Planet Money Summer School History 5: 250 years of trade history in three chapters
Aug 7, 2024
Delve into 250 years of trade history, exploring everything from Adam Smith's revolutionary ideas in 'The Wealth of Nations' to the complexities of modern trade debates. Discover how trade shaped the early U.S. economy and the rising tensions between free trade and protectionism. Hear about Cordell Hull's advocacy for free trade as a means for global peace and the impact of tariffs on international commerce. Unpack the evolving views on globalization and the challenges faced by communities today, alongside the transformative effects of the World Trade Organization.
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Chapters
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Episode notes
Wealth Is Living Standards Not Gold
- Adam Smith argued national wealth depends on citizens' living standards, not gold reserves.
- Lowering tariffs raises consumption and real wages, increasing a nation's prosperity.
Concentrated Benefits Beat Diffuse Costs Politically
- Tariffs create concentrated benefits for a few producers and diffuse costs for many consumers.
- Politically, concentrated winners typically out-organize and win against diffuse losers.
Cordell Hull's Hillbilly-To-Statesman Story
- Cordell Hull grew up poor in Tennessee and later championed free trade as a path to peace.
- He argued economic interdependence would reduce incentives for war and pushed tariff-reduction policies in the 1930s–40s.