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Pat Buchanan is No Economist

Summary:
Here’s a letter to CNS News: Editor: Patrick Buchanan’s “Tariffs – The Taxes That Made America Great” (May 14) is bundle of blunders. First, Buchanan praises tariffs as a tool both for raising massive amounts of revenue and for supplying formidable protection against imports. He misses the fact that tariffs that work well on one of these fronts works poorly on the other. If the goal is revenue, the ideal tariff would keep out no imports; if the goal is protection, the ideal tariff would raise no revenue. Buchanan is oblivious to this reality. Second, Buchanan confuses correlation with causation. It’s true that for much of the high-growth 19th century the U.S. had high tariffs. But back then the U.S. also had either no or low taxes on other economic activities, little regulation by

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Here’s a letter to CNS News:

Editor:

Patrick Buchanan’s “Tariffs – The Taxes That Made America Great” (May 14) is bundle of blunders.

First, Buchanan praises tariffs as a tool both for raising massive amounts of revenue and for supplying formidable protection against imports. He misses the fact that tariffs that work well on one of these fronts works poorly on the other. If the goal is revenue, the ideal tariff would keep out no imports; if the goal is protection, the ideal tariff would raise no revenue. Buchanan is oblivious to this reality.

Second, Buchanan confuses correlation with causation. It’s true that for much of the high-growth 19th century the U.S. had high tariffs. But back then the U.S. also had either no or low taxes on other economic activities, little regulation by government, secure private property and contract rights, a culture of entrepreneurship, and – especially challenging to Buchanan’s worldview – open immigration.

Economic research into 19th-century U.S. economic growth and policy lends little support to Buchanan’s claim.

For example, Dartmouth economist Douglas Irwin found that in the 19th century the U.S. and other land-abundant countries “relied on customs duties to raise government revenue and also enjoyed favorable growth prospects, with little link between the two.”* Further, in his 2017 book, Clashing Over Commerce, Prof. Irwin reports that “[t]he most underrated international factor behind America’s industrialization [during the later half of the 19th century] was the work done by unskilled immigrants who labored in the manufacturing industries and by skilled immigrants who facilitated the absorption of new technology.**

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

* Douglas A. Irwin, “Interpreting the Tariff-Growth Correlation of the Late 19th Century,” American Economic Review, May 2002, page 169.

** Douglas A. Irwin, Clashing Over Commerce (Chicago: University of Chicago Press, 2017), page 285.

……

See also this important 2005 paper by Cecil Bohanon and T. Norman Van Cott on 19th-century American economic growth.

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Don Boudreaux
He is a professor of economics at George Mason University in Fairfax, Virginia. Previously, he was president of the Foundation for Economic Education.

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