Among Mathew Carey's many writings had been a collection (1822) of Essays on Political Economy, one of the earliest of American treatises favoring protection, and Henry C. Carey's life-work was devoted to the propagation of the same theory. He retired from business in 1838, almost simultaneously with the appearance (1837-1840) of his Principles of Political Economy. This treatise, which was translated into Italian and Swedish, soon became the standard representative in the United States of the school of economic thought which, with some interruptions, has since dominated the tariff system of that country. Carey's first large work on political economy was preceded and followed by many smaller volumes on wages, the credit system, interest, slavery, copyright, &c.; and in 1858-1859 he gathered the fruits of his lifelong labors into The Principles of Social Science, in three volumes. This work is a most comprehensive as well as mature exposition of his views. In it Carey sought to show that there exists, independently of human wills, a natural system of economic laws, which is essentially beneficent, and of which the increasing prosperity of the whole community, and especially of the working classes, is the spontaneous resultcapable of being defeated only by the ignorance or perversity of man resisting or impeding its action. He rejected the Malthusian doctrine of population, maintaining that numbers regulate themselves sufficiently in every well-governed society, and that their pressure on subsistence characterizes the lower, not the more advanced, stages of civilization. He denied the universal truth, for all stages of cultivation, of the law of diminishing returns from land.
His fundamental theoretic position relates, to the antithesis of wealth and value. Carey held that land, as we are concerned with it in industrial life, is really an instrument of production which has been formed as such by man, and that its value is due to the labor expended on it in the pastthough measured, not by the sum of that labor, but by the labor necessary under existing conditions to bring new land to the same stage of productiveness. He studied the occupation and reclamation of land with peculiar advantage as an American, for whom the traditions of first settlement were living and fresh, and before whose eyes the process was indeed still going on. The difficulties of adapting a primitive soil to the work of yielding organic products for mans use can be lightly estimated only by an inhabitant of a country long under cultivation. It is, in Carey's view, the overcoming of these difficulties by arduous and continued effort that entitles the first occupier of land to his property in the soil. Its present value forms a very small proportion of the cost expended on it, because it represents only what would be required, with the science and appliances of our time, to bring the land from its primitive into its present state. Property in land is therefore only a form of invested capital a quantity of labor or the fruits of labor permanently incorporated with the soil; for which, like any other capitalist, the owner is compensated by a share of the produce. He is not rewarded for what is done by the powers of nature, and society is in no sense defrauded by his sole possession. The so-called Ricardian theory of rent is a speculative fancy, contradicted by all experience. Cultivation does not in fact, as that theory supposes, begin with the best, and move downwards to the poorer soils in the order of their inferiority. The light and dry higher lands are first cultivated; and only when population has become dense and capital has accumulated, are the low-lying lands, with their greater fertility, but also with their morasses, inundations, and miasmas, attacked and brought into occupation. Rent, regarded as a proportion of the produce, sinks, like all interest on capital, in process of time, but, as an absolute amount, increases. The share of the laborer increases, both as a proportion and an absolute amount. And thus the interests of these different social classes are in harmony. But, Carey proceeded to say, in order that this harmonious progress may be realized, what is taken from the land must be given back to it. All the articles derived from it are really separated parts of it, which must be restored on pain of its exhaustion. Hence the producer and the consumer must be close to each other; the products must not be exported to a foreign country in exchange for its manufactures, and thus go to enrich as manure a foreign soil. In immediate exchange value the landowner may gain by such exportation, but the productive powers of the land will suffer.
Carey, who had set out as an earnest advocate of free trade, accordingly arrived at the doctrine of protection: the coordinating power in society must intervene to prevent private advantage from working public mischief. He attributed his conversion on this question to his observation of the effects of liberal and protective tariffs respectively on American prosperity. This observation, he says, threw him back on theory, and led him to see that the intervention referred to might be necessary to remove (as he phrases it) the obstacles to the progress of younger communities created by the action of older and wealthier nations. But it seems probable that the influence of Lists writings, added to his own deep-rooted and hereditary jealousy and dislike of English predominance, had something to do with his change of attitude.