Opening America's Market: U.S. Foreign Trade Policy Since 1776. - book reviews

Reason, Jan, 1997 by Ramesh Ponnuru

Whenever Pat Buchanan is confronted with an economic argument, he invokes "history" to prove his point. During the presidential primary season, Buchanan responded to criticism from Sen. Phil Gramm (R-Tex.) by telling Human Events, "Phil has a Ph.D. in economics; that's his problem. He doesn't know history." He also argued that George Will's "disparagement of tariffs...is rooted in an ignorance of his nation's past." The four faces on Mount Rushmore, he says, were all protectionists; and the United States developed into a mighty industrial nation during the golden age of protectionism.

Buchanan cites a number of writers for intellectual support. Of these, Alfred E. Eckes Jr. - a Reagan appointee to the International Trade Commission and a history professor at Ohio University - is the most academically respectable. With Opening America's Market: U.S. Foreign Trade Policy Since 1776, Eckes provides protectionists with a "usable past." They have not been slow to take advantage of it. In addition to Buchanan, the peripatetic provocateur Michael Lind is an admirer of Eckes. In The New York Times Book Review, Lind wrote that the book "unites scholarly rigor with a policy maker's sensitivity to the political factors influencing trade....One hopes that future historians will provide their readers with a perspective on the past as helpful as the one Mr. Eckes has given us."

The book's tone and style are certainly scholarly; Eckes disavows any desire "to pursue an ideological agenda." His conclusions are almost always carefully hedged, or offered as mere conjectures.

Yet the tendentiousness of Eckes's presentation of the evidence nevertheless becomes clear as soon as he starts discussing the trade views of the Founding Fathers. Eckes quickly glosses over the fact that the United States was born in revolt against, among other things, Britain's corrupt, unfair, and restrictive mercantilist system. Thomas Jefferson's 1774 remonstrance to King George III, which Eckes gives short shrift, outlines the colonists' complaints.

Jefferson himself emerges from Opening America's Market as a late-in-life convert to "economic nationalism." As president, he did indeed impose an embargo, but only to stop the seizure of American vessels by warring European powers. (It didn't work, but it did cause a depression in the northeast and a minor secession crisis - a failure Eckes totally ignores.) In retirement, Jefferson's hostility to England led him to embrace a voluntary buy-American policy, not a protective tariff.

The arguments of free traders are ignored in the discussion of early America, as they generally are throughout the book. Eckes pays no attention to important documents like the Free Trade Memorial drafted by Albert Gallatin in 1831. Gallatin, secretary of the treasury under Jefferson and Madison and perhaps the foremost early American theorist of free trade, appears once in the book, delivering what sounds like a protectionist quote; Eckes omits its wartime context. Andrew Jackson, a critic of protectionism, gets the same treatment.

Even early American protectionists' views are distorted. Eckes doesn't distinguish between the views of Alexander Hamilton and those of Henry Clay. Hamilton didn't reject Adam Smith but thought there were exceptions to his theory. He hoped that high American wages and low taxes would encourage mass immigration, thus developing America's home market. We may safely assume that this is not quite what Eckes (or Buchanan, or Lind) has in mind. Hamilton's protectionism was narrowly focused. He preferred direct subsidies to tariffs and wanted exemptions from tariffs for businesses that imported raw materials. And he advocated (low) tariffs against the backdrop of a degree of economic freedom within the United States that no longer exists.

Clay, on the other hand, was more like today's Buchananites in his trade views, complete with a cultural pessimism and xenophobia Hamilton lacked. Clay asserted, as Buchanan and Eckes do today, that the burden of tariffs falls exclusively on foreigners, not American consumers. Protectionism, in other words, is free. It doesn't cause prices to rise, and Eckes even asserts that it doesn't necessarily cause imports to drop (in which case, it's hard to see what's being protected). To square his views with the historical record, Eckes must insist that protectionism has no correlation with any other factors. Throughout the book, he essentially adopts the "shit happens" theory of economics to explain historical developments.

The evolution of the tariff during the Civil War is an interesting story, but not one well told in Opening America's Market. Eckes trumpets an Abraham Lincoln statement that free trade "must result in the increase of both useless labour, and idleness; and so, in proportion, must produce want and ruin among our people." He tactfully declines to sketch the argument that precedes Lincoln's conclusion - that the tariff promoted useful labor by eliminating the "useless labour" of transportation.