NYE: That’s a long project I worked on for over 15 years of my life, and it led to my 2007 book, War, Wine, and Taxes. It starts from the fact when, early on in my career, I was doing some work in Second Empire France and looking at their tariff policies, and one of the things I did routinely was to compare average tariffs in Britain and France, something which apparently, at the time I was doing it, no one had ever bothered to do.
One of the things that shocked me was that, from about the 1850s, or certainly the 1860s, to the end of the 19th century, France had, in fact, much earlier, going back to the ’30s, France seemed to have lower average tariffs than the British did, for I would say three-quarters of the 19th century. It’s not till the end of the 19th century that Britain catches up with France in terms of openness of trade.
This is from “Conversations with Tyler: John Nye.” I’ve enjoyed a huge percent of these conversations between Tyler Cowen and various people. But this is by far my favorite for the insights of the guest. The whole thing is well worth reading.
More on the above issue:
COWEN: What are the intellectual origins of this myth of free-trade Britain? Where does it come from? Are we overrating the British in every other way, or is there some specific reason?
NYE: Well the specific reason there definitely has to do with the Corn Laws. With the repeal of the Corn Laws, Britain also repealed lots and lots of tariffs, but if you go back— Taussig first noticed this — that they removed lots of tariffs, but often on things that were a trivial part of trade. In contrast, many of the tariffs that even Adam Smith complained about in The Wealth of Nations, in particular the wine tariffs, were not touched.
And:
Britain had a comparative advantage in manufacturers, so they were willing to go to free trade in manufacturers, but they were very, very protectionist when it came to consumption items and, in particular, beverages — wine, but also all alcoholic products, rum, sugar, tea, coffee, et cetera.
Check out also John’s comments about Napoleon III.
READER COMMENTS
Jon Murphy
Nov 21 2018 at 7:52pm
This semester I am taking John Nye’s Economics of Institutions class at GMU. He really is a fascinating and engaging lecturer.
Rob Rawlings
Nov 21 2018 at 11:10pm
British Wine is rubbish. You would need very high tariffs to protect that trade. Not sure Britain ever produced rum, sugar, tea or coffee. Was this trade into the British Empire ?
Rob Rawlings
Nov 21 2018 at 11:32pm
A very cursory duckduckgo search brought up
http://www.ehs.org.uk/dotAsset/11cabff5-3f6a-4d69-bba0-1086d69be6c7.pdf
‘It fell to Gladstone, as Chancellor of the Exchequer in the 1850s, to complete
Peel’s revolution. By 1860, he had removed import duties on 400 items; tariffs
were retained, for revenue purposes, on less than twenty imported ‘luxury’
goods [13]. These were commodities which were in ‘inelastic’ demand, (that is,
changes in their price affected demand for them very little) and could be relied
upon to bring in a steady income for the state. They were also chosen to bear
duties because they were goods that had no direct impact on business costs.
Many of them were not produced in Britain at all and, if they were, a
corresponding excise, or internal tax, offset the import tax. Four of the imports
chosen to bear duties – tobacco, tea, spirits and wine – produced 95 per cent of
the revenue from customs in 1880 [8].’
Which seems to indicate the aim of British tariffs was revenue raising rather than protection.
Mark Brady
Nov 22 2018 at 8:48pm
If you have access to JSTOR, you can read John V. Nye’s original article (1991) here.
https://www.jstor.org/stable/pdf/2123049.pdf
But you should also read Douglas A. Irwin’s reply to Nye (1993) here.
https://www.jstor.org/stable/pdf/2123180.pdf
Which may in turn encourage you to read Nye’s reply to Irwin (1993) here.
https://www.jstor.org/stable/pdf/2123181.pdf
That said, I endorse the argument that Rob Rawlings cites in his second comment, namely, that the aim of British tariffs was to raise revenue rather than to “protect” domestic producers.
Comments are closed.