America’s two original sins: slavery and the tariff
My Mercatus colleague Don Boudreaux, at his indispensable blog Café Hayek this week, dismantled the arguments recently made at the website The Daily Reckoning in an article claiming that President Trump’s tariffs are “as American as apple pie.”
It’s a historical fact that tariffs were high during much of America’s first century and a half as a nation. But that doesn’t mean that tariffs were the right policy then or now. Slavery was also sanctioned by the U.S. Constitution and was an integral part of our nation’s economic system in its early decades, but we can all recognize in hindsight that it was wrong.
This is not to equate tariffs with slavery, morally or economically. Slavery was an abomination. Tariffs were and are, most economists would argue, an unwise policy choice, but they remain within the bounds of normal government action.
While plainly different as government policies, tariffs and slavery were intertwined from the earliest days of our republic. The nation’s Founding Fathers were profoundly right about a lot of things, for which we should all be grateful, but they were at best ambivalent about both slavery and the tariff. You could call them the two original sins of the American republic, one by far the greater, but both with lasting effects that have rippled through our history to the present day.
Sketching that history with the broadest strokes, slavery was embedded in the South until the end of the Civil War. During that same antebellum period, the federal government imposed high tariffs, both to raise revenue, but also to protect domestic producers. Henry Clay’s “American System” of protection reached its zenith in 1828 with the Tariff of Abominations, which took the average tariff to 62%. This prompted a threat from South Carolina to secede from the union, not over slavery, but over the damage done to its cotton export economy from the tariffs.
What came to be known as the Nullification Crisis ended when President Jackson threatened to send in federal troops, but he also brokered a gradual lowering of duties that continued through the 1850s. By 1857, the average duty had fallen to 20 percent, high by today’s standards but much lower than the 1828 peak. Economic historian Douglas Irwin, in his magnificent 2017 book, Clashing over Commerce: A History of U.S. Trade Policy, concludes definitively that it was not the tariff that stoked the Civil War but slavery.
Slavery and the tariff are also tied together by their negative impact on human liberty. A contemporary observer in France, the political economist Frederic Bastiat, observed in 1850 in his seminal essay “The Law,” that while the United States was a beacon of liberty and limited government,
Nevertheless, even in the United States there are two questions, and only two, which, since it was founded, have several times put the political order in danger. And what are those two questions? The question of slavery and that of tariffs, that is, precisely the only two questions concerning which, contrary to the general spirit of this republic, the law has assumed a spoliative [destructive] character. Slavery is a violation, sanctioned by law, of the rights of the person. Protective tariffs are a violation, perpetrated by the law, of the right to property; and certainly it is remarkable that in the middle of so many other disputes this twofold legal scourge, a sad heritage from the Old World, should be the only one that can perhaps lead to the dissolution of the Union.
The two issues tended to break along regional and party lines. Southern Democrats were largely in favor of slavery and free trade. Northern Republicans opposed slavery while supporting protective tariffs for industry. The one sub-group that tended to get both issues right, in my view, were many Northern Democrats, whom Irwin notes opposed slavery but continued to support limited government and lower tariffs. They were the true practitioners of the “the general spirit of this republic.”
After the Civil War Republicans ratcheted tariffs upward again to protect certain domestic manufacturing sectors. Slavery came to an end officially with passage of the post-war amendments, but once Reconstruction died with a whimper in the 1870s, the oppressive rule of Jim Crow settled over the nation, denying blacks their God-given rights to participate as full citizens in American society. And that is how American remained as we entered the crucible of the Great Depression and World War II. For all our great achievements and progress, we remained a racist and protectionist nation.
The dawn of the post-war era marked a fundamental turning point for both trade and race relations. On January 1, 1948, the United States entered into the General Agreement on Tariffs and Trade with our major trading partners, launching the era of multinational trade negotiations and declining tariffs abroad and at home. Seven months later, on July 26, President Harry S. Truman issued Executive Order 9981 abolishing racial discrimination in the U.S. Armed Forces. The decades since then have been marked by unsteady but real progress in expanding the civil rights of minorities and the freedom to trade for all Americans.
Looking back on our history, it should be clear that what is “American as apple pie” is not the “twofold legal scourge” of slavery and the tariff, but the ability of Americans to find a way to put them both behind us as we pursue a more free, just, and open society.
