Academic journal article The Cato Journal

Clashing over Commerce: A History of U.S. Trade Policy

Academic journal article The Cato Journal

Clashing over Commerce: A History of U.S. Trade Policy

Article excerpt

Clashing Over Commerce: A History of U.S. Trade Policy

Douglas A. Irwin

Chicago: University of Chicago Press, 2017, 832 pp.

During the first 16 months of Donald Trump's tumultuous presidency, the subjects of trade, tariffs, and America's role in the global economy have featured prominently in the public square. Although it may not have been as obvious before 2017, the conduct and consequences of U.S. trade policy--and, perhaps more so, the misconceptions surrounding it--have long stirred the people's passions.

That's not news to Dartmouth economics professor Douglas A. Irwin, whose latest treatise on the history of U.S. trade policy documents in exquisite detail how "The Tariff' has sparked bitter political, economic, and constitutional debate and has been a persistent source of sectoral conflict from the founding of the republic to the present.

Clashing over Commerce: A History of U.S. Trade Policy was written, according to Irwin, to fill a glaring void. The last major history of U.S. trade policy to be published was the 8th edition of A Tariff History of the United States in 1931, by Frank Taussig, the famous Harvard trade economist who became the first chairman of the U.S. Tariff Commission (predecessor of the U.S. International Trade Commission) when it was created in 1916. As Irwin aptly demonstrates in Clashing, much trade policy history has transpired since 1931.

But Irwin doesn't begin where Taussig left off. He starts in colonial times to make certain his readers understand not only that U.S. trade policy played a major role in shaping the course of U.S. history, but that the mercantilist trade policies of the British Empire--such as the Navigation Acts, which precluded direct trade between the American colonies and other countries and required all goods be channeled through England--contributed to the growing anti-Crown fervor that eventually erupted into revolution and the birth of a nation.

In the introduction, Irwin references Federalist 10, in which James Madison notes that in every society there exist competing economic interests with contrasting views about what government policy ought to be. Alluding to what we would call the process of trade policy formulation today, Madison observed:

   Shall domestic manufactures be encouraged, and in what degree, by
   restrictions on foreign manufactures? are questions which would be
   differently decided by the landed and the manufacturing classes,
   and probably by neither with a sole regard to justice and the
   public good.... It is in vain to say that enlightened statesmen
   will be able to adjust these clashing interests, and render them
   all subservient to the public good.

Irwin's broad thesis, however, is that despite these bitter debates and the frictions and conflicts generated by this clashing of self-interests, U.S. trade policy has shown remarkable stability throughout the nation's history. Irwin attributes that stability to a geographic continuity of economic interests (such as steel production in Pennsylvania, tobacco farming in Kentucky, textile manufacturing in South Carolina) and the separation of powers (Madison's handiwork), which makes wrenching policy changes less likely. "Producer interests, labor unions, advocacy groups, public intellectuals, and even presidents can demand, protest, denounce, and complain all they want," Irwin writes, "but to change existing policy requires a majority in Congress and the approval of the executive. If the votes are not lined up, the existing policy will not change."

In fact, Irwin argues that U.S. trade policy substantively changed course only twice in our history, both times in response to exogenous shocks which led to political realignments--the Civil War and the Great Depression. Within each of the three periods delineated by these two shocks, policy continuity largely prevailed. But the shocks themselves heralded wholesale changes in the objectives of U. …

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