- cross-posted to:
- economics@lemmy.ml
- cross-posted to:
- economics@lemmy.ml
Looking at the unintended consequences of tariffs and found this little tidbit.
Tariffs have long been a contentious tool of economic policy in the United States. Proponents argue they shield domestic industries from foreign competition, enabling growth and job creation. Yet, the historical record, as illuminated by scholars like Douglas Irwin in his study “Tariffs and Growth in Late Nineteenth Century America,” demonstrates that tariffs often hinder economic progress more than they help.
During the late nineteenth century, the United States maintained some of the highest tariff rates in its history. While this period coincided with rapid industrial growth, Irwin argues that tariffs were not the primary driver of economic expansion. Instead, technological innovation, abundant natural resources, and a growing domestic market played far more significant roles. High tariffs distorted resource allocation, favoring inefficient industries over more competitive sectors. This misallocation led to higher consumer prices and suppressed overall economic welfare.