary affirms that Henry Carey “made the basic departure (from economic theories of British) of stating that the land gets its value from the resources spent on it”, and that employees’ wages increase at a higher rate than capital returns, therefore, attention towards “ a progressive wealth diffusion amongst the poor in a society”. Following the economic and financial depression of the 1837 panic, Carey turned out to a vocal and fierce free trade opponents in the 1840s (Homestead, 2005). His first new economic statement was in his 1845 brochure “Commercial Associations in English and France” followed by “Past, Present, and Future” in 1848. Henry’s next edition was “The Harmony of Interests: Agricultural, Manufacturing & Commercial” in the year 1851, which is famous for its fierce and repeated attacks on economic doctrines of the British. He later turned his thought to the looming crisis in America’s southern states in his 1853 book, “ The Slave Trade, Domestic and Foreign” warning against the slave trade in of the British. Henry became one of the highest outstanding supporters of the Republican Party in the 1850s (Homestead, 2005). B. Demand-the reasons that society would desire and pay for the Henry Carey’s economic thoughts Henry Carey’s economic thoughts were of higher significance to the society. His two slogans, “Protection to American labor” and “Harmony of Interests” encapsulated his worldview. Henry Carey had a vision to the American society in which small developing and manufacturing towns would prosper across the land (Peskin, 2007). Society demanded his economic thoughts whereby, according to him “association” enabled farmers to exchange their produces with other neighboring mechanics hence developing America beyond its primary producer stage. This would enable towns to grow into urban cities, generate a cultural and social life, and urban centers would trade with other urban centers. Following the use of such economic process of the society, all undeveloped nations would reach economic maturity (Peskin, 2007). The free association of individuals’ co-operation enabled town, country, capital, and labor to achieve harmony. The only way the society could use to overcome the British baneful effect was only through a protective tariff. The society demanded Henry Carrey’s economic thought of free trade because it led to “centralization”. Free trade however, led to speculation, wild fluctuations in financial activity, episodic overproduction as end users were not matched by manufacturers, and lasting underdevelopment of South and West American’s agricultural regions, which were outside northeast manufacturers’ orbit (Peskin, 2007). The Henry Carey’s theoretical stand was resulting from huge changes experienced by the Society of American during 1830s to 1850s. Similar to all utopias, the future of American society intimately allied to the fears and hopes of the present. To the subaltern class of producers, Carey offered a reassuring vision of the small-town future as a solution to the British social polarization reality and class conflict (Peskin, 2007). Ideas and theories of Henry Carey A cost of reproduction Theory of value The theory of values was among the most difficulty theories in the early poli6tical economic history. Almost all economic thinkers tried to explain the measures and causes of value. Just in the same way the other theorists attempted to explain the value theory, Henry Carey used several examples to explain the cause and measure of value. According to Henry Carey, the cause of value depends on labor (Thompson, 2007). His next step was to evaluate the measure of value. Here Henry argued that, in order to measure value, the first natural idea is to make a comparison of the produced commodities with the labor expended in the commodities’ production. In his definition of the theory of value, Carey combined two themes. He argued that labor was both the measure and cause of value, a value decided by both the labour it can control and by labour personified in a commodity. Initially, this appears unsustainable, but in his examples’ context, a single-aspect economy, and the assumption of constant costs, makes his theoretical analysis sound (Thompson, 2007). Theory of trade Economist Henry Carey had two visions on the international trade. In the historical years of his political economic career, he served as a free trader. However, in the year 1847, which was the year in which he produced his initial protectionist book, he became a potential protectionist advocate. After 1847, Carey examined every economic aspect focusing on how it would affect the nation’s foreign sector (Thompson, 2007). Accordingly, he came up with an elaborate statistical and theoretical argument designed to convince various American public sectors that substantial advantages would accrue to the sectors only if they would maintain protection. Protection and agriculture- According to Henry Carey, free trade highly affected farmers. Over a long period, he claimed that, if the supply of silk, iron, coffee, and other supplies needed by farmers do not match with the increase in the cotton supply, the farmers will constantly supply more cotton for exchange of less silk, iron, and thus others will enjoy full benefit of excessive supply of cotton. Although Henry Carey stated this problem in terms of supply, he further came to the conclusion that focused on both supply as well as demand (Thompson, 2007). He argued that because of free trade, the expense the farmers incurred for their imports was higher than the incomes they received from exports. Despite the extra emphasis on the condition of supplies, in effect, Henry Carey was claiming that the trading terms had turned beside the agricultural farmers and exporter. Henry Carey further observed that there was a gradual price fall of agricultural products in both foreign and domestic markets. He claimed that this was not because of overproduction since when they are surplus sellers tend to lower the prices of commodities to enable them find purchasers (Thompson, 2007). Henry Carey claimed that the prices of agricultural products must be solely determined in America. Protection and employment- After coming up with a solution to the farmers’ problem, Henry Carey turned to the issue of employment protection. His claimed were influenced by the industrial calamities of 1822, 1837, 1842, and 1857 during the era of free trade. Using an iron industry as an example, he argued that production and consumption were extremely high during the period of protection and fall during free trade periods. Henry Carey maintained that prices would rise under free trade and thus there was need of employment protection (Backhaus & Heilbronn Symposium in Economics and the Social Sciences, 2012). Theory of economic development As would be people’s expectations from an economic thinker, Henry’s all-consuming concentration was for the benefit of economic advancement of the United States. Every aspect of all his political economy showed his ultimate expression in economic development (Carson, 2007). Henry Carey’s theories of rent, trade, income distribution, institutions, his social and moral development concern, Anglophobia-in summary, he combined his entire economic philosophy in his theory to promote the economic development and political independence of the United States (Carson, 2007). The American society benefited from Henry Carey’s economical thoughts, whose their major aims were to come up with a more developed economy in the United States. Carey’s theory of economic development was advantageous to both domestic and foreign economic development (Carson, 2007). Impacts of the economic theorists of the past to the economic, political, and social milieu of the modern world Many people wonder whether there is a relationship between the modern world and history of economic thought. Firstly, the economic theorists’ views are relevant to the current economic, political, and social development. The historical economic thoughts have been incorporated into general useful theories, which are being used for the purpose of economic development (Sartorius & Montgomery, 2006). Currently, there is no existence of free trade. Economic theorists led to the establishment of protected trade both in the domestic and foreign trade. Free trade resulted in speculative and wild fluctuations in financial activities and overproduction since manufacturers did not match end users, leading to underdevelopment of many countries. Economic theorists influenced the establishment of trade laws and regulations governing trade internationally (Sartorius & Montgomery, 2006). Currently, in order for a country to export its products to another country; the exporting country must follow the set rules and regulations of international trade. In addition, in the early years there were no laws by setting prices for commodities. For instance, farmers would gain higher expenses on imports than the profits they received from their exports. In the modern world, there are laws that govern the setting of prices for products to ensure that the set prices are advantageous to both producer and consumer. Economic theorists of the past also have impacts on the social and political milieu of the modern world (Tally, 2009). Economic theorists have led to the development of the economy in many countries hence improving the social standards among people. The economic theorists’ impacts hold that the past of economic thought is relevant to modern economic analysis and theory. In particular, economic theorists help modern economists to gain new economic insights to the modern economy by developing and considering past theories that are in “alternative economics” category (Tally, 2009). Conclusion To sum up, the economic thoughts of Henry Carey are highly helpful to the current modern world. For instance, his theory of value is an essential concept. He thought the labor value, determined by its productivity, was rapidly changing, and he used his point of view to come up with his theory. In some respects, the theory was superior since he tried to incorporate some lively elements in his theory. His development theory highly depended on his location and nationalist bias. By absolutist principles, geographical and nationalism does not have space in the development theory. Henry Carey’s economic thoughts had many positive impacts to both past and modern economic, social, and political development. References Backhaus, J. G., & Heilbronn Symposium in Economics and the Social Sciences. (2012). Two centuries of local autonomy. New York, NY: Springer New York. Carson, J. (2007). The measure of merit: Talents, intelligence, and inequality in the French and American republics, 1750-1940. Princeton [u.a.: Princeton Univ. Press. Homestead, M. J. (2005). American women authors and literary property: 1822-1869. Cambridge [u.a.: Cambridge Univ. Press. Peskin, L. A. (2007). Manufacturing revolution: The intellectual origins of early American industry. Baltimore, Md: Johns Hopkins University Press. Sartorius, . W. A., & Montgomery, D. (2006). August Sartorius von Waltershausen: The workers' movement in the United States, 1879 - 1885. Cambridge: Cambridge Univ. Press. Tally, R. T. (2009). Melville, mapping and globalization: Literary cartography in the American baroque writer. London: Continuum. Thompson, M. (2007). The politics of inequality: A political history of the idea of economic inequality in America. New York: Columbia University Press. Read More