Protectionism has been a hot topic recently, with support coming from both the left and the right. This is not a new phenomenon, as protectionism has had its moments of popularity throughout history. One of the main arguments used to support protectionism is the infant industry argument, which suggests that shielding young industries from foreign competition through tariffs or subsidies will help them grow and ultimately lead to more economic growth. However, this argument has faced criticism and scrutiny over the years.
Right-wing public intellectual Oren Cass recently claimed that America’s economic success was due to aggressive protection of the domestic market. However, historical evidence does not support this claim. While protectionism may lead to a temporary increase in domestic production, the costs outweigh the benefits. Tariffs can increase input prices and ultimately slow down productivity growth in the long run. Additionally, they can harm industries that rely on international competition for export markets. In the case of steel protection in American history, consumers were left worse off by significant margins.
Furthermore, Cass’s assertion that America was a “backwater” before protectionist policies were implemented is also inaccurate. Economic historians have shown that by 1774, the average American colonist had a higher income than the average Englishman. This period coincided with a relatively free trade era in American history, where the North Atlantic functioned as a free trade zone. The growth observed during periods of protectionism can often be attributed to post-war recovery and catch-up growth rather than the policies themselves.
Overall, the case for tariffs as a driver of economic growth is weak. Despite periodic resurgences in popularity, protectionism has consistently failed to deliver on its promises. It is essential to consider the broader context and historical evidence before advocating for protectionist policies. Vincent Geloso, an Assistant Professor of Economics at George Mason University, has contributed valuable insights to the discussion on the true impact of protectionism on economic growth.
