In the rogues’ gallery of disastrous economic policies, the protectionism of the United States in the Great Depression, codified in the notorious Smoot-Hawley tariffs, has pride of place. A new book by Douglas Irwin, [amazon_link id=”069115032X” target=”_blank” ]Peddling Protectionism: Smoot-Hawley and the Great Depression[/amazon_link], examines the effect the legislation had: did it, as believed, play a central role in bringing about a collapse in global trade and seriously exacerbating the depression? Irwin concludes that the Act was based on no economic logic, and was a blatant example of pork-barrel politics. Even so, it played a subsidiary role to demand shocks (especially monetary ones) in prolonging and deepening the weakness of the economy. The book is very informative on the Congressional politics of the time, and the current role of Congress in setting trade policy. There is nobody to match Irwin on this subject, and it’s a short and accessible book. It is a great introduction for students as well as general readers.

However, the status of the Smoot-Hawley tariff as a bogey man has proven useful ever since, Irwin suggests. The great inertia of the American political system means that the post-war openness to trade is actually hard to overturn in practice. The experience of the post-crisis policy reaction is certainly encouraging in this respect, although I’m not sure I’m as relaxed about the dangers as the book suggests I ought to be. Still, fears of a return to Great Depression style protectionism have not entirely come to life, although there is evidence of a pick-up recently in protectionism. The excellent CEPR Global Trade Alert reports on this document policy reactions in some detail. The book concludes that the far greater openness of the US (and other economies) now than in the 1930s make protectionism a less likely policy reaction; but equally, if governments ever do reach for those trade policies, the disruption will be far greater.

[amazon_image id=”069115032X” link=”true” target=”_blank” size=”medium” ]Peddling Protectionism: Smoot-Hawley and the Great Depression[/amazon_image]

[amazon_image id=”1907142193″ link=”true” target=”_blank” size=”medium” ]Tensions Contained… for Now: The 8th GTA Report (Global Trade Alert)[/amazon_image]