As the nation takes note of the Feb. 12 birthday of President Abraham Lincoln, it is an appropriate moment to reflect on one of our most impactful and revered leaders. When thinking about Lincoln, the focus is usually on the Civil War, his philosophy on the Declaration of Independence and the Constitution, or how he confronted the institution of slavery both before and during the war.
What is often forgotten though, and also appropriate to reflect on, is Lincoln’s economic philosophy – especially his support for the policy of protectionism. Lincoln supported tariffs, and he was an economic nationalist. As Patrick J. Buchanan noted, it was the economic nationalism of Lincoln “that became the philosophy of the Republican Party all the way through Herbert Hoover.”
Lincoln’s philosophy reflected both the Federalist and Whig political traditions that had influenced his conservatism. Although Lincoln was the first member of the Republican Party to be elected president, he initially belonged to the Whig Party, which disintegrated during the political turmoil leading up to the Civil War.
The Whig Party had formed in opposition to President Andrew Jackson and the Democratic Party. The Whigs traced their heritage to the National Republicans and to the Federalists under the leadership of President George Washington and Alexander Hamilton. With Kentucky’s Henry Clay as their leader, the Whigs promoted a Hamiltonian policy agenda referred to as the American System.
The American System was rooted in economic nationalism or patriotism. It called for a system of protective tariffs, a national bank, and funding for internal improvements. Henry Clay strongly influenced Lincoln’s economic and political thought. Clay was Lincoln’s hero, and he described him as his “beau ideal of a statesman.”
“My politics are short and sweet, like the old woman’s dance. I am in favor of a national bank. I am in favor of the internal improvement system, and a high protective tariff. These are my sentiments and political principles,” stated Lincoln in describing his philosophy.
In 1844, while campaigning for Congress as a Whig, Lincoln made the protective tariff a central issue of his campaign. “Give us a protective tariff, and we will have the greatest country on earth,” argued Lincoln. Further, he stated that “abandonment of the protective policy by the American Government must result in the increase of both useless labor, and idleness; and so, in proportion must produce ruin among our people.”
For Lincoln, the policy of protectionism was not solely about the American economy. It was also about providing a reliable source of revenue for the federal government while allowing individuals greater liberty to keep more of their income by avoiding income taxes.
“The tariff is the cheaper system…By the direct-tax system the land must be literally covered with assessors and collectors going forth like swarms of Egyptian locusts. By the tariff system the whole revenue is paid by consumers of foreign goods…,” argued Lincoln.
Under the tariff system, Lincoln noted, “the man who contents himself to live upon the product of his own country pays nothing at all.” While serving in Congress, Lincoln supported the Tariff Act of 1842, which raised rates, and opposed Democratic President James K. Polk’s Walker Tariff Act of 1846, which lowered tariffs.
When the Republican Party formed, Lincoln often referenced his support for both Clay and the tariff. “I was an Old Henry Clay tariff Whig. In old times I made more speeches on that subject than on any others,” wrote Lincoln. Leading up to the 1860 Republican Party convention, Lincoln once again stated that he “was a Henry-Clay-tariff man, and my views have undergone no material change upon the subject.”
Lincoln was also influenced by political economist Henry C. Carey, known as the “Philadelphia high priest of the tariff.” Carey’s writings on political economy demonstrated his commitment to the American System. He would later become an economic adviser to President Lincoln and champion the American System during Lincoln’s administration.
Although the political events leading up to and including the Civil War would consume Lincoln’s presidency, his administration nonetheless reflected the economic nationalism of the American System. Prior to Lincoln assuming office, Congress had passed the Morrill Tariff Act. Lincoln would later sign additional tariff measures that increased rates. Carey, the “apostle of protectionism,” believed the Morrill Tariff Act to be one of the most important pieces of economic legislation ever passed.
It was not just tariffs: during Lincoln’s administration, Congress passed measures related to national banking, internal improvements, and agricultural development, including the Homestead Act of 1862. The Pacific Railway Act of 1862 was the most famous internal improvement project of the era, initiating construction of the transcontinental railroad.
“For the Republican Party, the American System became an article of faith, from its mid-19th century origins until the mid-20th century,” wrote Alfred Eckes. “It was Republicans, following Mr. Lincoln’s own platform pledge which held protection to workers from foreign standards of living by tariffs and sought to hold the home market for farmers against peasant labor abroad,” noted President Herbert Hoover.
“Mr. Lincoln was the best-prepared man [of his time] in economic philosophy, economic theory, and economic institutions,” stated Lewis Lehrman. Buchanan similarly argued that Lincoln “had a richer understanding of economics than any politician today.” Lincoln, Buchanan noted, was an “economic nationalist,” and he was “The Great Protectionist.”
Lincoln’s legacy cannot be fully understood without acknowledging the role economic policy played in his broader vision for the nation. His support for the American System, protective tariffs, and internal improvements reflected a belief that economic independence was essential to political independence. While the Civil War would come to define his presidency, Lincoln’s economic nationalism shaped a governing philosophy that endured long after his death, influencing Republican economic thought for generations. In remembering Lincoln, we should recognize not only the president who preserved the Union, but also the statesman who believed that sound economic policy was central to the prosperity and self-government of the American people.
