In my latest reading of Freedom from Want: American Liberalism and the Global Economy, Edward Gresser talked some about the history of trade and protectionism.
made the point that trade is good because other countries make some
things better and more efficiently than we do, and we make some things
better than other countries, so it's beneficial to all sides to let them
stick with what they're good at and to trade. Moreover, according to
Gresser, protectionism makes foreign goods more expensive, with the
result that consumers have less money to spend on other goods, thereby
hurting the economy. Gresser also points to places that tried to be
self-sufficient and to cut themselves off from the outside
world----Sparta, North Korea, etc.----and he believes that we should not
want to be like them. I'd like to see better arguments for why
a country should not try to be self-sufficient, and yet I can see
Gresser's point that we're better off importing certain things. Coffee
comes to my mind.
Gresser then talks about American history. As Gresser notes, trade was a significant part of America's early days.
The Declaration of Independence criticizes the British for hindering
the thirteen colonies' trade with other countries, the American flag
consisted of imported goods, Thomas Jefferson promoted free trade as
something that would be conducive to prosperity, and Thomas Paine
thought that trade would lead to peace. But Gresser says that there
were strong protectionist voices, such as Daniel Webster, Henry Clay,
the Whigs, and later the Republicans. Like the leftist critics
of free trade today, protectionists in America's history feared that
free trade would drive down American wages because American workers
would have to compete with foreign workers (in this case, in Europe),
who were poor because they were not paid much. But another reason that
protectionists liked tariffs was that they were an easy and convenient
source of government revenue, and the Whigs and early Republicans
supported public financing (of infrastructure, for example) as a way to
stimulate the American economy.
Moreover, whereas Lou
Dobbs presents outsourcing as a devastating outcome of corporate
influence on the U.S. government, Gresser notes that protectionism in
America's history tended to coincide with a relationship between
government and business interests----since the special interests back
then were the businesses that wanted to be protected from foreign
It will be interesting to read Pat Buchanan's The Great Betrayal
to get his take on protectionism and free trade in America's history. I
wouldn't be surprised if some of the Founding Fathers supported trade
as a general principle, while also practicing protectionist policies
every now and then. Such inconsistency or pragmatism is possible, for
Ronald Reagan was believed to be a free trader, and yet, as Phyllis
Schlafly states, he "imposed tariffs on motorcycles to protect
Harley-Davidson and on electronic products from Japan" (see here).
Believe truth! Shun error!
5 hours ago