Openness in the Gilded Age
By Bryan Caplan
A great debating point by Don Boudreaux:
[Pat Buchanan] frequently asserts that 19th-century America’s policy of relatively
high tariffs, along with its impressive economic growth, proves that
protectionism promotes prosperity. End of story; full stop; no
further analysis is necessary. Fact A’s simultaneous existence with
fact B proves that A caused B.
Well, 19th-century America also had open immigration. So Mr.
Buchanan ought to join the ranks of those of us who support a return to
that policy. After all, according to the tenets of his own
epistemology, the mere fact that booming 19th-century America had open
immigration proves that open immigration promotes – or at least doesn’t
hamper – vibrant economic growth.
At first glance, Don’s merely saying that if “post hoc, ergo propter hoc” is good for the goose, it’s good for the gander. But I spy a deeper point: On balance, it looks like the U.S. was more open to international competition during the Gilded Age than it is today. Barriers to the free flow of goods were moderately higher, but barriers to free flow of labor were much lower. And remember: labor’s roughly 70% of the economy.
I take this as further evidence that (some) libertarians’ effort to distance themselves from the policies of the Gilded Age are deeply mistaken. Yes, there are important ways that we’re freer today. But during the Gilded Age, many of libertarians’ most controversial ideas actually prevailed.