Democratic Protectionism Follows the Wrong-Headed Policies that Led to the Great Depression

Pete du Pont, a former governor of Delaware, in the WSJ (March 22, 2004):

The cruelest economic tragedy of modern times was the Great Depression, a disaster deepened and accelerated by the Smoot-Hawley Tariffs of 1930. They raised import duties to the highest level in American history, igniting a global trade war. In three years U.S. exports to Europe declined to $784 million from $2.3 billion, and U.S. imports from Europe declined to $390 million from $1.3 billion. Global international trade fell by 66%.

Three-quarters of a century later the liberals' campaign drumbeat is to return to the wrongheaded policies of yesteryear that destroyed jobs and devastated the economy. Former Democratic presidential candidate John Edwards is a protectionist zealot, and the designated nominee, John Kerry, is a sympathizer. Protectionism is the gospel of labor unions, the Democratic Party, and about half the Republicans in the U.S. Senate, who voted for a protectionist amendment to forbid the awarding of federal government contracts to companies that outsource any of the work overseas....

The trouble with protectionism, aside from its costs to the consumer, is that other nations retaliate: If America forbids the import of their goods and services into America, they will not permit export of American products to their countries. That would be costly because one factory job in five in America depends on international trade.
U.S. exports supported 12 million American jobs in the 1990s while foreign-owned firms directly employed 6.4 million American workers--Honda's 13,000 jobs in Ohio and BMW's 4,300 in South Carolina, for example. Why would we want to adopt protectionist policies that put all these jobs and people and good products at risk? If Messrs. Kerry and Edwards become Smoot and Hawley, a spiraling economic and employment decline will be the result; America will go backwards.

The truth is that market economies are in constant flux. Job opportunities change with time and technology. In the '30s farmers' jobs were one quarter of the American economy; today they are one-fortieth. Productivity is up, food prices are down, and fewer people work on farms. Is this a bad thing?

Horse-drawn carriages were replaced by cars, typewriters by computers, and E-ZPass has no doubt replaced some toll-taking highway jobs, all good things although a lot of jobs disappeared as new ones were created. The gales of creative destruction that shape market economies created 18 million new jobs in America in the past 10 years. But the important thing to understand is how that total was reached: 339 million old jobs disappeared while an astounding 357 million new ones were created in their place.