Here’s a letter to Time:
Editor:
Ajay Mehrotra, in his otherwise accurate exposé of many of the fallacies that infect Donald Trump’s case for protective tariffs, mistakenly implies that post-civil-war tariffs did indeed promote American industrialization in the late 19th century (“The Tariff History Donald Trump Is Overlooking,” Oct. 29). A great deal of careful research over the years, by Douglas Irwin and others, has debunked this notion. Only a few days ago the economic historians Alexander Klein and Christopher Meissner released more such research, concluding that “tariffs may have reduced labor productivity in manufacturing by weakening import competition and by inducing entry of smaller, less productive domestic firms. Our research also reveals that lobbying by powerful and productive industries may have been at play. The era’s high tariffs are unlikely to have helped the US become a globally competitive manufacturer.”
The pernicious influence on 19th-century American trade policy of special-interest groups was noted also by the great British economist Alfred Marshall, who, with an open mind, visited America in 1875 to observe first-hand the workings of this trade policy. What he found was discouraging:
I found that, however simple the plan on which a protective policy started, it was drawn on irresistibly to become intricate; and to lend its chief aid to those industries which were already strong enough to do without it. In becoming intricate it became corrupt, and tended to corrupt general politics….
Subsequent observation of the course of politics in America and elsewhere has strengthened this conviction. It seems to me that the policy adopted in England sixty years ago [namely, of unilateral free trade] remains the best, and may probably remain the best, in spite of increasingly rapid economic change, because it is not a device, but the absence of any device.
Evidence on today’s trade policy reveals that interest-group pressures continue to pollute it.
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
