Protectionism: Past and Future

[dcsmart]

I rarely agree with the classically liberal (i.e. libertarian) The Economist magazine. But if they can openly agree with Marx on the revolutionary nature of the bourgeoisie (“Two Billion more bourgeois“; Feb 12, 2009), then I’ll concur with them on the dangerous possibilities of a return of American trade protectionism. And that’s where our agreements end.

The democratic left should be against the “Buy American” provision in the stimulus package. Improving the working conditions of Americans rests on not cutting off trade with the rest of the world. Our grandparents might remember the “Hawley-Smoot Tariff Act” during the Great Depression. This bill increased tariffs to Civil War levels. A domino effect followed, with other states raising tariffs. Global trade fell and the economic crisis worsened.

We say “socialism will be international or it will not be.” The same global appeal applies to the living standards of workers. A stimulus bill that advocated for fair trade such as in our Renegotiate NAFTA plan would not only be morally better, but have greater viability. Even though the “Buy American’ provision provides some short-term employment in the U.S., a fall in international trade will inevitability hurt workers elsewhere. What good does a few jobs do if more have no work?
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FULL ARTICLE
http://theactivist.org/blog/protectionism-past-and-future

[happyslug]

1. The problem is the “Hawley-Smoot Tariff Act” WORKED for America

“Hawley-Smoot Tariff Act” did little or no harm to the US market, basically because the US was a new exporter (Mostly of oil, people forget the US was the #1 oil exporter prior to the 1950s, as the 1950s became the 1960s the oil exports of the US dropped till we became a net importer about 1970).

Given that everyone wanted oil in the 1930s, the “Hawley-Smoot Tariff Act” had little affect on the US, but a huge affect on Europe. “Hawley-Smoot Tariff Act” may even have made the Depression less severe in the US then it could have been, while making it more severe in Europe and the rest of the oil importing world.