Protectionism vs globalization

Protectionism and Empire: an interview with Marc-William Palen. (Scopri di più su: ToynbeePrize.org)

‘Free Trade England Wants the Earth.’ Pro-Republican Judge magazine depicts US protectionism shielding the country from the British free trade spider’s grasp, 27 Oct. 1888. Source: he ‘Conspiracy’ of Free Trade: The Anglo-American Struggle Over Empire and Economic Globalisation, 1846-1896 (Cambridge University Press, 2016).

The last twenty-four months have witnessed world-wide dissent against the current regime of trade liberalisation. The United States disengaged from the North American Free Trade Agreement (NAFTA), Britons renounced the EU, and in Tokyo, Sydney, Lima, and other cities across the Pacific Rim thousands protested a potential transpacific trade partnership. While the popularity of protectionism is not unexpected, its recent embrace by political elites everywhere is more surprising. This is particularly true of the United States, which one president ago was still steering the global economy towards freer trade.

In The ‘Conspiracy’ of Free Trade: The Anglo-American Struggle Over Empire and Economic Globalisation, 1846-1896 (Cambridge University Press, 2016), Marc-William Palen traces the roots of this debate to the United States in the 1840s. There began a political and ideological battle between Victorian free trade cosmopolitanism and economic nationalism which lasted the remainder of the century and beyond. Talks about tariffs dominated American political life. Through them, Palen is able to tell a much broader story. The Republican and Democratic parties were transformed in the process. Debates about trade influenced the character of American imperial and commercial expansion, as well as the contours of the Anglo-American struggle for empire and globalisation. Palen’s argument that economic nationalism dominated the period also forces us to rethink received notions of the US Gilded Age, which is usually portrayed as an era dominated by laissez-faire and free trade.

We recently met with Marc-William Palen in Bristol, where he resides. He discussed nineteenth century American political thought, the political economy of Anglo-American globalisation and empire in the Victorian Era, and his future research plans. Dr Palen is a historian at the University of Exeter. The ‘Conspiracy’ of Free Trade is his first book. You can follow him via Twitter: @MWPalen.

INTERVIEWER

Can you tell us something about yourself? How did you transition from studying classics as an undergraduate to modern globalization and imperialism as a graduate student?

MARC-WILLIAM PALEN

I was at the right place at the right time. In the summer of 2001, in the middle of my classics degree at the University of Texas at Austin, I registered in a spoken Latin program at the Vatican. At that time, anything after the Holy Roman Empire was journalism to me. However, while I was in Rome, the G8 was being held in Genoa. Rome was filled with anti-globalization protesters, as was the rest of Italy. Things turned violent. A protester in Genoa was even killed by the Carabinieri. This was one of my first encounters with anti-globalism. Then, a week after I came back home to the United States, 9-11 happened. All this awoke an interest in the history of modern globalization and how it had shaped the world today.

Jump forward a few years, after studying the classics I found myself working towards an actuarial science degree. I randomly signed up for a class on the British Empire with someone named A. G. Hopkins because I thought it sounded interesting. As I later discovered, Professor Hopkins had only recently arrived at the University of Texas (UT) by way of Cambridge, Geneva, and Harvard. His teaching, mentorship, and scholarship changed the way I viewed the history of empire and globalization. Sometime in the second semester, he pulled me aside and asked if I had ever considered a PhD in history. Professor Hopkins took me under his wing, and I joined the history PhD program at UT in 2007. There I also had the good fortune to be able to work closely with Wm. Roger Louis, as well as H.W. Brands and Mark Lawrence for the American side of things.

After finishing my PhD in 2011, I crossed the Pacific. I spent a year at the US Studies Center at the University of Sydney. It was a very exciting place to be in the midst of the 2012 presidential election. After Sydney, I briefly taught at Tufts before coming here to Exeter. At the time of my arrival, Andrew Thompson and the department were in the midst of launching the Centre for Imperial and Global History, which has since grown by leaps and bounds.

INTERVIEWER

From this came your book. There you trace the tensions between two economic ideologies that shaped Anglo-American visions of empire and globalization. On the one hand are free traders influenced by Richard Cobden (1804-1865), the Victorian Era’s famed radical British free trade and peace advocate. On the other are ‘Listian nationalists,’ whom you characterize after the German intellectual Friedrich List (1789-1846). We know about Cobden, but List is not a household name. Can you tell us more about him and walk us through the broader debate?

PALEN

List has actually made a bit of a comeback in recent decades. For example, Ha-Joon Chang, a heterodox economist, wrote a popular book in 2002 (Kicking Away the Ladder) borrowing from List’s 1841 National System of Political Economy. In the 1990s, James Fallows also wrote a fascinating piece about List in The Atlantic (‘How the World Works,’ December 1992) after he came across a Japanese translation of List’s critique of free trade, and Fallows used it to highlight debates about what I would call ‘Cobdenite cosmopolitanism’ and ‘Listian nationalism’ in Japan. But, essentially, List was a critic of free trade. He argued that states needed strong protectionist policies alongside strong national institutions and imperial expansion in order to develop ‘infant’ industries. This was very much the opposite of the hands-off, non-interventionist, anti-imperial, free trade arguments of Richard Cobden and his followers.

But you are right. Today List is not a household name, despite what myself and others consider to be his strong influence on nineteenth century American history. Briefly, List was a German exile who settled in the United States in the 1820s. He then became instrumental in providing intellectual support for the American System of economic nationalism, which roughly consisted of industrial subsidies, centralized banking, and high tariffs to foster national consolidation. He then went back to Germany as an American citizen. There, his work and activities provided intellectual support for the making of the Zollverein (the German Custom Union). After Britain unilaterally turned to free trade in 1846, his protectionist ideas became ever more popular in the developing world of the late nineteenth century. In sum, I think it’s fair to say that he became the most influential theorist of nineteenth century economic nationalism.

INTERVIEWER

When in the United States, List lived in industrialising Pennsylvania. What was going on there? And how can we assess his influence?

PALEN

This was what we might call the first wave of Listian nationalism in America. Upon his arrival, List quickly became involved with Philadelphia’s protectionist intellectuals. This might have been what drew him there in the first place. Once there, he became close to Mathew Carey, probably the most successful early American publisher. An Irish immigrant, Mathew was Anglophobic and thus opposed most British-inspired ideologies, including free trade. His son, Henry Carey, took over the publishing business and, much like his father, became the leader of a pan-US protectionist intelligentsia centered around Philadelphia.

List was therefore working within this group and very clearly left his mark. In the book, I suggest that you can find his imprint in Henry Carey’s work and GOP politics, which are more commonly associated with American protectionism. List published and lectured a lot, and in many ways Henry Carey was simply echoing and popularizing what List was doing. This is particularly evident in how he argued that the United States, as a developing nation, needed to install protectionist tariffs vis-à-vis Britain and other more industrially advanced economies.

The second wave crashed upon American shores in the late nineteenth century as more and more US students went to study at German universities, and came back imbued with the ideas of the List-inspired German Historical School. The second wave went beyond economics and was part of the wider German intellectual influence on the United States, as explored by Daniel Rodgers in Atlantic Crossings: Social Politics in a Progressive Age (1998), among others.

In the Gilded Age, one of the things Rodgers identifies is the educational teachings of German universities on a group of young American intellectuals who would eventually be very influential in a plurality of domains. List’s ideas were the dominant paradigm for economic studies in Germany and what would come to be called the German Historical School. The German Historical School was in fact established in large part to counter the British-born free trade ideology then famously known as Cobdenism or the ‘Manchester School.’ The German Historical School established itself in Germany, then in Oxbridge, and eventually in the United States via this important group of American students who studied in Germany. This solidified and broadened List’s influence in the United States by the late nineteenth century. For instance, the Wharton School (Trump’s alma mater) was founded in the 1880s at the University of Pennsylvania to provide a Listian counterpoint to the perception that Cobdenite free trade theories were taught without balance in American universities. Columbia, Harvard, and the University of Wisconsin, Madison, among others, also brought on professors embued with the German Historical School’s anti-free-trade ideas.

And yet, despite this rich transatlantic intellectual exchange and debate over trade and empire, in most American history undergraduate courses, you might be lucky to receive one lecture about the Gilded Age and the corrupt politics of the era, probably focused on the ‘robber barons’. I think one of the reasons why we give so little attention to this period is precisely because economic issues were so central to politics. Conflicts between free trade and protectionism were one of the main political cleavages. But this bugbear word ‘tariff’ puts off a lot of historians and deters some students. My intention is in part to show that those debates can be very interesting. They can be tied to larger issues of economic development, ideology, globalization, international politics, and empire-building.

INTERVIEWER

Methodologically or conceptually, how does one connect the dots between economic thought and changes in political economy?

PALEN

Sometimes it is tricky, but in my case it does help when intellectuals serve as advisors for powerful individuals and institutions. For example, American Cobdenites such as David Ames Wells and Edward Atkinson became unofficial advisors to President Grover Cleveland. The rest is about identifying trends, changes in discourse, and the level of ideological opposition. When I initially started doing research and tracing the origins of this debate after I found FDR’s Secretary of State Cordell Hull being referred to as the ‘Tennessee Cobden.’ I was quite surprised and wondered when these references about British free trade entered American political discourse. I came to realize that to trace the origins of Cobdenism in the United States, I needed to focus not on the middle of the twentieth century, when histories of US trade liberalization usually start, but on the 1830s and 1840s. It is there that you see radical American intellectuals clearly starting to embrace Cobden’s ideas.

As a result, something I really did not expect to do was to study the ways in which free trade would be used in the context of emancipation. That is, I hadn’t at first considered asking what happened to abolitionists after the US Civil War, and one of the things I discovered was that many of the most radical abolitionist leaders became the leaders of the burgeoning American free trade movement. They embraced Cobden’s philosophy connecting free trade, non-intervention, world peace and anti-imperialism. They believed that the more integrated the world markets, the less likely war. For them, free trade thus became the next step in emancipating humankind. American free traders were fascinated by what they perceived as the entwined successes of Britain’s antislavery and free trade movements. The American Cobdenite free trade movement was therefore in part a legacy of the transatlantic antislavery movement, which was both a cause of and a crystalizing factor for their Anglophilia. That’s also why you find this fascinating use of antislavery rhetoric in the Gilded Age tariff debate.

INTERVIEWER

The two non-consecutive Cleveland administrations (1885-89, 1893-97) are key to your argument. How can we relate them to what we have discussed? Or rather, how can we now think of Grover Cleveland as an interesting and complex historical figure?

PALEN

He used to be seen as such! Before current trends in the historiography of American imperialism, Cleveland was a favorite among historians. Yet the way we have treated Gilded Age imperialism has blurred some lines. This also goes back to the common but misleading laissez-faire perception we have of late nineteenth century American political economy. In the 1960s and 1970s, historians started to apply Robinson and Gallagher’s imperialism of free trade thesis to the US Empire. They sought to uncover American free trade imperialism in Latin America and the Asia Pacific.

But American informal imperialism at that time wasn’t the same as British free trade imperialism, and this becomes clear once we understand the protectionist nature of the Gilded Age American political economy and foreign trade policy. What I try to point out is that under Republican-controlled executives (they controlled it for most of the period between 1861 and FDR), the GOP reformed itself to become the party of protectionism, big industry, and imperial expansion. If we recognize the economic nationalist bent of Republican economic policy, then the later part of the nineteenth century is not about laissez-faire and free trade, but is a story of extreme state intervention in the marketplace. Government-subsidized internal improvements like the railroad, the Homestead Act (parceling out land for westward expansion), and high tariffs – not just for revenue but for protecting domestic industries as enunciated by List – all make more sense.

Back to Cleveland, his administrations help us see how the GOP’s economic nationalist policies were challenged in those rare moments when you had a free trader in the White House. In this light, Cleveland’s two non-consecutive administrations are important because they are the only years of a pro-free-trade presidency in the late nineteenth century. And what did he do? He surrounded himself with American Cobdenite free traders. They were literally card-holding members of the Cobden Club. The original Cobden Club was created in Britain just after Cobden’s 1865 death. Its largest foreign membership was in the United States and these American Cobdenites were a regular who’s-who of radical abolitionists, pacifists, and anti-imperialists such as William Lloyd Garrison, Charles Sumner, and Henry Ward Beecher. Their numbers were not huge, but they were very vocal and influential. These same American members soon opened branches of the Cobden Club across the US north and west, to the dismay of American protectionists.

‘Cleveland Will Have a Walk-Over.’ Republican magazine Judge depicts Grover Cleveland balancing precariously on a fraying rope, holding a balancing pole labeled ‘Free Trade Policy’ and carrying the Democratic Party donkey and John Bull, a common representation of Britain, on his back. John Bull’s back pocket is stuffed with ‘Cobden Club Free Trade Tracts.’ Judge, 25 Aug. 1888.

‘Under which Emblem?’ The pro-Republican Tariff League Bulletin explains to its readers a month before the 1888 presidential elections that they must choose between the ‘battle shields of the two parties’—either the shield of the Cobden Club [left], which will ‘bind you in perpetual poverty,’ or the American Protective League [right], representing American manufactures, commerce, and agriculture alike. Tariff League Bulletin, 8 Oct. 1888, 166.
Beyond Britain, I say that Cobden-inspired ideas were most popular in the USA, but it was also politically dangerous, where free trade was held in suspicion. In the United States, this makes their influence under the Cleveland administrations all the more remarkable. His secretaries of state, war, agriculture, interior, and treasury were all members of the Cobden Club, as were his leading economic advisors. Once we start seeing that American free traders connected trade, pacifism, and anti-imperialism it makes a lot more sense that attempts were made during the Cleveland administrations to counter the GOP’s increasing drive for a protectionist empire in places like Samoa, Hawaii and Latin America.

INTERVIEWER

Is this why Cleveland was once a more popular figure among historians?

PALEN

It is certainly part of the reason why. Another group that used to interest historians were the GOP’s minority of free traders, then known as ‘Liberal Republicans’ owing to their subscription to classical liberalism. In 1884, they defected to the Cleveland Democrats. They become infamously known as the ‘Mugwumps’ for turning against the GOP. Historians have used this movement to show how Cleveland was an interesting change from the dominant arc of American politics in the late nineteenth century. All this was, however, revised in the late 1950s and 1960s by the so-called Wisconsin School of American imperial history, led by W. A. Williams, who published his famous The Tragedy of American Diplomacy (1959). This work conflated free trade with protectionism, American imperial expansionists with their opponents, Democrats with Republicans. Gilded Age American imperialism suddenly became a story of bipartisanship and ideological consensus in establishing an Open Door Empire. As a result, we lost the rich debates over trade and empire that shaped American engagement with the emerging global economy. Partly, this revisionism stemmed from a neo-Marxist conception of capitalist imperialism for which all forms of capitalist market expansion are seen as imperialistic, whether coercive or not. In this light, Cleveland was recast as an advocate of informal empire alongside his Republican protectionist contemporaries.

Of course, you see similar debates in British imperial history, especially in the ongoing pushback against the Robinson and Gallagher thesis. The Wisconsin School used Robinson and Gallagher to portray America’s economic rise in the late nineteenth century as one that also entailed a growing informal empire of free trade. While provocative, this has had unintended consequences for the study of late nineteenth century US politics. By the 1880s, the Republicans were as far away from free trade as one can get. As I argue, the Republican’s imperial search for markets instead came about owing to the imperialism of economic nationalism. What I try to show is that using British free trade imperialism as a comparison is less useful than using it as a contrast. Republican economic nationalist imperialism was in large part a response to Britain’s free-trading empire and its perceived malign influence on American politics, industry, and hemispheric power.

INTERVIEWER

For those economic nationalists, free trade was seen as subversively serving British interests. American Cobdenites were labelled as pro-British conspirators. How did this come about?

PALEN

This stemmed from a fear that the more industrially advanced Britain was trying to undermine American ‘infant’ industries. In proper Listian fashion, Republicans were afraid that the dumping of cheaper British goods would stunt industrial growth before America’s economy matured and could then compete on a similar playing field. They saw British and American Cobdenite advocacy of free trade not as a utopia, but as an attempt to damage American economic interests and turn the United States into an informal British colony. For Anglophobic Republicans, any attempt to tear down America’s high tariff walls was therefore seen as a British-sponsored conspiracy.

The American Cobdenites of course also had their blind spots. As much as they were critical of the GOP’s imperialism of economic nationalism, they were such admirers of Britain that they tended to have little criticism about Britain’s own form of informal imperialism. This explains why aspects of their arguments rarely incorporated anything beyond a worldwide Anglo-Saxon imagined community.

INTERVIEWER

Your book is not only concerned with American politics. Some chapters are devoted to what is going on in response to American economic nationalism. What was happening in London and in the British white settler colonies?

PALEN

List’s writings were translated and published for a British audience in 1885 through the efforts of Samson Samuel Lloyd, whom you might recognize from Lloyd’s Bank. He was also a leader of the protectionist movement in Britain. When thinking about everything we have been discussing, we cannot forget that most of this happened during the Long Depression (1873-1896). And thus, within the context of economic depressions, we see an almost natural tendency to look inwards, to turn towards economic autarky. Lloyd was reacting as such as leader of a burgeoning protectionist movement across the British Empire. This tariff reform movement gained even more popularity during the Edwardian period with Joseph Chamberlain leading the way, and intersected with debates around imperial federation and trade preference.

This brings us back to the earlier point about linking ideas with historical change. To map out how ideas travel and influence policy decisions, we can turn to the translation of List’s work by a figure such as Lloyd and couple it with Lloyd’s support for protectionist policies in and out of government. Lloyd believed he (and List) understood the late nineteenth century global economic order much better than did Britain’s Cobdenites. He therefore argued that the List-inspired German Historical School’s recommendations could work well for Britain, even though it was more economically advanced than most economics.

This confluence of Listian ideas and policymaking became ever more pronounced as economic nationalism swept the globe across the late nineteenth century, including among the British Empire’s white settler colonies, protectionist developments which contributed to the eventual British abandonment of free trade in 1932. This allowed me to bring Canada, South Africa and Australia into my story. Ironically, the white settler colonies were given increasing fiscal autonomy in the later nineteenth century in part because of the British metropole’s laissez-faire approach to imperial management. This allowed the settler colonies to turn to protectionism at different moments in the late nineteenth century, even though the metropole still espoused free trade.

As I describe, List’s work was read and his infant industrial argument was turned into policy in Canada quite early. Leading politicians and industrialists like John A. Macdonald and Alexander Galt espoused protectionism as a way to protect Canada from more advanced American industries. This, alongside the 1890 McKinley Tariff, allowed the Conservatives to narrowly win the 1891 federal election. They ran on a policy of protectionism and imperial trade preference, while the Liberals ran on a free-trade policy favouring North American economic integration. The same thing was happening in the Australian colonies. Again, in Victoria, people were reading and discussing List, and these Australian Listians came out on top when it came to deciding fiscal policies following Australian federation in 1901. In South Africa, when Cecil Rhodes became premier of the Cape Colony, he helped to create and then to solidify a South African customs union. This, too, was in part a response to the highly protectionist 1890 McKinley Tariff in the United States. Rhodes explicitly argued for a kind of economic retaliation and British imperial trade preference. We therefore see a world-ranging moment of economic protectionism that is about the United States and Germany, but is also in no small way about Britain’s white settler colonies, despite the free trade consensus in London.

INTERVIEWER

Did the debates you bring to light fuel tensions elsewhere? I am thinking of Japan or of the conflicts surrounding the ‘open door’ policy in China.

PALEN

The answer goes back to the Wisconsin School I mentioned earlier. They took this notion of the open door in China and applied it more broadly. An earlier open door theorization had been made by Charles Beard in the 1930s. This was then updated by the New Left in the 1960s and ‘70s. In their hands, the ‘open door’ became associated not only with equal market access, but with free trade. These were in fact different things, but are now conflated as such in the historiography.

Late nineteenth century Japan is another good example. Economic nationalism and governmental support for infant industries were prevalent there following the 1868 Meiji Restoration. It is more than coincidental that these policies were ratcheted up just when we see the first Japanese translation of List’s work and its influence upon influential Japanese economists. Mark Metzler has done some great work on this in Global History: Interactions between the Universal and the Local (2006), edited by A.G. Hopkins.

Much like the leading anti-imperialists of the age, I contend that there was a correlation between this global upsurge of protectionism and the nineteenth century upswing in nationalism and imperialism. And yet only recently have scholars rediscovered the imperial dimensions of List’s writings. The common way of looking at List is still through his critique of British free trade imperialism, whereupon economic nationalism becomes strictly an anti-Manchester school ideology. What is missing is that, alongside national consolidation and protectionism, List also advocated for colonialism. He argued that developing industrial nations like Germany and the United States needed to turn not only to protectionism, but also to imperial expansion, and this was exactly what happened in Germany, the United States, Japan, and elsewhere. For List, these were all prerequisites for successfully competing with the British Empire on the world stage.

INTERVIEWER

Has a new research project arisen from all of this?

PALEN

Actually, what we just talked about has led to my new book project. It is an international economic history of peace and anti-imperialism. It is more ambitious in scope and scale and will go from the mid-nineteenth century to the mid-twentieth. The first book was very much focused on transatlantic movements and the British World. But all these other elements we have touched upon, such as the late-nineteenth century rise of Japan, are indicators that these debates transcended the Anglosphere. This is part of my new focus. I want to push even further the global dimensions of economic cosmopolitanism and economic nationalism. Cobdenites remain a big part of the story. Indeed, economic cosmopolitanism was a huge factor in international pacifism during and after the First World War. It crosses political and ideological boundaries in ways that I think many people will find surprising.

INTERVIEWER

Seeing Brexit Britain, the current forced renegotiation of NAFTA, as well as the protests against the Comprehensive Economic and Trade Agreement (CETA), the Transpacific Partnership (TPP), and Transatlantic Trade and Investment Partnership (T-TIP) your book seems very topical. Do you have any comments about what is happening at the moment?

PALEN

Donald Trump winning the presidency has continued to make The ‘Conspiracy’ of Free Trade remarkably topical. The parallels are amazing. And yet, in a way – I know historians should never say this – what we are seeing is also historically unprecedented. Granted, Trump’s xenophobia, protectionism, jingoism, and populism parallel the GOP of the Gilded Age. They might well have been taken directly from the late nineteenth century Republican playbook. What is unprecedented from a global historical perspective is the timing. In 1932, Britain, the free-trade hegemon since 1846, turned away from free trade because the rest of the world had already done so. The British thus became the last to adopt protectionism. What is unprecedented today is that with Trump in the White House the United States, the leader of the global economic system and main advocate of trade liberalisation since 1945, is now the first to advocate turning away from the very system it helped create. As a result, the global uncertainties that the future holds are at least as worrying as the populist revival of Gilded Age politics.