Try as they might – and, boy, do they ever try! – protectionists cannot square their circle.
Mr. D__:
Thanks for your follow-up e-mail.
You’ll be unsurprised to learn that I disagree that, in his letter in today’s Wall Street Journal, Robert Lighthizer “lands a knockout blow” to Phil Gramm’s and my case that 19th-century American industrialization was not promoted by protectionism.
Lighthizer argues like a lawyer pleading a hopeless case: He ignores our chief piece of evidence and then, deploying pretzel-logic, accuses us of committing the very offense of which the guilty party is his own client.
Our key evidence – using Joseph Davis’s data on 19th-century industrial output – is that annual rates of industrial growth were higher over spans of years when average tariff rates were falling than over spans of years when average tariff rates were rising. Contrary to Lighthizer’s claim, the fact that average tariff rates were higher throughout the 19th century than they are today does nothing to weaken our argument. If Lighthizer and other protectionists are correct that protectionism fuels industrialization, industrialization should have accelerated with rising tariffs and decelerated with falling tariffs. But the opposite occurred.
Lighthizer ends his letter by illogically suggesting that, because Mr. Gramm and I note that trade policy nevertheless played a relatively small role in 19th-century economic development, we unwittingly acknowledge what he calls our case’s “fragility.” He then wonders why we “obsess so much about” 19th-century trade policy.
In fact, the people who obsess so much about 19th-century trade policy are Lighthizer and other protectionists who are desperate to find historical evidence for their strange theory that artificially decreasing people’s access to goods and services is a means of increasing people’s access to goods and services. Mr. Gramm and I wrote about the 19th-century experience only to expose as false the protectionists’ frequently repeated claim that 19th-century history supports the protectionist case.
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
