BACK in 1906, an insurgent politician called Joseph Chamberlain (once known as Radical Joe, he had switched to the Conservatives over home rule for Ireland) lured the government into a campaign in favour of tariffs. The result was a devastating defeat for the Conservatives. The opposition Liberal party recognised that tariffs were a tax on the goods bought by the poor, in particular food and warned that the policy would lead to a “smaller loaf”. They portrayed tariffs as “stomach taxes”.
A hundred years ago, then, it was easy to make protectionism unpopular. Now it seems, despite the prosperity brought by 70 years under a more open trading system, that opinion may have changed; tariffs are favoured by “populist” politicians.*
The trick for modern populists been to focus on the positive benefits to American workers in terms of jobs, rather than the adverse impact on consumers. In fact, protectionism is highly unlikely to restore american manufacturing jobs, which are under threat from automation as well as globalisation, as our <a…Continue reading