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Peddling Protectionism: Smoot-Hawley and the Great Depression

Author

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  • Douglas A. Irwin

Abstract

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. Peddling Protectionism tells a fascinating story filled with valuable lessons for trade policy today.

Suggested Citation

  • Douglas A. Irwin, 2011. "Peddling Protectionism: Smoot-Hawley and the Great Depression," Economics Books, Princeton University Press, edition 1, number 9430.
  • Handle: RePEc:pup:pbooks:9430
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    Cited by:

    1. Michael D. Bordo, 2017. "An Historical Perspective on the Quest for Financial Stability and the Monetary Policy Regime," Economics Working Papers 17108, Hoover Institution, Stanford University.
    2. Bown, Chad P. & Crowley, Meredith A., 2014. "Emerging economies, trade policy, and macroeconomic shocks," Journal of Development Economics, Elsevier, vol. 111(C), pages 261-273.
    3. Ram Mudambi, 2018. "Knowledge-intensive intangibles, spatial transaction costs, and the rise of populism," Journal of International Business Policy, Palgrave Macmillan, vol. 1(1), pages 44-52, June.
    4. Douglas A. Irwin, 2019. "U.S. Trade Policy in Historical Perspective," NBER Working Papers 26256, National Bureau of Economic Research, Inc.
    5. Edmund Amann & David Lawson, 2013. "International Crises And Developing Economies: Linkages And Recent Experiences," Journal of International Development, John Wiley & Sons, Ltd., vol. 25(8), pages 1035-1049, November.
    6. Gawande, Kishore & Hoekman, Bernard & Cui, Yue, 2011. "Determinants of trade policy responses to the 2008 financial crisis," Policy Research Working Paper Series 5862, The World Bank.
    7. Bown, Chad P. & Crowley, Meredith A., 2013. "Import protection, business cycles, and exchange rates: Evidence from the Great Recession," Journal of International Economics, Elsevier, vol. 90(1), pages 50-64.
    8. Nina Boberg-Fazlic & Markus Lampe & Maja Uhre Pedersen & Paul Sharp, 2021. "Pandemics and protectionism: evidence from the “Spanish” flu," Palgrave Communications, Palgrave Macmillan, vol. 8(1), pages 1-9, December.
    9. David S. Jacks & Dennis Novy, 2020. "Trade Blocs and Trade Wars during the Interwar Period," Asian Economic Policy Review, Japan Center for Economic Research, vol. 15(1), pages 119-136, January.
    10. Kris James Mitchener & Kevin Hjortshøj O'Rourke & Kirsten Wandschneider, 2022. "The Smoot-Hawley Trade War [‘Could Europe run Greece? Lessons from U.S. fiscal receiverships in Latin America, 1904–34’]," The Economic Journal, Royal Economic Society, vol. 132(647), pages 2500-2533.
    11. Sophie Meunier, 2013. "The dog that did not bark: Anti-Americanism and the 2008 financial crisis in Europe," Review of International Political Economy, Taylor & Francis Journals, vol. 20(1), pages 1-25, February.
    12. Schlör, Holger & Venghaus, Sandra, 2022. "Measuring resilience in the food-energy-water nexus based on ethical values and trade relations," Applied Energy, Elsevier, vol. 323(C).
    13. David S. Jacks, 2011. "Defying Gravity: The 1932 Imperial Economic Conference and the Reorientation of Canadian Trade," NBER Working Papers 17242, National Bureau of Economic Research, Inc.
    14. Ali Kabiri & Harold James & John Landon-Lane & David Tuckett & Rickard Nyman, 2020. "The Role of Sentiment in the Economy: 1920 to 1934," CESifo Working Paper Series 8336, CESifo.
    15. Bogetoft Pedersen, Peter & Diakantoni, Antonia, 2020. "Lessons learned and challenges ahead for the WTO Trade Monitoring exercise," WTO Staff Working Papers ERSD-2020-03, World Trade Organization (WTO), Economic Research and Statistics Division.
    16. Arvind Subramanian, 2013. "Preserving the Open Global Economic System: A Strategic Blueprint for China and the United States," Policy Briefs PB13-16, Peterson Institute for International Economics.
    17. Prusa, T.J., 2013. "The Great Recession and Import Protection: A Look Back at the U.S. Experience," Commissioned Papers 146656, Canadian Agricultural Trade Policy Research Network.
    18. Gabriel Siles-Br�gge, 2014. "Explaining the resilience of free trade: The Smoot-Hawley myth and the crisis," Review of International Political Economy, Taylor & Francis Journals, vol. 21(3), pages 535-574, June.
    19. Christopher E.S. WARBURTON, 2017. "Trade Treaties and Deglobalization," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 17(1), pages 71-88.
    20. Bernard Hoekman & Douglas Nelson, 2018. "21st Century Trade Agreements and the Owl of Minerva," RSCAS Working Papers 2018/04, European University Institute.
    21. Kris James Mitchener Author e-mail: kmitchener@scu.edu & Kirsten Wandschneider Author e-mail: kirsten.wandschneider@univie.ac.at & Kevin Hjortshøj O’Rourke Author e-mail: akevin.orourke@nyu.edu, 2021. "The Smoot-Hawley Trade War," Working Papers 20210061, New York University Abu Dhabi, Department of Social Science, revised Mar 2021.
    22. Spoerer Mark & Streb Jochen, 2014. "Die Weimarer Republik in der Weltwirtschaftskrise: Geschichte oder Erfahrung?," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 15(4), pages 291-306, December.
    23. Bown, Chad P., 2014. "Trade policy instruments over time," Policy Research Working Paper Series 6757, The World Bank.
    24. Eric Bond & Mario Crucini & Joel Rodrigue & Tristan Potter, 2013. "Misallocation and Productivity Effects of the Smoot-Hawley Tariff," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(1), pages 120-134, January.

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