The American System

Col Robert Gould Shaw: What are you doing?
Col Montgomery: Liberating this town in the name of the republic.
--Glory

Henry Clay (Whig, KY) entered national politics in 1811 as a member of Congress. Clay was a political heir to Alexander Hamilton's vision of strong centralized government, a vision that planked the Whig Party platform.

Clay was a central formulator of what came to be known as the 'American System.' The American System consisted of three key elements. High tariffs shielded certain domestic industries from foreign competition. A national banking system gave government control of the money supply. Finally, the road to commerce was paved on government funded programs known as 'internal improvements.'

Modern economists would label the American System as a program of mercantilism. Mercantilism is a conduit for building imperial State power through practices of protectionism and subsidies for favored industries.

Moreover, tax funded subsidies to businesses for government sponsored 'internal improvement' projects are today seen as 'corporate welfare.'

In the first half of the 1800s, Whig politicians were able to put in motion various elements of the American System. For instance, a series of high tariffs protected Northern manufacturers from foreign competition. By the 1840s, the majority of US exports came from the South. Because the South's economy was predominantly grounded in agriculture, those high tariffs meant that Southerners paid more for manufactured goods--whether they came from Europe or the United States.

By the 1820s Southern states condemned the tariffs and other elements of the American System as unconstitutional tools of plunder. The costs of government policies were largely being levied on the South, while those in the North enjoyed an outsized chunk of the spoils.

Parenthetically, South Carolina was close to secession in the 1830s and had voted to nullify (read: refused to collect) a federally improsed tariff before the federal government relectantly backed down.

The American System was a strong centralized government design--one that did not align well with the limited government Constitutional design.

The influence of the American System in driving the South toward secession after Lincoln's election in 1860 cannot be underestimated.

btw, can you name the young Whig politician from Illinois who was a devout proponent of Henry Clay and the American system from the get go?