2.5 — An Intellectual History of Trade III: Better Protectionist Arguments — Class Notes
Contents
Tuesday, October 20, 2020 and Thursday, October 22, 2020
Overview
Today, we continue looking at an intellectual history of trade, discussing new protectionist arguments that emerged since the decline of mercantilism.
It has probably been drilled in your head by economists that tariffs are bad (and I am happy to be only the latest professor doing it!). The overwhelming majority of economists agree that tariffs, in the practical, political, real world are not a net gain. The most sober-minded and non-ideological of them recognize that there are theoretical conditions where tariffs can be good for an economy - though identifying those conditions in the complexity of the real world is difficult.
I want to give the protectionists their due, and to that end, in this discussion (and the following one, on industrial policy), I want to push you all to confront two possibilities and grapple with them:
- There are conditions, however theoretical, where tariffs (or other trade restrictions, and not free trade) might be good.
- Historically, the wealthy developed countries (e.g. Britain and the United States), while touting the ideology of free trade, were themselves quite protectionist for a long time.
The opponents of free trade have latched onto these facts historically (and today), and have historically made arguments that are a variation of: the U.S./U.K. became the wealthiest countries in the world BECAUSE of their tariffs, particularly in the 19th century. This has been a significant intellectual argument among certain elements of the economic nationalist right in this country, and this was well before President Trump arrived on the scene! Later, I will trace this argument from Alexander Hamilton in the 1790s through Friedrich List and Henry Clay in the 1830s to Pat Buchanan in the 1990s. I want us to grapple with this argument, and we will do so again in our following discussion on industrial policy (they are all related).
Readings and Discussion Board
See this week’s required readings. There are questions to help guide your readings there, and more instructions for the required Blackboard discussion board this week.
Slides
Live Class Session on Zoom
The live class Zoom meeting link can be found on Blackboard (see LIVE ZOOM MEETINGS on the left navigation menu), starting at 2:00 PM.
If you are unable to join today’s live session, or if you want to review, you can find the recording stored on Blackboard via Panopto (see Class Recordings on the left navigation menu).
Assignments: Discussion Board
This week we will have a discussion board on this week’s readings and general topics. You are expected to post there by Sunday 11:59 PM October 18, and will be graded for your posts. See more on today’s readings page, or the assignments page, for more information.