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In a 1944 speech focused on his vision for the postwar rebuilding of British society, Winston Churchill famously remarked, “The longer you can look back, the farther you can look forward.” Churchill’s insight about knowing history to understand what the future will bring provides a lens that helps us understand why the recent turn of the United States toward protectionism and the curtailment of immigration is unlikely to be a passing fad.
The implication for policy is clear: any argument made in favor of internationalized supply chains or the immigration of high-skilled workers must make the case that those policies will reinforce, rather than undermine, a singular, powerful force that has been in operation since the colonial period: an ideological preference toward a society of self-reliant, moral and political equals who can shape their own destinies.
Most of British North America’s thirteen colonies—New York, New Jersey, Pennsylvania, Delaware, Maryland, North Carolina and South Carolina—were founded as proprietorships: grants made by English Kings Charles II and James II to their political allies, creditors, and family members. A Lord Proprietor was a prince: he owned all the land and had the right and power to establish courts, appoint judges and magistrates, pardon offenses, impose martial law, call up the men of fighting age to wage war, levy duties, and collect tolls. The British plan was to recreate the manorial system long after it had faded in Britain.
Britain’s medieval vision for America foundered quickly. What emerged instead in the colonies north of Chesapeake Bay was a society of fiercely independent and highly literate farmers, artisans, and merchants who demanded citizen assemblies and embraced the radical ideology of republicanism.
Their alternative vision was a society of property-owning equals with the ability to improve their economic circumstances through the application of talent and hard work.
The ideology that fueled the American Revolution and underpinned the political and economic institutions of the newly independent United States was, in short, the maintenance of what we would now call “a prosperous middle-class society.”
Reactions
Technological or demographic changes that threatened this prosperous society of equals induced a sharp political response. The earliest challenge was the spread of slavery westward, the result of the invention, by Eli Whitney in 1794, of the cotton gin, which made it possible to clean the short-staple cottons that could grow in the more variable climates and soils of America’s inland regions.
Just to the extent that slave states entered the United States, a “free soil movement,” with a platform of “Free Soil, Free Speech, Free Labor, and Free Men,” grew. The Free Soil Party merged into the newly formed Republican Party in 1854, and the Republicans adopted Free Soil’s anti-slavery position. The election of Abraham Lincoln in 1860—the first Republican to win the presidency—set in motion the events that led to the Civil War, the abolition of slavery, and the defeat of a vision for America that was inconsistent with a society of equals.
It was not long before another technological change—the fall in transport costs induced by improvements in passenger steamships—created a new challenge to America’s society of equals. Immigrants from Eastern Europe, Southern Europe, China, and Japan, who would work for wages well below those of native-born workers, began arriving in large numbers.
The political response to technologically induced demographic change was sharp.
In 1875, Congress passed the Page Act, which effectively banned the immigration of Chinese women to the United States. It was followed in 1882 by the Chinese Exclusion Act, which prohibited the immigration of Chinese laborers and denied Chinese already in the United States the right to become naturalized citizens. In 1905, the Japanese and Korean Exclusion League was established in California to expand the Chinese Exclusion Act to immigrants from those countries. The result was the Gentlemen’s Agreement of 1907, in which the Japanese government agreed not to issue passports for Japanese citizens wishing to work in the United States.
Restrictions on Southern and Eastern European immigration soon followed. A 1917 law required immigrants to pass a literacy test. In 1921 an Emergency Quota Act limited the number of immigrants from any country outside the Western Hemisphere to 3 percent of the foreign-born persons of that nationality living in the United States in 1910. It therefore sharply curtailed what had been virtually unlimited European immigration and at the same time favored Northern and Western Europeans, who were numerically dominant in the United States in the 1910 census, over poorer immigrants from Southern and Eastern Europe.
It was followed by the even more restrictive Immigration Act of 1924, which prevented immigration from Asia, capped total immigration at 165,000, and set quotas for Europeans at 2 percent of their US population in the 1890 census (when Eastern and Southern Europeans were an even smaller minority than in the 1910 census, thereby further curtailing their numbers).
America’s restrictive immigration policies endured for decades. The Chinese Exclusion Act remained on the books until 1943, when the United States and China were allied against Japan during World War II. The quotas of the 1924 Immigration Act remained until the Immigration and Nationality Act of 1965, which established a preference system based on attracting highly skilled workers and reunifying families.
Tariffs surge
Protectionism—tariffs on imported goods—went hand in hand with restrictions on immigration. The United States had relied on tariffs to finance the federal government since the 1790s. Northern manufacturing interests and their workers had long favored higher tariffs, while Southern cotton producers had opposed them.
The Civil War changed the balance of political forces. Battles over tariff rates ebbed and flowed, but in the end, protectionism won out. The McKinley Tariff of 1890, which raised the average tariff to 50 percent, was followed by the Wilson–Gorman Tariff of 1894, which lowered rates—to a still-restrictive 42 percent—which was followed by the Dingley Tariff of 1897, which raised average rates back to 47 percent. The Payne-Aldrich Tariff of 1909 was initially conceived to reduce tariffs, but after much legislative wrangling, all it did was reduce tariffs on agricultural products, while retaining high tariffs on manufactured imports, thereby infuriating farmers while benefiting urban industrial workers.
Tariff policy became a back-burner issue with the onset of World War I, which dramatically reduced international trade. When trade once again became a politically salient issue during the Great Depression, the result was the highly restrictive Smoot-Hawley Tariff of 1930.
The United States did not embrace low tariffs until 1947, when as part of building a post–World War II economic and security commons, it promoted the General Agreement on Tariffs and Trade, whose goal was to reduce tariff rates around the world.
Beyond “Trumpism”
If you stand back and look at the forest and not the trees, the picture that emerges is a period of immigration restrictions and high tariffs that endured for somewhere between six and eight decades. Moreover, the political engine that drove those policies is a singular, powerful force that has been in operation since the colonial period: an ideological preference toward a society of self-reliant equals with the power to shape their own destinies.
It is little wonder that the rise of China as an export powerhouse and the pressure on the distribution of income induced by skill-biased technological change has induced a sharp political response. Its current political expression is “America First” and “Trumpism.”
If history is any guide, those political currents are not fleeting and personality driven. Rather, they are reflections of a political culture—a set of deeply held preferences and beliefs—that has endured for three centuries.
Now advocates of internationalized supply chains and high-skilled immigration must show, with reason and systematic evidence, that these policies can and do reinforce, rather than undermine, a society of prosperous, self-reliant equals.
Stephen Haber is the Park L. Loughlin Senior Fellow at the Hoover Institution and director of the Hoover Program on the Foundations for Economic Prosperity. He is the A. A. and Jeanne Welch Milligan Professor in the School of Humanities and Sciences at Stanford University, and senior fellow at the Stanford Institute for Economic Policy Research. He is also a professor of political science, professor of history, and professor of economics (by courtesy).