Trump and the Gilded Age: Tariffs Then and Now – Rich vs. Many

trump’s Tariff Vision: Echoes of the Gilded Age and William McKinley

President Donald trump’s vision for revitalizing the U.S. economy hinges substantially on tariffs, drawing parallels to the late 19th-century Gilded Age and the policies of President William McKinley. Tho, experts caution against idealizing this era, pointing to its complexities and potential pitfalls. This analysis examines the past context, potential economic impacts, and differences between McKinley’s and Trump’s approaches to trade policy.

The Gilded Age: Wealth and Inequality

Trump has often cited the period from 1870 to 1913 as a golden age for the U.S., characterized by high tariffs and economic prosperity. “We were at our richest from 1870 to 1913. That’s when we were a tariff country. And then they went to an income tax concept,” Trump stated.This era, however, was also marked by stark inequality and social unrest [Citation: Piketty, T. (2014).*Capital in the Twenty-First Century*. Harvard University Press.]. The term “Gilded Age” itself, derived from Mark Twain’s satirical novel, highlights the superficial prosperity masking deep-seated corruption and poverty.

• Wealth Disparity: While industrial giants like Rockefeller and Morgan amassed fortunes,many Americans struggled with poverty and precarious working conditions.
• government Corruption: The era was rife with government and buisness corruption, as powerful industrialists exerted significant influence over politicians.

Trump’s Tariff Policies: A Modern Approach?

Trump’s fondness for tariffs is well-documented.”I am a tariff Man,” he declared in 2018. He views tariffs as “a very powerful weapon that politicians haven’t used because they were either dishonest, stupid or paid off in some other form.” His administration has already imposed tariffs on imports from China, aluminum, and steel, with plans to increase levies on other goods from the European Union and other countries.

Though, Dartmouth College economics professor douglas Irwin cautions against attributing the late 19th-century economic growth solely to tariffs. “We did grow rapidly in the late 19th century,” he said. “But it’s a stretch to attribute it to tariffs.”

The Panic of 1893: A Cautionary Tale

The economic landscape of the 1890s presents a mixed picture. While tariffs were in place, the decade also saw significant economic challenges. Federal budget surpluses led to deflation, and high tariffs increased the cost of living. These factors, coupled with a financial crisis in Great Britain, triggered the Panic of 1893.

• Railroad Bankruptcies: The Panic led to widespread railroad bankruptcies and a stock market crash.
• High Unemployment: Unemployment soared to 25% nationally.

Irwin notes, “It’s hard to say it was a political success. It’s hard to say it was an economic success… As we spent a lot of the 1890s with double digit unemployment.”

McKinley’s Trade philosophy: More Nuanced Than Trump’s?

While Trump admires McKinley, the historical record reveals significant differences in their approaches to trade. McKinley, initially a proponent of protectionism, later recognized the importance of reciprocity and foreign markets. Shortly after winning reelection in 1900, McKinley began rethinking tariffs, as a stronger and still-growing U.S. manufacturing base made him more appreciative of foreign markets.

Merry said that McKinley gave a speech in Buffalo,New York,outlining “this concept of reciprocity,which was: I’m prepared to bring down tariffs. Even me. Even William McKinley.”

in a speech on Sept. 5,1901,McKinley stated,”A policy of goodwill and friendly trade relations will prevent reprisals. Reciprocity treaties are in harmony with the spirit of the times. Measures of retaliation are not.”

Trump’s current trade policies, emphasizing “reciprocal” tariffs, echo McKinley’s sentiment but lack the context of a move toward lowering trade barriers. McKinley’s assassination in 1901 prevented him from fully implementing his vision of reciprocal trade agreements.

Expansionism: Similarities and Differences

Trump’s recent rhetoric about U.S. expansionism, including suggestions about seizing the Panama Canal and buying Greenland, find some echoes in McKinley’s presidency, during which the U.S.acquired the Philippines, Guam, and puerto Rico. However, McKinley’s approach was tempered by skepticism and a focus on strategic interests. “While we are conducting war, and until its conclusion, we must keep all we get,” McKinley wrote. “When the war is over, we must keep what we want.”

Conclusion: Lessons from the Gilded Age

Trump’s fascination with the Gilded Age and McKinley’s trade policies offers a historical lens through which to examine current economic strategies. While tariffs can play a role in stimulating domestic industries [Citation: Bown, C. P., & Irwin, D. A. (2017). *Trump’s Trade War*. Peterson Institute for International Economics.], policymakers must consider the potential for unintended consequences, such as increased costs for consumers and retaliatory measures from trading partners. The Gilded Age, with its stark inequalities and economic volatility, serves as a reminder that economic prosperity must be broadly shared to be lasting. As tariffs take effect, it will be crucial to monitor their impact on various sectors and adjust policies accordingly to ensure a balanced and inclusive economic future. Stay informed, engage in constructive dialog, and advocate for policies that promote sustainable growth and equitable prosperity for all Americans.

To what extent did the social and economic inequalities of the Gilded Age,including the impact of tariffs,contribute to the instability and ultimately the decline of the period?

Tariffs and Trade: A Gilded Age Echo? An Interview with Trade Historian,Dr. Eleanor vance

President Trump’s focus on tariffs as a driver of economic revitalization harkens back to the Gilded Age, especially the policies of President William mckinley. But what lessons can we truly draw from this period? Archyde spoke with Dr. Eleanor Vance, a renowned trade historian and professor at the American Economic History Institute, to delve into the complexities.

The Allure and Peril of the Gilded Age

Archyde: Dr. Vance, thanks for joining us. President Trump has often pointed to the late 19th century, the Gilded Age, as a period of prosperity fueled by high tariffs. Is this a fair assessment?

Dr. Vance: it’s a simplified narrative. The Gilded Age undoubtedly saw meaningful industrial growth, but attributing it solely to tariffs overlooks the broader context. We had vast natural resources, a rapidly expanding population, and technological innovation.While tariffs provided some protection for nascent industries, we also saw immense wealth disparity and social unrest, issues that need to be acknowledged.

Trump’s Tariffs: A Modern McKinley?

Archyde: President Trump has declared himself “a tariff man.” How do his tariff policies compare to those of William McKinley?

Dr. Vance: There are similarities, certainly. Both presidents saw tariffs as a tool to protect domestic industries. Though, McKinley, towards the end of his presidency, began to advocate for reciprocal trade agreements, recognizing the importance of foreign markets. Trump’s approach, while emphasizing reciprocity, has focused more on imposing tariffs without a clear path towards broader trade liberalization. McKinley’s assassination prevented a full realization of his reciprocal trade vision.

The Panic of 1893: A Warning Sign?

Archyde: The 1890s,during McKinley’s era,also saw the Panic of 1893,a significant economic downturn. Could aggressive tariff policies have contributed?

Dr. Vance: It’s difficult to pinpoint a single cause, but tariffs certainly played a role. They raised the cost of living and, coupled with other factors like deflation and a financial crisis in Great Britain, exacerbated the economic difficulties. We saw widespread railroad bankruptcies and high unemployment. It serves as a reminder that tariffs can have unintended consequences.

Expansionism: Than and Now

Archyde: Both McKinley and President Trump have shown an interest in U.S. expansionism, though in different ways. What parallels and differences do you see?

Dr. Vance: McKinley’s expansionism was largely focused on acquiring territories like the Philippines and Puerto Rico, driven by strategic interests and a desire for new markets. Trump’s rhetoric, including suggestions about Greenland and the Panama Canal, feels more impulsive and less strategically grounded. Both reflect a desire for U.S. dominance, but McKinley’s approach, while still controversial, had a more defined geopolitical context.

Lessons for today’s Trade Landscape

Archyde: What key lesson from the Gilded Age should policymakers keep in mind when considering tariffs today?

Dr. Vance: That economic prosperity must be broadly shared to be lasting. The Gilded Age was a period of immense wealth creation, but it was also a period of stark inequality. Tariffs can potentially benefit certain industries, but they can also increase costs for consumers and trigger retaliatory measures from trading partners. A balanced and inclusive approach, one that considers the impact on all sectors of society, is crucial.

A Thought-Provoking Question

Archyde: Dr.Vance, is there a question about tariffs and trade that you wish the public would consider more deeply?

Dr. Vance: I think it’s significant to ask: Who *really* benefits from tariffs in the long run? are we protecting vulnerable industries and workers, or are we simply creating opportunities for rent-seeking and further concentrating wealth? It’s a question with no easy answers, and the implications are profound

Archyde: Dr. Vance, thank you for your insightful analysis.

Dr. Vance: My pleasure.

We invite our readers to share their thoughts on this complex issue in the comments below.What do you believe is the right balance between protecting domestic industries and promoting free trade?