America's Protectionist Takeoff 1815-1914

This book is like a series of 20 mini biographies concerning important but nearly unknown political economy thinkers and "activists" during America's protectionist takeoff. I'm partial to biographies, so it was an enjoyable read. It's a shame this book is not getting wider exposure.It's a 1975 rewrite of his 1968 dissertation, with some material added (I believe) in 2010. The 1975 printing had only 100 copies.The book reviews and chronicles the diversity of protectionist thought. The title is accurate. He provides a lot of context, and I enjoyed the writing. Their thinking spanned topics such as evolution, religion, physics, slavery, and agriculture. It shows they had a lot of insight that J.S. Mill was not aware of. It's perfect for a historian who's primary interest is economics, or an economist who was not aware of these economists or needs an "off the beaten path" background in protectionism.The 2010 preface explains why this book is important today:"Having replaced Britain as the world's major industrial and creditor power after WWI, the US adopted free trade and open financial markets on precisely the grounds its protectionists [of the 1800's] criticized Britain for doing. American economic strategists had learned the lesson that free trade benefits the strong at the expense of the weak [by trading low-wage resources for high-wage industrial goods, undermining the ability to build capital and future potential]. Instead of examining the path by which the US built up its economic strength, foreign countries have adopted today's 'free-market' Washington Consensus. This approach misses the strategy by which the US rose to industrial supremacy after the civil war."A key point of the book "The Shock Doctrine" is that is it possible to use "free trade" to "rape" poor countries of their low-wage resources by using those resources to manufacture expensive goods and sell them back to the poor countries at a higher price. This prevents them from being able to acquire debt-free capital or experience in high wage production. In the case of the U.S., we have preached free trade even as we have had subsidies on agriculture. This book shows in detail the thinking that was behind 1800's America doing the opposite of what we have recently advised other countries to do. The evils chronicled in the "Shock Doctrine" do not have to occur intentionally through the IMF and world bank. Merely religiously following free trade theory (wrongly believing comparative advantage can solve all ills) can achieve the same results. Protectionism has this historical evidence to back it up, and much of the thinking that led it has been lost, excepting this tome. Of particular interest to me as an engineer is that they were aware of the importance of having access to low interest loans (or direct tax revenue) to intelligently build infrastructure needed to efficiently use energy to replace low-wage human labor. Is this not the foundation of all human "progress" in the past 50 years? 200 years? People too often think technology is the driving force of modern progress. But the key is that technology should use energy more efficiently, not technology in and of itself. Has the standard of living in the U.S. improved any since the PC was born? Since we outsourced our labor with the help of an overvalued dollar? Free trade would exclaim we should have had fantastic progress, and yet even with great advances in free trade, technology, low wage foreign labor, and a previously strong dollar, it's hard for me to see much improvement since I was 15 years old 30 years ago. Unproductive financialization and modern monetary theory are two other aspects that Dr Hudson covers in his blog that explain the lack of tremendous progress in the past 30 years that we should have experienced.England used similar protectionism in its rise, and the currency peg employed by China is like a broad-spectrum tariff or subsidy. The most fantastic growth stories of the past 40 years protected (or at least intelligently promoted) local industry in target foreign markets: Norway, Korea, Japan, Taiwan, and Singapore are the best examples. I should mention that their nearly-free access to technology from advanced countries was another key. It appears that in a world of efficiently producing industry, new entrants desperately need protectionism if they don't want to become economic colonies useful only for their resources. China's "tariff" and surplus of labor has helped the U.S. give away its primary "resource", industry, in exchange for our valued dollar. But that value can be traced to distant but important roots in protectionism. In hindsight, we needed to revert back to protectionism that would have prevented a negative balance of payments (not just trade deficit) so that all those military and trade dollars did not come back as treasury debt, getting us drunk on dollar hegemony.More government (Democrats) or less government (Republicans), or more or less money printing is not what we need. We need more intelligent government and less dumb government, rather than religiously following a "more" or "less" doctrine. Competition with others and life itself is not easy. We have to be smart in how we run our country. We need government to invest to make us more valuable WORKERS who can better produce the things we NEED with long-enduring infrastructure that keeps our products competitvely priced. Any economics that does not have efficiently using energy to move matter for our needs as its foundation is fundamentally flawed. American economists understood this in the 1800's. The physics of energy and matter are the foundation of all science such as biology and chemistry. Economics is also not science without this foundation, and these pragmatic 1800's Americans are the only economists I know who point this out.BTW, a lot of artificial intelligence is based on seeking energy minimization in the neural network, which is identical to seeking the lowest cost (Eric Drexler promoted economical thinking machines explicitly). But the AI machines must be given a goal toward which the minimal energy state can progress. Likewise, government is (supposed to be) guided by people to define the goal of the low prices (such as equitable distribution of wealth and minimal 3rd party costs such as pollution). The primary drawback in my mind is that there is nothing in the government-marketplace balance and check system to stop overpopulation.

America's Protectionist Takeoff 1815-1914 should be mandatory reading for all students of economics, finance, business, and history. The notion that free trade is the only viable economic perspective, often assumed to be the case in universities these days, is to be ignorant of so much, including the most fundamental debate in nineteenth century American politics - both before the Civil War and after. Furthermore, reading Michael Hudson's account of the development of The American School of Political Economy gives one fine examples by which to understand that economic philosophy does not develop in a vacuum. Every perspective comes with its biases - more strongly in economics than elsewhere due to financial incentive lurking behind the various viewpoints. That there is an argument for tariffs, even an argument for isolationism, many would deny. But the fact is every industrial nation got its economic feet on the ground by exercising its sovereign right to impose import restrictions, generally against the free trade arguments and the urgings of the British. And the ideas put forth by the American School were highly influential in this regard. I strongly urge you to get this book and read all about it.

Every American should be required to read this book by the time they turn 21. it tells an incredibly well researched story of the unique American political economy that developed in the 19th century to counter the pessimistic free trade ideas of Britain and how they were gradually abandoned as America started to take Britain's place as a world power. Michael Hudson provides wonderful historical and biographical context for each generation of American protectionists and shows how intimately related the politics of the time and protectionist political economy were. Any attempt to teach 19th century American history without the information contained here will result in a warped, even devastatingly flawed, view of American History.The only Disappointment this book inspires is the disappointment that it took this long to be written and the story it contains hasn't been more widely told. In conclusion, this book is critical to understanding the development of America, the history of protectionism and the roots of free trade dogma in today's politics.If the world doesn't learn how the united states became an industrialized nation, today's developing countries will never industrialize themselves.

This is absolutely amazing and insightful book. Michael Hudson talks about the forgotten American political economy in the 1800 - 1900. He also talks about how the protectionist measures as well as high wage led economy were instrumental to the success of the US economy.