HispanicPundit + history + tariffs   1

You Didn't Build That
As to tariffs, Cohen and DeLong break from two centuries of economic thinking beginning with Adam Smith and David Ricardo, which has held that free trade benefits economies and that tariffs usually have significant detrimental effects. It is true that Hamilton was a high tariff man and that the U.S. adopted high protective and revenue-raising tariffs. It is also true, however, that there is a general consensus that what economist Walt Rostow famously called America’s “take-off” into sustained economic growth occurred after 1840 (Rostow says 1843–1860), when tariffs were going down sharply. For example, shortly after the passage of the extremely high Tariff of Abominations in 1828, duties on imports were 61.69%, but as a consequence of tariff reductions (in 1832, 1833, 1846, and 1857), they fell sharply to 34.39% by 1840 and to 19.67% by 1860. Might rapid growth have started even earlier if we had not adopted the Hamilton high tariff policy praised by Cohen and DeLong? Students of tariffs from Frank Taussig to Paul David argued decades ago that the high tariffs were more an income redistributionist scheme for New England rent-seeking manufacturers than a sage policy to promote general economic growth.
tariffs  History  USA  China  industrialPolicy  DeLong  Vedder 
february 2018 by HispanicPundit

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