The Tariff Response to World Market Integration in the Periphery Before the Modern Era

What determines tariff policy? It can’t be conventional economics, since every mainstreameconomist agrees that free trade is a good thing (Smith 1776; Mill 1909; Bhagwati 2000). Yet, the politicsof free trade have been surrounded by controversy ever since Alexander Hamilton tried shoving hisprotectionist policies down the throats of a new United States congress after 1789, and since Robert Peelruined his political career by shoving free trade down the throats of the British Parliament in 1846.Political leaders have never been solely, or even largely, interested in maximizing national income, letalone maximizing world income. Rather, their main goal has always been “to get a larger slice [of the pie]for their supporters” (McGillivray et al. 2001: p. 2). Protection and free trade have always been for sale inthe political market place (Grossman and Helpman 1994), but having said so doesn’t make the question—what determines tariff policy?—any easier to answer. After all, nations will adopt different tariff policiesto the extent that there are different economic interests lobbying for those policies, to the extent that theeconomic environment impacting on those interests is different, and to the extent that different politicalinstitutions dictate which economic interests have the most votes.