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    psnyder, Mark Sumner, Mrs M

    I've been wanting to read more on the American System here for a long while now, and I think I'll have to pick up some books on the subject.

    I have long been in favor of a return to the American System. It is my firm opinion that we need an industrial policy in this country -- a policy that encourages and supports manufacturing. It's just common sense that you can't make money if you don't have something to sell, and how will you have something to sell if you don't produce something of value?

    Hamilton understood that. That's why he supported high tariffs. He knew that Americans would just keep on buying British manufactured goods if things had proceeded normally, and why not? The British goods were better made than anything that the Americans could hope to produce for themselves at the time, and American merchants had ties with British merchants going back to before the Revolution. It would have been an easy thing to fall into old habits and to renew old trade deals. On the other hand, America lacked the capacity to even compete with Britain in terms of industrial production, and in the few areas where we were even capable of building what the British could build, our products were inferior and cost more.

    That's why the tariffs were needed, to support the development of industry. Without giving domestic products an advantage, America would never have developed an industrial sector. If we hadn't listened to Hamilton back then, we'd be exactly what Canada is now -- a nominally independent country that is still primarily based on resource extraction. There is a lot to be admired about Canada, but that's basically what Canada is. The only reason it is as prosperous as it is, is its fantastic wealth of natural resources -- land, oil, timber, precious metals, and so on. But the Canadians don't actually do the hard work of tearing that stuff out of the ground themselves. They sell the rights to foreign companies while Canadians do the grunt work. If it wanted to, Canada could probably have an economy just as powerful as the United States if it capitalized on its resources and kept the management of those resources and the attending profits domestic, and worked on developing its industry more. Perhaps it could even eclipse us at this point. The point is that Canada is still stuck in a colonial mindset. It's still acting like it's a resource bin for the British Empire. America could have gone that way, but Hamilton firmly said "No." I don't know where his insights came from, or why he was so set against America remaining tied at the hip to Britain since he started out as a Tory, but whatever it was, I am thankful that he acted as he did.

    Getting back to the present, we need to return to the kind of policy that Hamilton and Clay and Lincoln and Carey pursued: one of encouraging trade by encouraging manufacturing. In other words, we need to have something worth selling if we want to sell anything at all. For all his friendly dealings with bankers, I am sure that if Hamilton could see the shenanigans that have been going on for the last thirty-odd years in the banking sector, his face would turn as red as his hair in fury. He would have looked at what we have become and said to us, "Why don't you go back to celebrating the Queen's Birthday while you're at it?"

    Thank you also for the list of books that informed this. I will have to read them.

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