“The Smoot-Hawley tariff of 1930 had a lot to do with the subsequent Great Depression.”
I’m not so sure. It’s a cause and effect thing. When there is a depression, there *has* to be a contraction in international trade. But does the contraction come first, or the protectionism?
Remember that protectionism is a long process, but a trade contraction can happen rapidly. And if the contraction has already happened, it becomes *easier* to pass protectionism, because it is a moot point.
“The Smoot-Hawley tariff of 1930 had a lot to do with the subsequent Great Depression.”
I’m not so sure. It’s a cause and effect thing. When there is a depression, there *has* to be a contraction in international trade. But does the contraction come first, or the protectionism?
Remember that protectionism is a long process, but a trade contraction can happen rapidly. And if the contraction has already happened, it becomes *easier* to pass protectionism, because it is a moot point.
Good post....the problem with the “Smoot Hawley caused/continued the Great Depression” myth is that the worldwide economy was sluggish after WW I....especially in Europe. Coupled with agricultural over-production and boom/bust real estate prices....the Great Depression had its roots in the mid 1920’s...well before Smoot Hawley came about.
Even if Smoot Hawley did not exist....there was no one to trade with...except for imperialistic Japan, Nazi Germany, and Stalin’s USSR.....the rest of the world was mired deep in economic problems.