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Quotation of the Day…

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… is from page 392 of Douglas Irwin’s great 2017 volume, Clashing Over Commerce [2]:

One of the ironies of the Hawley-Smoot tariff [of 1930] is that it did not originate as a result of pressure from manufacturers.  Instead, it originated from progressive Republicans who thought a tariff adjustment – in the vain hope of achieving “tariff equality” – would help its agricultural constituents.  The tariff revision was offered by politicians rather than demanded by interest groups.  However, once the door was open to changing the tariff for some groups, others – namely, small and medium-sized businesses in manufacturing, even if not suffering from increased foreign competition – were only too happy to take advantage of the situation for themselves.  The episode illustrates how politicians can use economic interests for their own purposes, not just the other way around.

DBx: Yes.  Government officials are an interest group no less than are American steel producers, American sugar-cane and sugar-beet famers, French farmers, and every other set of producers who manage to organize in order to convince the state to pick the pockets of others for their greedy purposes.

(Pictured above are Rep. Willis Hawley [R-OR] and Sen. Reed Smoot [R-UT].  To be clear: the Smoot-Hawley tariff did not remotely cause the Great Depression, although it was one, among many [3], contributing factors promoting the Depression’s severity.  For a full-length study of the history, the economics, the politics, and the consequences of Smoot-Hawley, see Doug Irwin’s superb 2011 book, Peddling Protectionism.) [4]

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