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Doug Irwin on 19th-century Tariffs

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Jason asks me by e-mail “What is the best single article you know of [to explain why] high US tariffs in the 19 century were not why the US economy grew as it did then?”

Good question – save for the fact that picking a single article is difficult.  Scholarship seldom advances both significantly and unambiguously with a single article.  Although there are exceptions in economics – Hayek’s “Use of Knowledge in Society [2],” Demsetz’s “Toward a Theory of Property Rights [3],” and John McGee’s “Predatory Price Cutting: The Standard Oil (N.J.) Case [4]” are three that leap immediately to mind – the complexity of the economy and the often-multiple plausible competing hypotheses that might explain some phenomena require, practically, that streams of research (both theoretical and empirical) be produced and absorbed before reasonably firm conclusions are reached.

With the above caveat, I’ll take a shot at answering Jason’s question – but with two articles rather than one; both are by Douglas Irwin:

1) “Interpreting the Tariff-Growth Correlation of the Late 19th Century”; American Economic Review (May 2002); pp. 165-169.  After presenting data from the 19th century from more than a dozen countries (including the U.S.), Doug concludes this superb – and superbly concise – paper by saying:

Rather than higher tariffs causing higher growth, the relationship could be spurious: land-abundant countries [including the U.S.] relied on customs duties to raise government revenue and also enjoyed favorable growth prospects, with little link between the two.

2) “Tariffs and Growth in Late Nineteenth Century America,” World Economy (Jan. 2001), pp. 15-30.  Here’s a pdf draft version [5].