EDITORnThomas FlemingnMANAGING EDITORnKatherine DaltonnCONTRIBUTING EDITORSnJohn W. Aldridge, Harold O.J.nBrown, Samuel Francis, GeorgenGarrett, Russell Kirk, E. ChristiannKopff, Clyde WilsonnCORRESPONDING EDITORSnBryce Christensen, Odie Faulk, ]anenGreer, John Shelton Reed, JosephnSchwartz, Gary VasilashnEDITORIAL SECRETARYnLeann DobbsnEDITORIAL ASSISTANTnMatthew KaufmannPUBLISHERnRichard A. VaughannART DIRECTORnAnna Mycek-WodeckinPRODUCTION MANAGERnGuy ReffettnADVERTISING REPRESENTATIVEnGeorgia L. WolfnCOMPOSITION MANAGERnAnita FedoranCIRCULATION DIRECTORnCarol BennettnA Publication ofnThe Rockford Institute:nAllan C. Carlson,nPresidentnEditorial and Advertising Offices: 9?4 NorthnMain Street, Rockford, IL 61103.nEditorial Phone: (815) 964-5054.nAdvertising Phone: (815) 964-5811.nSubscription Department: P.O. Box 800, MountnMorris, IL 61054. Call 1-800-435-0715, innIllinois 1-800-892-0753.nU.S.A. Newsstand Distribution by EasternnNews Distributors, Inc., 1130 Cleveland Road,nSandusky, OH 44870.nCopyright © 1989 by The Rockford Institute.nAll rights reserved.nCHRONICLES (ISSN 0887-5731) is publishednmonthly for $21 per year by The RockfordnInstitute, 934 North Main Street, Rockford, ILn61103-7061.nSecond-class postage paid at Rockford, IL andnadditional mailing offices.nPOSTMASTER: Send address changes tonCHRONICLES, P.O. Box 800, Mount Morris,nIL 61054.nThe views expressed in Chronicles are thenauthors’ alone and do not necessarily reflect thenviews of The Rockford Institute or of itsndirectors. Unsolicited manuscripts cannot benreturned unless accompanied by a self-addressednstamped envelope.nChroniclesnk M I G W I N E OF A M t n C A N CUITUDEn4/CHRONICLESnVol. B, No. 6|une 1989nOnn’Globalization’nPOLEMICS & EXCHANGESnIn his Cultural Revolutions piece in thenMarch issue, William Hawkins claimsnthat the assertion the Smoot-HawleynTariff caused the Great Depression hasn”no grounding in fact or logic.” Henattributes this assertion solely to a campaignnspeech made by Franklin D.nRoosevelt. Mr. Hawkins is mistaken.nIn his book The Way the WorldnWorfe,, Jude Wanniski presents an elaboratenand detailed analysis of the relationshipnbetween the two. He showsnthat the ups and downs of the stocknmarket tracked the ups and downs ofnthe Smoot-Hawley Tariff as it progressednthrough Congress.nIn his book America’s Great Depression,nMurray Rothbard covers thensame ground. He devotes less space tonSmoot-Hawley than does Wanniski,nbut discusses a number of other protectionistnmeasures taken about the samentime.nMr. Hawkins may disagree withnWanniski, Rothbard, and the manynother economists whose analyses of thenGreat Depression led them to thensame conclusions. He may disputenboth their facts and their logic. However,nhe simply cannot claim that therenare neither facts nor logic to supportnthe assertion that protectionisrhnbrought on the Great Depression.nHawkins is quite correct is his assessmentnof the damage done by HarrynDexter White, and is largely correct inncondemning “globalization.” Nevertheless,nthe case against protectionismnand for free trade is genuinely a “conservative”none. It goes straight back tonAdam Smith, surely one of the greatestn”conservatives” of all time.n—]oseph P. MartinonSidney, OHnMr. HawkinsnReplies:nJude Wanniski is a journalist, not an .neconomist, and nothing better demonstratesnthe difference than his treatmentnof Smoot-Hawley. Wanniski’s polemicnis far too shallow to support its grandiosennntitle. Journalists feel the need to explainneach day’s ups and downs in the stocknmarket with reference to that day’snnews. We see this often, but it meansnvery little. It’s the trend, not the fluctuations,nthat counts, and the trend dependsnon underlying economic conditions.nAs Milton Friedman and AnnanSchwartz state in A Monetary Historynof the United States: “The stock marketncrash coincided with a stepping upnof the rate of economic decline. Duringnthe two months from the cyclicalnpeak in August 1929 to the crash,nproduction, wholesale prices andnpersonal income fell at annual rates ofn20 percent, l-Vi percent, and 5 percentnrespectively. In the next twelvenmonths all three series fell at appreciablynhigher rates. … All told, by Octobern1930, production had fallen 26npercent, prices, 14 percent, andnpersonal income, 16 percent.”nThese developments had far moreneffect than could any debate over antariff—especially a tariff whose changesnin rates had little practical effect.nFriedman-Schwartz blame the collapsenof the banking system for converting andownturn into a depression.nWhen Rothbard mentions Smoot-nHawley, he says “it was at a precariousntime of depression that the HoovernAdministration chose to hobble internationalntrade.” Thus he confirms thatnthe Depression was already underwaynbefore it was enacted. Rothbard blamesnthe inflation of the 1920’s for bringingnon the Depression.nSmoot-Hawley did not give the signalnfor protectionism to proliferatenaround the world. The trend towardsnprotection, particularly in agriculture,noccurred right after World War I. Thenwar was the death knell of laissez-faire.nIt demonstrated both the importancenof national economic strength and thenvulnerability of nations dependent onnstrategic imports such as food. Smoot-nHawley was a response to restrictednoverseas markets and foreign dumping.nIt was part of a trade war that had beennin progress for a decade. The continuednadvance of technology has increasednthe importance of such strategicnfactors in formulating realistic tradenand industrial policies.n