Peddling Protectionism: Smoot-Hawley and the Great Depression

by Douglas A. Irwin (Preface)

A history of America's most infamous tariffThe 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.

Genres: Economics, History, American History, Nonfiction

240 pages, Kindle Edition

First published January 1, 2011

About the author

Douglas A. Irwin

An economic historian, he is the John French Professor of Economics at Dartmouth College, one of the eight Ivy League universities in the United States, and a research fellow at the National Bureau of Economic Research (NBER). He previously taught at the University of Chicago Booth School of Business and served as an economist for the Federal Reserve and the President's Council of Economic Advisers. He has published seven books on U.S. economics and trade policy, making him a leading authority in the field. He is also a frequent contributor to The Economist, The Wall Street Journal, The New York Times, and The Financial Times.

Reviews

[Marks54 · Rating 4 out of 5]

This is a short economic history of the Smoot-Hawley Tariff Bill of 1930. The author is an economics professor at Dartmouth who has a more recent book on trade policy that I am thinking of putting on my queue. This book was published in 2011 and I thought about it then but Congress did not move towards protectionism. Then came the 2016 election and the President’s announcement last week that he would initiate new tariffs on steel and aluminum. ... so I got the book. I am not disposed towards tariffs and do not know of many economists, conservative or liberal, who are. It is too easy not to see the magic of reciprocity as well, such that our tariffs are almost certain to be match by others. Given that we are much more vulnerable to trade wars than in the past, it is fairly scary to hear about how trade wars are easy, fun, and winnable.

The Smoot-Hawley Tariff is the poster child of bad trade legislation and much of the bad press is justified. The law almost certainly failed to do what it intended, left the US economy worse off, and contributed to the collapse of trade in the 1930s. While it certainly did not cause the Great Depression, it also did not help matters. The book is fairly straightforward and details the political hash that went into Congressional bill making at the time. I find it hard to image how it could be better today and do not doubt the wisdom of turning over much trade policy discretion to the Executive Branch. Tariffs and protectionism would be different today than they were in the 1930s, of course, but Irwin is very effective at detailing how even given exaggerations of its effects, the Smoot-Hawley Tariff is not the way to go going forward. Perhaps protectionism got such a bad name for a reason - maybe it is not very good policy.

The book is well written and fairly nontechnical for an economics case history. They are a few tables and some basic models but nothing that cannot be skipped. I don’t know if Trump will go through with tariffs, but if he does, you will hear more about Smoot and Hawley. This book will provide some much needed context.

[Edward Champion · Rating 4 out of 5]

Hats off to Douglas Irwin for putting together an immensely readable and solid overview of the Smoot-Hawley Act and its impact on America (and other countries). The first thing that a reader in 2025 learns is that the Republicans are essentially mimicking the same deranged rhetoric used to peddle this monetarist nonsense back in 1930. The second thing one learns is that the tariffs back resulted in Cuba descending into an economic quagmire that resulted in the 1933 revolution. You could make a persuasive argument that Fidel Castro would not have happened if Smoot-Hawley had not have happened. There are liberal passages here from many lawmakers at the time. It wasn't a surprise to see "Fighting Bob" La Follette arguing on behalf of the people. And there are also numerous editorial cartoons that persuasively reveal just how pronounced S-H was in culture at the time. Have we learned anything? Of course not. It's all spelled out here. Tariffs are a very bad idea for any liberal democracy.

[Eleanore · Rating 4 out of 5]

Not being an expert in economic history, I found this to be a surprisingly clear, readable, and well-researched little book on a subject towards which many historians are sadly prone to ill-informed hyperbole...

[Awais · Rating 5 out of 5]

A thorough and clear read pulling the cover back on one of the most significant trade policy legislation in our country's history, the Smoot-Hawley Tariff Act. Irwin details the motivation behind the legislation(to aid farmers who were struggling during the 1920s), the process to get it enacted(which was riddled with accusations of corruption and poor behavior), and its impact both at the time and even today. He makes it clear that nowadays people both exaggerate its role in causing the Great Depression accompanied by those seeking to minimize the downsides of protectionist policies. Altogether Irwin does an admirable job of laying down the facts about the legislation and provides it with clarity that I wish more in the genre had.

[James Empson · Rating 4 out of 5]

Seemed to me a pretty balanced review of the effect of US tariff policy in 1930 and how it operated within the political and economic framework of the day. Cutting to the chase, if it was intended to offer relief to midwestern farmers suffering from changes in demand, yields (as a function of climate, technology, tiling etc) and prices - it didn’t. The overall reduction in exports, global trade and the USA’s standing probably all suffered as the result of so-called domestic policy decisions incurring retaliatory actions within a worldwide economic depression. Fun read :)

[Simon Riddell]

Irwin's excellent, if not the best, on this historical topic.

[Stephen R. Stock · Rating 4 out of 5]

Smoot Hawley protectionism

A thorough review of the Smoot Hawley tariff act and its impact on the U.S. and global economy of the 1930’s.

[K C · Rating 1 out of 5]

I usually like good economic history books, but this was a disappointment. No earth-shaking economic revelations or conclusions and it read like an economic term paper. It was perhaps aimed at people who only knew Smoot-Hawley from the extreme myths that have surrounded it and did help to debunk those. However, as the author shows, it was still a lousy piece of legislation, even if it wasn't as bad as some of the non-economists have said it was.

[The Book : An Online Review at The New Republic]

IF YOU think Congress is worse than ever, you weren’t around in 1930. It was then Congress passed the Smoot-Hawley Tariff—a piece of protectionist folly that raised the levies on nearly nine hundred categories of imports. Read more...

[Lance Cahill · Rating 4 out of 5]

Good overview of various aspects of the Smoot-Hawley tariff. A nice and short read with numerous references to other work for the interested reader. Useful for one interested in the general consensus of the effects of Smoot-Hawley without needing to read the great amount of research deriving from the tariff .