How important was protectionism to the growth of the US in the 19th century?

Nov 2014
421
ph
How important was the American school of high tariff barriers and import substitution to the growth of the US in the 19th century as an industrial power? Will it have experienced the same if it had decided on a policy of free trade with negligible trade barriers built on the theory of comparative advantage, and would the US have been better off if it had practiced 19th century style trade protectionism during the Cold War instead of its policy of lowering trade barriers?
 
Dec 2011
1,304
That's hard to say and the evidence is mixed, though, at least it seems to me, the recent literature leans towards a slightly positive assessment of tariffs and US growth in 19th century.

However, I would venture to say that tariffs probably did not have a major impact on US growth, in general, but a medium one on the specific growth path taken. That is to say, had there been no tariffs, and thus, more competition in industry, the American economy might have developed a different structure.

Nonetheless, one problem of doing research of this kind is that one would have to prove that official tariffs were actually implemented and functioned the way one would expect they do.
 

stevev

Ad Honorem
Apr 2017
3,618
Las Vegas, NV USA
At the time, tariffs were the main source of revenue for the Federal Government. They were called "protective tariffs" in that it was thought they helped the development of US manufacturing by shielding nascent industries. In the late 19th century export of manufactured goods surged and it was believed protective tariffs were a major factor. Modern economic theory has caste doubt on that. Other factors such as rich new domestic sources of raw materials and capital accumulation made US manufacturing more competitive and are now thought to be the drivers of the surge. Modern economics generally consider tariffs as barriers to economic growth.

https://www.dartmouth.edu/~dirwin/docs/Surge3wp.pdf
 

Rodger

Ad Honorem
Jun 2014
6,171
US
Tariff in United States history - Wikipedia
https://www.dartmouth.edu/~dirwin/docs/Growth.pdf
Did Late-Nineteenth-Century U.S. Tariffs Promote Infant Industries? Evidence from the Tinplate Industry on JSTOR
Like stevev mentioned, tariffs were the primary way the federal government garnered revenue for the longest time. One of the articles linked above states that iron, steel and wool demanded heavy tariffs to protect them in the late 19th century. The "experts" vary and differ as to the benefit of such tariffs although the JStor article mentions that the U.S. became a net exporter at the time of the high tariffs.
 
Jun 2017
2,988
Connecticut
How important was the American school of high tariff barriers and import substitution to the growth of the US in the 19th century as an industrial power? Will it have experienced the same if it had decided on a policy of free trade with negligible trade barriers built on the theory of comparative advantage, and would the US have been better off if it had practiced 19th century style trade protectionism during the Cold War instead of its policy of lowering trade barriers?
Yes. For an industrializing economy protectionism is vital, as it allowed US goods to build the US instead of being sent abroad. Then again there wasn't really an industrialized world to exploit us yet so not sure how free trade would have played out but putting up(general) trade barriers isolates an economy, if that isolation is favorable given your current situation then the tariffs are helpful and for an industrializing nation which has more people and raw materials than anyone else in an industrializing world as we were, then yes that situation was probably pretty favorable. Could be argued the industrialized nations enforcing free trade through various international organizations has seriously hampered today's industrializing nations(save the rare powerful ones). Tariffs are the most grey policy area I've ever seen and whether or not they are good or bad depends entirely on the situation. For an industrialized consumer based economy they tend to be bad. I will say this, the whole line that tariffs are bad because Hoover's tariffs caused the Depression is misleading, a those tariffs were pretty general and much higher than any specialized tariffs we see today, they were also right in the middle of one of the worst economic downturns in history. That comparison used to discredit the concept entirely is false, though in a world where everyone expects free trade they need to be wielded carefully to avoid retaliation, in the 19th century, tariffs were expected, if you raised your rates a few percent here and a few percent there, it didn't have the potential to be an international incident unlike today where it's hard not to see a sudden change in a consistent policy of free trade as a big middle finger.