The Op-Ed History of America

The Op-Ed History of America

Mini Teaser: Many American policymakers and scholars believe they have learned the lessons of nineteenth and twentieth-century history for U.S. foreign policy. Three such "lessons" dominate discussion: the Lesson of American Development; the Lesson of the Pax

by Author(s): Michael Lind

Completely missing from Acheson's account is any acknowledgment of the fact that the industrialization of much of Europe, to say nothing of the United States, came about as a challenge to the British--as well as any mention of the fact that the British exported capital to the U.S. as an alternative to exporting goods, which were kept out by tariffs. This is like writing that trans-Atlantic traffic rose dramatically in the early 1940s, without mentioning that there was a war on. Acheson, in short, is rewriting history, to make the multilateral free-trade system presided over by the post-World War II U.S. appear to be a continuation of an older British-centered system, rather than the innovation it really was.

This analogy between mid-nineteenth century Britain and mid-twentieth century America is the basis of "hegemony theory" in contemporary international relations scholarship. The leading hegemony theorist, Robert Gilpin, writes in War and Change in World Politics: "the Pax Britannica and Pax Americana, like the Pax Romana, ensured an international system of relative peace and security." Despite its familiarity, this parallel is false. Victoria's Britain, unlike Eisenhower's America, did not preside over an integrated, liberal world economy, nor did it reign as a global hegemonic power providing free security for grateful allies.

As Joseph S. Nye, Jr. points out in his 1990 book Bound to Lead, "Although Britain embraced free trade with the repeal of the Corn Laws in 1846, its decision was unilateal and did not rest on the ability to force other major countries to cut tariffs." The United States and most of continental Europe were protectionist during most of the era from the Napoleonic Wars to World War I (indeed, in practice, until the 1960s). Only Britain and some of its colonies, together with the Netherlands, were liberal economies. The openness of the nineteenth-century British economy was remarkable--Britain exported about a third of its output, and invested about 40 percent of its savings overseas--but unrepresentative. Indeed, thanks to the success of the other industrial countries in protecting their home markets, by 1913 two-thirds of British exports were going to semi-industrial and non-industrial areas. If one ignores Britain and India and various nominally independent British dependencies that had been forced to sign so-called "unequal treaties," the entire era from the Industrial Revolution onward, far from being a Golden Age of Free Trade, can more properly be described as a worldwide Age of Protectionism.

During the era of greatest free trade in continental Europe, 1873-1890 (a peak not reached again until the 1960s), Europe was plunged into a depression as devastating as that of the 1930s--partly, it seems, because of free trade (most historians agree that a glut of agricultural commodities depressed markets in general). During this time, the United States, with its tariffs at historic highs, enjoyed one of its greatest bursts of sustained growth. Only after the continental countries abandoned free trade for protection did economic growth, and even international trade, revive again (since domestic economic growth is often more important in creating trade than is trade growth).

The other great economic success story of the nineteenth century, Germany, developed by following American-style protectionist capitalism. Hamilton's doctrines were spread to Germany by Friedrich List, a political exile who edited a German-language newspaper in Pennsylvania and wrote a primer for American protectionism, Outlines of American Political Economy, in 1827 (List also became a founder of the Reading Railroad and of what became the National Association of Manufacturers). List warned that "the worst of all things" would be for American farmers to import their manufactures from Britain in return for agricultural exports. Returning to Germany as a U.S. consul, List published The National System of Political Economy in 1844. He argued for a federal, constitutional and democratic Germany modeled on the United States, with a Hamiltonian industrial policy encouraging the growth of German manufacturing behind a common tariff. List helped inspire the Zollverein (customs union) which became the nucleus of Bismarck's German nation-state and the modern Federal Republic. The "Historical School" of German economists, who studied real-world national experiences instead of concentrating on mathematical refinements of eighteenth-century speculations, dominated German economic thought well into the twentieth century.

The American model influenced Japan indirectly, through List and the Germans. After the Meiji Restoration, the Japanese government modeled its catch-up industrialization on that of Bismarckian Germany. The so-called "Asian model" of developmental capitalism is really nothing other than the nineteenth-century American-German model of Hamilton and List, abandoned in its original homelands. The Japanese economic historian Miyohei Shinohara writes that List would be surprised by the success with which Japan has applied the theory of infant-industry protection.

Just as Japan and other East Asian countries in recent decades have taken advantage of access to more liberal economies while protecting their own markets, so the late nineteenth-century United States and Germany, both protectionist, mercantilist states informed by the tradition of Hamilton and List, along with protectionist white dominions like Canada, Australia, and New Zealand, took advantage of the openness of the British market. At a somewhat later stage, so did Imperial Japan. The attempt of turn-of-the-century British conservatives led by Joseph Chamberlain to counteract American and German mercantilism with a protectionist "imperial preference" policy failed. With World War I, however, Britain began to abandon free trade, and became thoroughly protectionist in the 1930s. Alarmed that their access to the lucrative British market might disappear, the protectionist Americans suddenly became interested in reciprocal tariff reductions (a lesson for those who maintain that attempts to retaliate against Japanese protectionism will have no effect on Japan).

"It is difficult to find another case where the facts so contradict a dominant theory than the one concerning the negative impact of protectionism, at least as far as nineteenth-century world economic history is concerned," writes economic historian Paul Bairoch. "In all cases protectionism led to, or at least was concomitant with, industrialization and economic development." The only case in which liberalization arguably aided industry was in post-1846 Britain, which had a commanding technological lead over its competitors: "Furthermore, at that moment Britain had behind it at least a century and a half of protectionism."

Nineteenth-century Britain, then, did not preside over an integrated, global free market like that supervised by America after World War II. Neither was Britain considered by other powers to be a benign military hegemon preserving world peace and order. While not entirely a myth, the characterization of the period from 1815 to 1914 as a "century of peace" under British auspices involves serious exaggeration: the Crimean War, pitting Britain and France against Russia, was a major European war; the British were helpless to prevent the Franco-Prussian War of 1870-71; and Britain and Russia spent much of the nineteenth century engaged in geopolitical rivalry (the "Great Game"). The Russians certainly did not think of Britain as a benevolent hegemon. Nineteenth-century American leaders, even those who were anglophile in culture, thought of the British navy as the major threat to the security of the United States. The American attitude changed only after 1898, when the British decided to appease the United States and remove its fleet from the West Indies, in order to concentrate on winning the more important Anglo-German naval race; for the same reason, the British also appeased the Japanese and the Russians.

Instead of being grateful for the supposed economic and security benefits of the Pax Britannica, two of the three newly developed industrial capitalist powers--Germany and Japan--fought savage wars with Britain in the twentieth century. The German military challenge to Britain was supported not only by German militarists, but by liberal nationalists, Catholic centrists and moderate conservatives like Max Weber, Friedrich Naumann, Otto Hintze, and Thomas Mann, who sincerely believed that Imperial Germany would benefit mankind by helping to replace a world order centered on London with a multipolar system of civilized empires: Germanic Europe, the United States, Russia, Japan and the British Empire. As Woody Allen observes in Zelig, "Britain owned the world and Germany wanted it"--or at least a substantial share.

This is not to deny the importance of Britain's role in preserving a continental balance of power, nor to argue that there were no incidental benefits to other countries of Britain's free-trade policies. The point is simply that the Pax Britannica, defined as a golden age of global free trade and a security order resting on benign and widely accepted British hegemony, never existed. Britain was a European umpire, not a global policeman. Those who argue for a Pax Americana must find better arguments than the benefits of an imaginary precedent.

The Lesson of Smoot-Hawley

Of all of the fictions of Op-Ed History, none is more familiar than the Lesson of Smoot-Hawley. The U.S. cannot negotiate any trade treaty, no matter how insignificant, without a host of journalists, politicians, and economists linking hands in a seance and summoning the Specter of Smoot-Hawley. In the tones of campers whispering a spooky story around a fire, the tale is retold: how despite a petition signed by a thousand wise economists, Congress passed, and President Hoover signed, a disastrous tariff bill that--horrors!--plunged the world into Depression, created Trading Blocs, brought Fascism to power, and caused a Terrible World War. The implication is clear--if only the U.S. had adopted free trade, there would have been no Depression, the Weimar Republic would have evolved into today's Federal Republic, and a second Russo-German War, as well as the first Japanese-American War, could have been averted.

Essay Types: Essay