Liberty Matters

Remembering Sumner the Political Economist. Part 2: The Economic Waste caused by Tariff Protection


After four years of academic work on paper money and currency matters Sumner turned his attention to tariffs with a series of lectures on “The History of Protection in the United States” which he gave to the International Free-trade Alliance in New York city in the spring of 1876.[77] This began a ten year period during which he wrote a great deal about tariffs and the need for free trade. He gave lectures to the New York Free-Trade Club, wrote letters to the editors of newspapers on free trade, and wrote position papers for bodies such as the Philadelphia Tariff Commission. After 1886 his attention turned to other topics.
This is where I take issue with Fabio Rojas's claim in "The Rivals of Classical-Liberal Social Science" that what "doomed Sumner" to obscurity was the "lack of an activist vision." In both areas of his economic interests, paper money and tariff protection, but especially the latter, Sumner had both an activist vision and was indeed very active in trying to promote free trade ideas to both government bodies as well as the general public, especially after 1883. He would do much the same thing after 1898 when the U.S. fought Spain and began its acquisition of colonies when he became active in the Anti-Imperialist League. Unfortuantely, what "doomed" him and the other laissez-faire classical liberals was not a lack of "activism" but the fact that both protectionism and colonial or imperial expansion were popular among government officials, some powerful business leaders, and the general public.
What got Sumner first engaged in "activism" was the debate which erupted because of an off-the-cuff remark in his essay “The Forgotten Man” (1883) in which he criticised the tariff protection given to the thread manufacturers of Willimantic, Connecticut (known as “Thread City”). He noted that the tariffs benefitted the “Willimantic linen company” at the expence of the forgotten men and women of America:
When you go to Willimantic, they will show you with great pride the splendid thread mills there. I am told that there are sewing-women who can earn only fifty cents in twelve hours, and provide the thread. In the cost of every spool of thread more than one cent is tax. It is paid, not to get the thread, for you could get the thread without it. It is paid to get the Willimantic linen company which is not worth having and which is, in fact, a nuisance, because it makes thread harder to get than it would be if there were no such concern. If a woman earns fifty cents in twelve hours, she earns a spool of thread as nearly as may be in an hour, and if she uses a spool of thread per day, she works a quarter of an hour per day to support the Willimantic linen company, which in 1882 paid 95 per cent dividend to its stockholders. If you go and look at the mill, it will captivate your imagination until you remember all the women in all the garrets, and all the artisans’ and laborers’ wives and children who are spending their hours of labor, not to get goods which they need, but to pay for the industrial system which only stands in their way and makes it harder for them to get the goods.[78]
This caused an uproar in the New England press which lasted for a couple of years into which Sumner threw himself with some gusto writing many letters to the editor defending his views. This period of intense free trade activity came to an end with the book Protectionism. The -Ism which Teaches that Waste makes Wealth (1885),[79] the very title of which returns us to one of the key aims of his teaching and research which Sumner had outlined in his 1873 “Introductory Lecture to Courses in Political and Social Science,” namely the duty of the political economist to identify sources of waste and the exploitation of ordinary people. In the Preface Sumner explains with some anger, moral indignation, and even religious fervour, why he took time away from “the scientific pursuits which form my real occupation, and forces me to take part in a popular agitation” against the policy of protectionism:
I have written this book as a contribution to a popular agitation. I have not troubled myself to keep or to throw off scientific or professional dignity. I have tried to make my point as directly and effectively as I could for the readers whom I address, viz., the intelligent voters of all degrees of general culture, who need to have it explained to them what protectionism is and how it works. I have therefore pushed the controversy just as hard as I could, and have used plain language, just as I have always done before in what I have written on this subject. I must therefore forego the hope that I have given any more pleasure now than formerly to the advocates of protectionism.Protectionism seems to me to deserve only contempt and scorn, satire and ridicule. It is such an arrant piece of economic quackery, and it masquerades under such an affectation of learning and philosophy, that it ought to be treated as other quackeries are treated. Still, out of deference to its strength in the traditions and lack of information of many people, I have here undertaken a patient and serious exposition of it. Satire and derision remain reserved for the dogmatic protectionists and the sentimental protectionists; the Philistine protectionists and those who hold the key of all knowledge; the protectionists of stupid good faith and those who know their dogma is a humbug and are therefore irritated at the exposure of it; the protectionists by birth and those by adoption; the protectionists for hire and those by election; the protectionists by party platform and those by pet newspaper; the protectionists by “invincible ignorance” and those by vows and ordination; the protectionists who run colleges and those who want to burn colleges down; the protectionists by investment and those who sin against light; the hopeless ones who really believe in British gold and dread the Cobden Club, and the dishonest ones who storm about those things without believing in them; those who may not be answered when they come into debate, because they are “great” men, or because they are “old” men, or because they have stock in certain newspapers, or are trustees of certain colleges. All these have honored me personally, in this controversy, with more or less of their particular attention. I confess that it has cost me something to leave their cases out of account, but to deal with them would have been a work of entertainment, not of utility.Protectionism arouses my moral indignation. It is a subtle, cruel, and unjust invasion of one man’s rights by another. It is done by force of law. It is at the same time a social abuse, an economic blunder, and a political evil. The moral indignation which it causes is the motive which draws me away from the scientific pursuits which form my real occupation, and forces me to take part in a popular agitation. The doctrine of a “call” applies in such a case, and every man is bound to take just so great a share as falls in his way. That is why I have given more time than I could afford to popular lectures on this subject, and it is why I have now put the substance of those lectures into this book.[80]
I will close with this image of the Toasts given at the annual dinner of the New York Free-Trade Club which was held at Delmonico’s restaurant in New York City in February 1885.
Two of the toasts are especially interesting. Note “The Birthday of Washington” given by McKenzie, the Secretary of the State of Kentucky (“All honor to the leader of America’s first struggle against unjust taxation”) and that by William Graham Sumner “Free Trade: The only true ”American System"".[81]
Twenty years later at another dinner in New York City, this time hosted by the Committee on Tariff Reform of the Reform Club (2 June 1906), Sumner reminisced about why he had become active in the free trade movement to begin with and why he continued to support it now:
Thirty-five or forty years ago I became a free trader for two great reasons, as far as I can now remember. One was because, as a student of political economy, my whole mind revolted against the notion of magic that is involved in the notion of a protective tariff. That is, there are facts that are accounted for by assertions that are either plainly untrue or are entirely irrational. The other reason was because it seemed to me that the protective tariff system nourished erroneous ideas of success in business and produced immoral results in the minds and hopes of the people.I cannot say that I have got any more light on the matter within the last twenty years, but it looks to me still as if the great objections to protectionism were these two.[82]
But what depressed Sumner and his contemporary Gustave de Molinari in France, who published his second set of "conversations" defending free trade in 1886 the year after Sumner's book on Protectionsm appeared, [83] was that they could not convince enough of their fellow citizens, those "forgotten men and women," that protectionism harmed them. What was emerging in both countries was a powerful alliance of protected industries, the workers who worked in those industries, politicians who saw protectionism as a way of advancing their careers in the emerging democracies of late 19th century Europe and the U.S. , and nationionalist intellectuals who had fully accepted the interventionist views of Alexander Hamilton and Friedrich List. The free traders in the mid-1880s were not able to build their own coalition of support to act as a counterveiling force to the protectionists. We should not be surprised at this as we are seeing the same forces at work today.
[77.] Lectures on the History of Protection in the United States. Delivered before the International Free-trade Alliance. Reprinted from “The New Century.” Published for the International Free-trade Alliance by G. P. Putnam’s Sons, New York, 64 pp. Contents: The National Idea and the American System, Broad Principles Underlying the Tariff Controversy, The Origin of Protection in this Country, The Establishment of Protection in this Country, Vacillation of the Protective Policy in this Country. He would write another history of free trade and protection in about 1889 which was never published in English: Free Trade (Unpublished manuscript.) I. Definitions of Protection and Protectionism. II. The Medieval Doctrine of Commerce. III. The Sixteenth Century. IV. The Dynastic States. V. Mercantilism and the Colonial System. VI. The New Doctrine. VII. Smithianismus. VIII. Protection in the United States. IX. Nineteenth-century Protectionism. X. The Present Situation. About 64 typewritten pages. (Sumner Estate.) This was published in French as “Liberté des échanges” (Free Trade) in Nouveau Dictionnaire d’Économie Politique, publié sur la direction de M. Léon Say et de M. Joseph Chailley (Paris: Librairie de Guillaumin et Cie, 1891–92), vol. 2, pp. 138–66.
[78.] Sumner, The Forgotten Man and Other Essays ,</titles/2396#Sumner_1225_724>.
[79.] Sumner, The Forgotten Man and Other Essays, </titles/2396#lf1225_head_002>.
[80.] Preface to “Protectionism” in The Forgotten Man and Other Essays, </titles/2396#Sumner_1225_12>.
[81.] Rare Book Division, The Buttolph Collection of Menus, The New York Public Library. “ANNUAL DINNER [held by] NEW YORK FREE TRADE CLUB [at] DELMONICO NY” The New York Public Library Digital Collections. 1885. <>.
[82.] Opening paragraph of Address of William G. Sumner, Professor of Political and Social Science in Yale University, At Dinner of the Committee on Tariff Reform of the Reform Club in the City of New York. June 2nd, 1906. (Published by the Reform Club Committee on Tariff Reform, 42 Broadway, New York, N. Y., 1906).
[83.] Gustave de Molinari (1819-1912) wrote three collections of "conversations" between intellectual adversaries to defend his views about laissez-faire policies. The first one, Les Soirées de la rue Saint-Lazare; entretiens sur les lois économiques et défense de la propriété (Evenings on Saint Lazarus Street: Conversations about Economic Laws and a Defence of Private Property), appeared in 1849 and was a series of "conversations" between a Socialist, a Conservative, and an Economist in which he provided a concise survey of the classical liberal position (perhaps the first of its type) and explored how all public goods might be privatised, including the "production of security" (i.e police and national defence). Free trade was just one of many topics he covered in this book. His second collection of "conversations" appeared in 1855 and was devoted completely to free trade and protection: Conservations familières sur le commerce des grains (Familiar Conversations about the Grain Trade). It was a popular defense of free trade at a time when riots were occurring in Brusselles against food shortages and rising food prices. The conversations were between "un émeutier" (a rioter), "un prohibitionniste" (a trade prohibitionist or protectionist), and "un économiste" (an economist). After a hiatus of 30 years Molinari returned to the topic of free trade when he reissued his 1855 book, which is now entitled "Part One: A Time of Shortage", with an additional part added to it called "Part Two. Thirty Years Later: A Time of Plenty". The conversations are no longer described as "familiar" and take place between an Economist, a Protectionist, and a Collectivist: Conversations sur le commerce des grains et la protection de l'agriculture (Conversations about the grain trade and the protection of agriculture) (1886). In this later book the protectionists were complaining about the opposite of what had happened in 1855. The problem now was food surpluses, especially food coming from overseas (like the U.S. and Russia) and competing with French farmers. Molinari threw up his hands in despair, saying the protectionists wanted to have it both ways - protection when there are shortages and protection when there are surpluses.