**Plain English with Derek Thompson: Episode Summary
Episode: Plain History: The Smoot-Hawley Tariff and the Great Depression
Release Date: April 11, 2025

In this compelling episode of Plain English, host Derek Thompson delves into one of the most infamous pieces of American legislation—the Smoot-Hawley Tariff Act of 1930—and its profound impact on the Great Depression. Joined by Douglas Irwin, an esteemed economist and historian from Dartmouth University, Thompson explores the economic motivations, political maneuvers, and lasting legacy of this pivotal law.

1. Introduction to Infamous American Laws

Derek Thompson sets the stage by contextualizing the Smoot-Hawley Tariff among other notorious American laws, highlighting its unique place in history due to its unintended consequences.

“So what about the American law that most infamously backfired?” (00:44)

2. The Economic Landscape of the 1920s

The 1920s, often referred to as the "Roaring Twenties," were a period of significant economic and technological growth in the United States. However, beneath the surface lay deep-seated anxieties and disparities, particularly in the agricultural sector.

• Technological Advancements:
  “America was rich even compared to other rich countries. According to the historian Bill Bryson, every year in the 1920s, America added more new phones than Britain possessed.” (02:29)

• Agricultural Decline:
  Despite economic prosperity, agriculture was declining as a share of employment. Farmers faced plummeting prices and mounting debts following World War I.

3. Herbert Hoover: From Secretary of Commerce to President

Herbert Hoover, renowned for his efficiency and managerial prowess, transitioned from a celebrated Secretary of Commerce to the U.S. President in 1929. His extensive experience in managing large-scale relief efforts during and after World War I positioned him as a capable leader, albeit not the most charismatic.

“He was one of the best secretaries of commerce and the most influential.” (09:59)

4. The Genesis of the Smoot-Hawley Tariff

As the agricultural sector struggled, the Republican Party, led by Representative Willis C. Hawley of Oregon, sought to aid farmers through protectionist measures. The initial proposal aimed to create an import tax to shield American farmers from foreign competition.

“This tiny measure to increase tariffs on farm goods.” (14:01)

5. Transformation from Narrow Bill to Comprehensive Tariff

Originally a targeted initiative to support agriculture, the Smoot-Hawley Tariff expanded dramatically through congressional negotiations. This expansion was driven by the need to garner broader political support, leading to a tariff encompassing approximately 20,000 different goods.

• Examples of Tariff Expansion:
  “...goldfish producers... clothespins.” (17:18)

• Log Rolling and Vote Trading:
  The process involved extensive vote trading, where representatives secured tariff increases on specific goods relevant to their constituencies in exchange for support on the broader bill.

“It's like a Christmas tree that collects more ornaments.” (15:26)

6. Absence of Consumer and Exporter Opposition

A striking aspect of the Smoot-Hawley debate was the lack of opposition from consumer groups or exporters. Unlike today, where consumer advocacy and export interests play significant roles in trade discussions, the 1920s Congress primarily echoed protectionist sentiments without substantial pushback.

“There was not a representative of the consumer interest in Congress.” (19:42)

7. Reed Smoot: The Man Behind the Tariff’s Name

Senator Reed Smoot of Utah, a devout Mormon known as the "sugar senator," was instrumental in shaping the tariff. His interests extended beyond economic protectionism to cultural concerns, such as banning obscene materials, reflecting the intertwined nature of policy and personal values.

“Smoot, Smite... they are smuggling smut from [certain locations].” (23:48)

8. The Stock Market Crash’s Influence on the Tariff Debate

The October 1929 stock market crash heightened the urgency of economic measures. As the Depression began to take hold, the Smoot-Hawley Tariff gained traction as a perceived solution, leading to its swift passage through the House but entangling the Senate in protracted debates over individual tariff lines.

“It took up almost a year of the Senate's time.” (26:21)

9. Herbert Hoover’s Role in Enacting the Tariff

Despite signatories from the economic community opposing the tariff, President Hoover signed the Smoot-Hawley Act. His decision was influenced by party loyalty and the political landscape, prioritizing legislative directives over economic advisement.

“He said, it's not a perfect piece of legislation... This is what we're going to go with.” (28:13)

10. Immediate International and Domestic Consequences

The enactment of the tariff spurred immediate negative reactions internationally. European nations, burdened with debt repayments to the U.S., retaliated by imposing their own tariffs, leading to a detrimental trade war that exacerbated the global economic downturn.

• European Retaliation:
  “They're smuggling smut from [certain locations].” (31:46)

• Impact on Canada:
  Canadian exports to the U.S. dwindled, influencing political shifts within Canada and fostering a trade bloc excluding the United States.

“They found their exports very much adversely affected by these tariffs.” (33:52)

11. Evaluating the Tariff’s Role in the Great Depression

Douglas Irwin adopts a balanced perspective on the Smoot-Hawley Tariff’s impact. While it did not cause the Great Depression, it significantly worsened the economic situation by triggering retaliatory tariffs and stifling international trade.

“It's somewhere in the middle. It certainly didn't cause the Great Depression, but it was a harmful measure.” (34:34)

12. The Tariff’s Ineffectiveness in Helping Farmers

Contrary to its intended purpose, the tariff failed to alleviate the struggles of American farmers. By targeting a narrow range of agricultural products and inviting international retaliation, it inadvertently harmed the very sector it aimed to protect.

“It was fundamentally flawed... it wasn't really going to help agriculture.” (35:38)

13. Shifting the Trade Paradigm: From Congress to the Presidency

The fiasco of the Smoot-Hawley Tariff led to a significant shift in U.S. trade policy. Recognizing the inefficacy of congressional deliberations on tariffs, future trade negotiations were delegated to the executive branch, culminating in the Reciprocal Trade Agreements Act of 1934 under President Franklin D. Roosevelt.

“We authorize the president to negotiate with other countries to reduce our tariff.” (42:37)

14. Long-Term Legacy and the Decline of Protectionism

The detrimental effects of the Smoot-Hawley Tariff ingrained a lasting aversion to protectionism in American politics. This legacy influenced future leaders, including Ronald Reagan, who consistently favored free trade policies, wary of repeating the mistakes of the 1930s.

“We don't want to go down the road of protectionism because we have to learn the lessons of the 1930s.” (44:17)

15. Modern Parallels and Lessons Learned

Thompson and Irwin draw parallels between the 1930s protectionist measures and contemporary debates over tariffs and trade policy. The episode underscores the complexities and unintended consequences of using tariffs as economic tools, emphasizing the need for nuanced and forward-thinking approaches to trade.

“Tariffs are a very blunt instrument... they really can't help reverse the declining fortunes of a particular sector of the economy in the long run.” (46:51)

Conclusion

In Plain English's exploration of the Smoot-Hawley Tariff, Derek Thompson and Douglas Irwin provide a nuanced understanding of how well-intentioned policies can spiral into economic disasters. The episode serves as a cautionary tale on the perils of protectionism and the importance of informed economic policymaking.

“Douglas Irwin, thank you very much.” (47:06)

Key Takeaways:

• Protectionism’s Double-Edged Sword:
  Tariffs intended to protect specific industries can lead to widespread economic repercussions, including retaliatory measures from trading partners.

• Policy and Political Dynamics:
  Effective policymaking requires balancing the interests of various economic sectors while anticipating broader impacts.

• Historical Lessons for Modern Policy:
  The legacy of Smoot-Hawley informs contemporary trade debates, highlighting the need for informed and strategic approaches to economic challenges.

Notable Quotes:

• “It's like a Christmas tree that collects more ornaments.” – Derek Thompson (15:26)
  Illustrating how the tariff bill grew more complex and expansive through legislative debates.

• “Tariffs are a very blunt instrument... they really can't help reverse the declining fortunes of a particular sector of the economy in the long run.” – Douglas Irwin (46:51)
  Emphasizing the inefficacy of tariffs in addressing deep-seated economic issues.

This episode offers a thorough examination of the Smoot-Hawley Tariff, its context within the 1920s economy, the political maneuvers that shaped it, and its enduring legacy on American trade policy. Whether you're a history enthusiast or seeking to understand the complexities of economic legislation, Plain English provides valuable insights into one of America's most consequential legislative acts.