The American Apologists

Commodore Vanderbilt's Locomotive

The "American Apologists" is the only term we could come up to describe late 19th Century and early 20th Century American arch-conservative economists and social scientists.  There had been earlier American economists of considerable reputation, such as Henry C. Carey and Daniel Raymond, of the distinctively nationalist-protectionist "American System" that flourished in the 1820-60s.  But academic economics, in the hands of men like John McVickar at Columbia and Francis Wayland at Brown, tended to be more liberal and deviated little from British Classicism.

A modern, distinctive American economics, combining aspects of prior traditions, came into "being" in the 1870s with the work of Francis A. Walker.  For the next forty years or so, the American economics scene was dominated by a loose "orthodoxy" which followed on the heels of Walker. This orthodoxy was rather theoretically loose, hovering between Classical and Neoclassical economic theory.  It was in their applied work and policy stance that they distinguished themselves most clearly.  

The last quarter of the 19th Century was a particularly trying time for the United States.  Financial panics, agricultural crises, the rise of the railroad and related industries like iron and steel had upturned the American economic landscape.  The concentration of ownership and predatory methods of the new industries -- the "trusts" -- had raised a few eyebrows. But so did the agrarian crusades and radicalized trade unions which rose to meet them.  Much blood was spilt in the capital-labor confrontations of the stormy 1880s.  It was also around this time that populist American reformers like Henry George, the Bimetallists and the Progressivists began to get active.  Economists were called on to take sides -- and take sides they did.

The American university system, particularly in the East, was dominated by strict apologists for the status quo.  Simon Newcomb at Johns Hopkins, John Bates Clark at Columbia, J. Laurence Laughlin at Chicago, Charles Dunbar and Frank Taussig at Harvard,  Arthur T. Hadley and William Graham Sumner at Yale, all rose to defend the new industrial age and condemn the unions and populist causes.  The provincial universities, with their roots in the agrarian and industrial Midwest, such as Wisconsin and Michigan, had a more progressive tinge.

It is important to note that many of the American apologists were were not Manchester School-type liberals, but rather nurtured on "American System" protectionism.  The America which was disappearing was already the liberal's dream.  Prior to the 1870s, America (outside the plantation-based south) had a relatively gentle but firmly-rooted capitalist system with small manufacturing and freeholder farms at its backbone and a restrained government in the background.  Capitalism was well-grounded in America.  As John Stuart Mill wryly put it, "They have the six points of Chartism, and they have no poverty; and all these advantages do for them is that the life of one sex is devoted to dollar-hunting, and of the other to breeding dollar hunters" (J.S. Mill, as quoted in Mason, 1982) 

What the apologists had to defend was the new industrial capitalism -- dominated by prominent monopolistic "trust" corporations -- which threatened to upturn this socio-economic equilibrium.  Destitute farmers, ruined craftsmen and legions of immigrants were asked to surrender their dreams of property-ownership and independence, bow their heads and march quietly into the ranks of an industrial "army" under the command of self-styled "captains of industry" like Vanderbilt, Gould, Carnegie, Mellon, Rockefeller, Guggenheim at al.  The economists had to explain to traditional America, still very puritanical, how the unrestrained greed, predatory practices and ostentatious displays of wealth by the "robber barons" could still be ethical.  Popular outrage against "rent-takers", rakers of "unearned increments" was channeled by populists like Henry George (1879) and the "Single Tax" movement.   And, to a population that had only a century earlier fought a revolution against British mercantilist practices, the apologists had to explain why an almost openly-corrupt government should be allowed to use its power to crush trade unions and farmer organizations, place strict controls on the money supply, use regulations to minimize competition among the corporations and throw up trade barriers to coddle them.  These were positions that many a European liberal would have decried.   

The American apologists had one peculiarly American feature: a penchant for making appeals to religious and moral arguments to defend the status quo.   They often claimed that the "eternal laws of economics" were God-given and just, and that any attempt to meddle with them by, say, anti-trust legislation or legalizing unions, deserved heavy condemnation on moral grounds.  Some apologists, notably William Graham Sumner, were Social Darwinists:  they appealed to the theory of evolution to defend the "natural laws" of the economy, that "delicate organism" created by free contract and led by "the fittest" captains.   Given this penchant for moral piety, the apologists were easily ridiculed by their opponents.  Thorstein Veblen, Henry J. Davenport and Frank H. Knight gleefully skewered the apologists with masterful wit.

Although uniquely American in many ways, the apologists had some early counterparts across the Atlantic.  In Britain, Harriet Martineau, Nassau Senior, Herbert Spencer and several of the Cambridge Marshallians took up apologist arguments.  Some of the denizens of the French Liberal School, while more faithfully "liberal" than the Americans, nonetheless took policy stances that smacked of apologism.   

However, the 1870s and 1880s also saw the arrival of a crop of young American academics who had acquired their doctorates at German universities and were consequently schooled in the methods and philosophy of the German Historical School.  This "New Generation" of historists included Richard T. Ely, Henry C. Adams, E.R.A. Seligman and Simon N. Patten.   Seeing themselves as a "new school" with a more Schmoller-like normative approach to analysis and a state-corporatist approach to economic policy.  They were the nucleus of the American Institutionalist school that eventually displaced the apologists in the early 20th Century.

The methodological and ideological battle between the "old school" apologists and the "new school" historicists came to a head in 1883, with the formation of the "Political Economy Club" at Delamonico's in New York City, dominated by apologists like Newcomb, Laughlin and Sumner.  It was made clear that the historicists need not apply.   Richard Ely responded in 1885 with the formation of the American Economic Association.  Originally it was conceived by Ely as an American equivalent of the German Verein für Sozialpolitik.  Most of the apologists refused to join, believing it to be "socialistically inclined".  However, the AEA managed a coup de grace by luring, as its first president, the dean of American economics, Francis A. Walker -- who, having been personally antagonized by Sumner at Yale, had now decamped to M.I.T.   Walker and Ely together performed a conciliatory mission of bringing the old and new schools together.  The AEA subsequently became a more staid professional association. 

In spite of the fact that the American apologists had several accomplished, first-rate theoreticians in their ranks, notably John Bates Clark, they were suspicious of another brand of young turks: the high-theory, radical American marginalists, like Irving Fisher, Frank A. Fetter and Henry J. Davenport, who looked to the schools of Lausanne and Austria for inspiration. Interestingly, the historicists tried to rope them into their "new school" ranks, but, by and large, they tended to stay above the fray.  For a variety of reasons, mostly methodological, the apologists seemed to have given them little room to breathe -- and neither did the Institutionalists who followed them. American marginalists were scattered in out-of-the-way places and thus, until the 1930s, failed to consolidate themselves into a distinct school. 

 

  

HET

 

Resources on American 19th Century Economics

 

All rights reserved, Gonçalo L. Fonseca
 

 

  Home Alphabetical Index Schools of Thought  Essays & Surveys Contact