Did Mercantilism Promote Economic Growth in the U.S.?
Some commentors here at the Cafe have insisted that – as “Brutus” put matters today when commenting on this post – “If the history of mercantilism showed that it weakened an economy, then I would agree with you [that protectionism harms an economy]. But the data indicates [sic] the otherwise, including the history of the US.” This myth is quite common. But the best evidence disputes it. First, here’s a paper on this very topic by Dartmouth economist Douglas Irwin. The abstract of Doug’s paper is this: Were high import tariffs somehow related to the strong U.S. economic growth during the late nineteenth century? This paper examines this frequently mentioned but controversial question and investigates the channels by which tariffs could have promoted growth during this period. The paper shows that: (i) late nineteenth century growth hinged more on population expansion and capital accumulation than on productivity growth; (ii) tariffs may have discouraged capital accumulation by raising t