Sunday, August 26, 2018
Peddling Protectionism: Smoot-Hawley and the Great Depression Paperback – October 24, 2017 by Douglas A. Irwin (Princeton University Press)
Dr. Irwin's book is clear, concise and an excellent history of the Smoot-Hawley Tariff, probably the best remembered import-export bill in U.S. history. Just how it is remembered, and if it did what its supporters and detractors claim, form much of this book. Dr. Irwin begins with a well-written overview of the agricultural problems that led to the push for a protective tariff of this kind, then goes into great detail about the legislative process of creating the bill. How well did it work? The next chapter shows the reader, while another section points out Smoot-Hawley's effects on international trade, and the conclusion examines the tariff's second life in rhetoric and politics. I found the work very useful and easy to understand, although the economic formulae in the third chapter took some re-reading for me to follow. Editorial cartoons helped put the tariff in context and add to the book. Irwin makes reading about Smoot-Hawley, if not fun, at least very palatable and worth the reader's time, and adds to our understanding of the economic problems of the late 1920s and early Great Depression.
The Smoot-Hawley tariff of 1930, which raised U.S. duties on hundreds of imported goods to record levels, is America's most infamous trade law. It is often associated with--and sometimes blamed for--the onset of the Great Depression, the collapse of world trade, and the global spread of protectionism in the 1930s. Even today, the ghosts of congressmen Reed Smoot and Willis Hawley haunt anyone arguing for higher trade barriers; almost single-handedly, they made protectionism an insult rather than a compliment. In Peddling Protectionism, Douglas Irwin provides the first comprehensive history of the causes and effects of this notorious measure, explaining why it largely deserves its reputation for combining bad politics and bad economics and harming the U.S. and world economies during the Depression.
In four brief, clear chapters, Irwin presents an authoritative account of the politics behind Smoot-Hawley, its economic consequences, the foreign reaction it provoked, and its aftermath and legacy. Starting as a Republican ploy to win the farm vote in the 1928 election by increasing duties on agricultural imports, the tariff quickly grew into a logrolling, pork barrel free-for-all in which duties were increased all around, regardless of the interests of consumers and exporters. After Herbert Hoover signed the bill, U.S. imports fell sharply and other countries retaliated by increasing tariffs on American goods, leading U.S. exports to shrivel as well. While Smoot-Hawley was hardly responsible for the Great Depression, Irwin argues, it contributed to a decline in world trade and provoked discrimination against U.S. exports that lasted decades.
Featuring a new preface by the author, Peddling Protectionism tells a fascinating story filled with valuable lessons for trade policy today.