The Market Revolution
Summary & Analysis
Henry Clay and Sylvester Graham: Fellow Travelers
Through the 1820s and into the 1830s, Henry Clay was a leading force in Congressional politics. Sometimes called "the greatest man never to become president," Clay represented Kentucky in the House of Representatives for eleven years, the Senate for fourteen years, and served as Secretary of State under President John Quincy Adams from 1825 to 1829. Among his legislative legacies was a bundle of initiatives labeled the American System. Not all of these proposals met unqualified success, but his triad of tariff protection, internal improvements, and conservative land policies represented the most coherent plan for national economic development since the 1790s.
In 1832, Sylvester Graham, upon learning that Europe's cholera epidemic might soon reach America, launched himself on the lecture circuit with a recipe for good health. The centerpiece of his prescription was a strict diet of coarse grain bread and vegetables. Coffee was forbidden, as were most spices, meat, and alcohol. The "Graham Diet" acquired a huge following. Graham Clubs formed across America and the "Graham Cracker" became an American staple.
As far as we know, Clay was not a Grahamite and Graham was non-political, but both were engaged in a similar enterprise; they offered prescriptions for good health—social and physical—amid the dynamic (some thought chaotic) conditions let loose by the market revolution.
Clay's American System
The first piece within Clay's American System was a series of tariffs on European goods. American manufacturers had enjoyed a welcome period of market monopoly during the international crises that culminated in war between 1808 and 1815. With European goods largely shut out of American markets, young American industries were able to get started without foreign competition. But as soon as the War of 1812 ended, British manufacturers dumped goods by the boatload into American markets. In 1814, foreign exports (primarily British) to America totaled $13 million, and in 1816, they jumped to $151 million with devastating results for American industries.19 British goods, offered at unbeatable prices, threatened to wipe out emerging American producers.
American consumers did not complain—after all, they once again had access to cheaper foreign goods. But lawmakers like Clay realized that America needed to develop its own manufacturing base, though it would be difficult to do so given Britain's competitive advantages. England's large cities offered pools of cheap labor, and its shortage of available land prevented these urban workers from pursuing other sorts of work. The only way American industries could compete, at least for a time, was to insulate them from European competition through the imposition of tariffs. By taxing imports, thereby raising their cost to American consumers, the government could shield American industries so that they could compete and survive.
The second part of Clay's American System was the development of a federally coordinated system of internal improvements. He was far from the first to propose this. Alexander Hamilton had been among the earliest advocates of a nationally financed system of roads, bridges, and harbors. But early efforts had met resistance from critics who worried about the cost of such an undertaking and argued that the Constitution did not give Congress the power to legislate such a system. Many southern critics also worried that the loose interpretation of the Constitution needed to justify congressional action on this front, might lead to interpretive creativity on other policy fronts, such as slavery. They therefore dug in their heels and insisted on a literal and narrow reading of the Constitution.
By the 1820s there had been some softening on this issue. Former skeptics, like Presidents James Madison and James Monroe, now believed that the federal government should play a larger role in building the nation's infrastructure. They, and other moderates on this issue, suggested that, if nothing else, the federal government should make funds available to the states for this purpose. But hardliners like Clay argued that this half-baked approach would lead to a poorly integrated system. The nation's roads, bridges, and canals needed to be coordinated by the federal government. Only this approach could produce the cohesive infrastructure needed for national development.
The final piece of Clay's system was a set of policies regarding the distribution of western lands. Since the 1780s, national policy-makers had debated the best method for distributing and governing the vast national domain turned over to the national government by the states after the Revolution. Some argued that these lands should be made available on the easiest of terms with a minimal amount of federal oversight. But others argued that the federal government should carefully survey, record, and sell these lands in an orderly, and revenue generating, manner. The land law passed in 1796 followed this latter strategy. Federal lands were surveyed and carved into square 640 acre lots that were then sold at auction in eastern cities for a minimum bid of $2 per acre.
Subsequent land laws reduced the minimum bid and the minimum lot. By 1832, a person could buy an 40 acre parcel at a minimum bid of $1.25 per acre. But many remained unsatisfied with the government's policy. They argued that federal lands should be more affordable and that some sort of "preemption" right should be legally acknowledged, that is, if a person squatted or occupied a piece of un-surveyed federal land, he ought to have first claim to that land at the minimum price when it was eventually surveyed and put up for auction.
Clay opposed both the periodic cheapening of federal lands and all attempts to pass a preemption law. He lobbied instead for higher minimum bids and tighter federal regulation of western lands, and he resisted all attempts to make these lands more affordable to the poor.
The Key Word is "System"
In order to fully appreciate Clay's vision we need to recognize that its three components—tariffs, internal improvements, and conservative land policies—were parts of a coherent system. Moreover, the plan was rooted in a particular analysis of both the opportunities and dangers lying within the country's expanding market economy. Clay's enthusiasm for America's economic growth was not unbridled. He worried that unless properly managed the nation's economy could spin in economically and socially dangerous directions.
Clay recognized, for starters, that tariffs could only protect American industries for so long—eventually they would need to confront European competition without government protection. And the only way they could do that was by eliminating Britain's labor advantage. America needed to generate its own urban workforce—a pool of urban workers to match Britain's comparatively cheap manufacturing labor supply. This would never happen if America's western lands were virtually given away by the federal government. If land prices continued to fall, if preemption rights were legislated, cheap western lands would continue to draw off America's urban workforce. America's cities would never develop a healthy manufacturing base, but instead they would provide homes for only the most desperate and unambitious. Cities would degenerate into the urban cesspools that had frightened Americans, like Thomas Jefferson, for decades.
Cheap western lands not only drained the cities of their needed labor, they drew too many farmers into the business of producing food. This led to a glut of food stuffs in the market which led to declining prices and inevitable economic collapse in the west. The recent Panic of 1819 only confirmed Clay's fear that unless more carefully managed, America's western domain would pass through cycles of boom and bust—rapid overexpansion followed by economic failure. The only way that a healthy agricultural economy could be sustained was by ensuring that western migration was controlled. In addition, this limited population of western farmers had to be provided with large urban markets to feed. Here, the tariff and land policy elements within Clay's vision came together beautifully. Higher land prices would keep people in the cities providing both a necessary source of labor to urban industries and a necessary market for western foods.
The final piece of Clay's plan, internal improvements, was the connector that brought these two economies together. Through the construction of a coherent system of roads and canals, the carefully contained western agricultural economy would be linked to the now competitive urban manufacturing economy—and a truly American national economy would be achieved.
Tariffs, Roads, and Graham Crackers?
So what does all this have to do with Sylvester Graham?
Well, maybe it is a bit of a stretch. But on a certain level, Graham and his followers were similarly concerned about the potential for social chaos lying within the emerging market economy. Abundant western lands, new opportunities in distant markets, and the erosion of traditional patterns of exchange were unsettling for many Americans. As older ties of community were weakened by the more fluid and seemingly boundary-less conditions of the new market economy, people wondered what exactly would hold people together and keep people under control. Graham was just one among many commentators and theorists who offered up a plan based on the same solution: self-control. As the traditional forms of communal regulation broke down, health theorists, ministers, and educators articulated the same solution—people must learn to manage themselves.
Graham's advice may have centered on diet, but it drew more fully on a set of ideas about self-mastery and self-regulation—it's not easy to live on bread and vegetables alone. More fully, he advised people to exercise moderation in all their activities, from work to sleep to sex. Like many pseudo-scientific theorists of the period, Graham believed that good health was dependent on preserving and balancing the body's fluids. If discharged recklessly or imprudently, the physical toll would be costly. A person's physical and psychic health was dependent on mastering all one's impulses. Immoderation in any area would lead to physical and psychic disaster.
Clay's American System was similarly informed by concerns about unregulated, undisciplined economic development. He worried that unless the federal government exercised more regulatory control, America's industries would fail against foreign competition and its cities would decline into swamps of poverty and vice, America's western lands would pass through cycles of over-expansion and collapse, and its infrastructure would be an unintegrated and wasteful mess. There were even moral and social anxieties feeding Clay's vision that brought him that much closer to people like Graham. He believed that under current indulgent policies, cheap western lands drew urban riff-raff to the west with pie-eyed expectations of easy profits. Rather than the sober and disciplined breadbasket of America, the west was fast becoming the home of the shiftless and the immoderate.
So, just maybe there was a common subtext within the American System and the Graham Diet. The opportunities unleashed within the new market economy could be exciting, but they also threatened disorder and social chaos. Unless Americans, collectively and individually, learned how to impose order, unless they developed systems that provided discipline and moderation, the American body would become dissipated and weak, and its physical and moral character would degenerate.