Tag Archives: tariffs

An Important Distinction

Master of the Senate, the third volume of Robert Caro’s biography of Lyndon Johnson, opens with a lengthy history of the world’s greatest deliberative body from America’s founding up to Johnson’s time. On page 44, describing the end of a lengthy period of Senatorial stagnation in the early 20th century, Caro writes about how leadership deliberated:

The “Senate Four” or the “Big Four,” as they were known, still met in summer at Aldrich’s great castle in Narragansett, near Newport – four aging men in stiff high white collars and dark suits (Aldrich, being at home, might occasionally unbend to wear a blazer) even on the hottest days, sitting on a colonnaded porch in rockers and wicker chairs deciding Republican policy – a policy that was still based on an unshaken belief in laissez-faire and the protective tariff.

Caro is a masterful biographer and a fine writer, but he is sometimes a little confused on economics. Protective tariffs are government interventions in the market, and therefore the precise opposite of laissez-faire. Then, as now, Republican leaders were much more pro-business than pro-market. This is an important distinction to make. Failing to make it can lead to egregious — and avoidable — errors.

What Does Protectionism Protect?

Classic reductio ad absurdum.

Modern technology could easily grow oranges and grapes in hothouses in the arctic and subarctic countries. Everybody would call such a venture lunacy. But it is essentially the same to preserve the growing of cereals in rocky mountain valleys by tariffs and other devices of protectionism while elsewhere there is plenty of fallow fertile land. The difference is merely one of degree.

Ludwig von Mises, Human Action, p. 395.