The Skeptical Liberal: Smoot-Hawley and the Club for Growth petition

The Skeptical Liberal

How can we live together in peace, prosperity, and harmony, while retaining our liberties as autonomous individuals who can, and must, create our own values? -- J.M. Buchanan


Smoot-Hawley and the Club for Growth petition

Max Sawicky (MaxSpeak! see also Brad DeLong's website) has objected to a claim included with the Club for Growth petition that I posted earlier and acknowledged having signed. Two comments regarding Max’s objection:

a. The original form of the petition which I received made no reference to the link that theWSJ ad drew between the current petition to stop punitive protectionist tariffs against China and the Smoot-Hawley tariff act of 1930. I added my signature at that time for the reason that several responders to Max have already made: any defense of freer trade is welcome by me, whether I agree with everything the organization stands for. Arnold Kling makes this point best on EconLog. The Smoot-Hawley connection was a later addition, and not integral to the petition itself.

b. One of the reasons why some have jumped on the Smoot-Hawley linkage is because the impact of the 1930 act is a topic in which the academic debate diverges from popular opinion. I’ll come clean first: my reading of the economic history is that it is difficult to conclude unambiguously that the tariff act significantly damaged the US economy directly. However, I am a Canadian as well as an American, and find persuasive the argument that the Canadian retaliatory tariff decisions following the Conservative election victory in 1930 hurt the American economy. Were these "indirect" hurts from lost trade possibilities enough to say that Smoot-Hawley definitely hurt the American economy? I know Barry Eichengreen doesn’t buy the “retaliatory tariff” indirect impact argument, but it deserves more consideration. See “Trade Wars” by McDonald, O’Brien, and Callahan in the Journal of Economic History, December 1997 for more on the impact of Canada’s tariffs on the US in the early 1930s. And, by the way, Canada remains the US’ largest trading partner!

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