Here’s yet another letter to an admirer of Michael Lind.
Mr. B__:
Ignoring the substantive point that I made in my letter to you of yesterday, you write that your “understanding is that economists recognize that American tariffs in the Nineteenth Century contributed significantly to the remarkable growth of our nation’s economy.”
I’m afraid your understanding is wrong. See, for example, Dartmouth College economist Douglas Irwin’s paper, “Tariffs and Growth in Late Nineteenth Century America,” and his September 19th, 2017, Wall Street Journal op-ed in which he explains that “America didn’t boom during the 19th century because it was a closed economy. The U.S. industrialized rapidly between 1833 and 1860, when tariffs were being cut.”
Even more recently, UC-Davis economist Christopher Meissner notes on page 118 of his 2024 book, One From the Many: The Global Economy Since 1850, that
economic growth in the United States arguably suffered due to high tariffs on capital goods imported from Great Britain, Germany, and other European economies. Tariffs reduced investment in manufacturing, causing long-run growth to be lower. Income per capita was 10%-12% lower than it might have been under free trade. On the other hand, in the United States, economic growth was nothing short of persistent, strong, and stable between 1865 and 1913. The United States experienced high economic growth despite high tariffs, not because of them.
This historical reality makes sense: Just as an individual or household is made poorer if a thug coercively restricts that person’s or household’s access to goods and services that that person or household wishes to buy, so, too, is a nation made poorer when its people’s access to goods and services is likewise restricted. The fact that the entity doing the restricting in the latter case is a government changes the outcome not one iota.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
