American School (economics)

Historical macroeconomic policy in the United States / From Wikipedia, the free encyclopedia

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The American School, also known as the National System, represents three different yet related constructs in politics, policy and philosophy. The policy existed from the 1790s to the 1970s, waxing and waning in actual degrees and details of implementation. Historian Michael Lind describes it as a coherent applied economic philosophy with logical and conceptual relationships with other economic ideas.[1]

It is the macroeconomic philosophy that dominated United States national policies from the time of the American Civil War until the mid-20th century.[2][3][4][5][6][7] Closely related to mercantilism, it can be seen as contrary to classical economics. It consisted of these three core policies:

  1. Protecting industry through selective high tariffs (especially 1861–1932) and through subsidies (especially 1932–1970).
  2. Government investments in infrastructure creating targeted internal improvements (especially in transportation).
  3. A national bank with policies that promote the growth of productive enterprises rather than speculation.[8][9][10][11]

The American School's key elements were promoted by John Quincy Adams and his National Republican Party, Henry Clay and the Whig Party and Abraham Lincoln through the early Republican Party which embraced, implemented and maintained this economic system.[12]