Smash the WTO; the 19th century version

Was there a backlash against globalization... 120 years ago?


Andrew Leonard
December 1, 2006 3:54AM (UTC)

A cartoon from the Sept. 12, 1888 issue of Puck magazine kicks off "A Tale of Two Tariff Commissions and One Dubious 'Globalization Backlash,'" a 2002 exercise in economic history by Stephen Meardon, an economics professor at Williams College. (Thanks to Jonathan Dingel's Trade Diversion blog for the pointer.)

The caption reads: "THE SIAMESE TWINS OF TO-DAY. One of Them Thrives on it -- but it is Death to the Other." The image depicts two men, linked together at the hip. On the left is a scrawny, woebegone farmer in a decrepit straw hat, holding a wad of papers that reads "Mortgage on House and Farm." On the right is your prototypcial top-hatted fat cat, with a fat "Cheque Book" sticking out of his jacket pocket and a badge reading "Monopolist" pinned to his chest. And written on the link between them, as if by Satan himself (or barring that, Milton Friedman) are the ominous words "Free Trade."

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Meardon's objective is to review the era of globalization that preceded World War I, and ask what lessons can be learned from the debates that raged at that time to better inform ourselves about the present. (More recently, historian Niall Ferguson has been exploring similar themes.)

Meardon writes:

An idea... holds that the previous globalization sowed the seeds of its own destruction. Its consequences for income distribution impelled populations and their political representatives to unlink their capital, labor, and commodities markets from the world economy."A political backlash developed in response to the actual or perceived distributional effects of globalization, write O'Rourke and Williamson. "The backlash led to the reimposition of tariffs and the adoption of immigration restrictions, even before the Great War." Amidst the swell of protests about the inequities of globalization from Seattle to Quebec City to Genoa, and wherever else multilateral meetings to discuss market integration convene, the lesson of the backlash thesis is heard as this: attend to the inequities that globalization breeds, or people will not accept globalization.

Meardon's thesis is that the "backlash thesis" is incorrect. That in fact, the debate over the relative merits of protection and free trade that raged across the United States from the end of the Civil War onwards had nothing to do with the claim that globalization breeds inequity, or facilitates the powerful to exploit the poor. He supports his contention with a close reading of the arguments made before two Tariff Commissions held in the late 19th century. Whether or not you buy his argument, the paper makes for interesting reading, if not least for how it reminds us that there is absolutely nothing new under the sun, and the current tussle over globalization has some very deep roots in the economic history of the United States.

But Meardon's most masterful, or clever, or fiendishly manipulative (I can't decide which) flourish is only revealed at the end. For it turns out that he has altered the cartoon! That in fact, it is not "Free Trade" by which the plutocrat is crushing his pathetic Siamese-linked twin! No, the original cartoon had the word "Tariffs" instead! And indeed, according to Meardon's portrayal of the evidence, in the 1880s, defenders of free trade were the ones making the argument about exploitation -- declaring that monopolist domestic manufacturers were pushing high tariffs at the expense of the masses of agricultural workers and farmers. (In passing, Meardon notes that that arch-industrialist Andrew Carnegie was an ardent support of high tariffs.)

Meardon's paper was my first venture into the politics of tariffs and free trade in the late 19th century, so I have little independent basis with which to judge his claims. Meardon is also careful to say in his conclusion that "To accept that there was no globalization backlash influencing U.S. trade policy [in the 1880s] is not to imply that there is no such backlash [now] -- still less that there should not be one. Nor is it to imply that backlash cannot reverse globalization... There may be other historical support for it, even if not from nineteenth century American trade policy. More importantly, most observers are probably less persuaded of the lesson by history than by more direct evidence of the growing resentment of globalization."

In that context, another quote cited by Meardon from O'Rourke and Williamson, writing in their 1999 book "Globalization and History: The Evolution of a Nineteenth-Century Atlantic Economy" seems positively prophetic: "unless politicians worry about who gains and who loses, they may be forced by the electorate to stop efforts to strengthen global economy links, and perhaps even to dismantle them."

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If Andrew Carnegie was alive today, would he still be a supporter of high tariffs, or would he have offshored his steel business to China? An impossible question to answer, but Meardon's historical exploration, whether one is wont to bash globalization or protectionism, is useful nonetheless, because it reminds us to look at the details of each policy debate as they are grounded in contemporary reality, rather than let us get distracted by sweeping generalizations and the ideological predispositions we bring to the table.


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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