Published by EH.NET (July 2002)
Fiona McGillivray, Iain McLean, Robert Pahre and Cheryl Schonhardt-Bailey,
International Trade and Political Institutions: Instituting Trade in the
Long Nineteenth Century. Cheltenham, UK and Northampton, MA: Edward Elgar,
2002. x + 242 pp. $80 (hardback), ISBN: 1-84064-690-X.
Reviewed for EH.NET by John V.C. Nye, Department of Economics, Washington
University in St. Louis.
This stimulating and well-written volume is based on the papers originally
presented at a mini-conference held at Washington University in St. Louis.
(Which, it should be noted, I now regret having missed.) The four lengthy
essays plus a substantial introductory essay and conclusion share the common
theme of analyzing the link between political institutions and the history of
European — especially British — trade policy in the century between the
Napoleonic wars and the coming of the First World War. This unity of theme
makes for something more than a hastily assembled collection of conference
essays. Furthermore, some of the methodological issues that are addressed
should prove of additional interest for economic historians trying to balance
the demands of social scientific reasoning and historical detail.
The nineteenth century is, of course, of central importance for historians of
international commerce as the latter half of the century provided the first and
arguably the only true period of relatively free trade among the major European
powers. Furthermore, the special role of Britain as apologist for and most
prominent nation in the drive towards freer trade commands the attention of
theorists in international relations as well as the political economy of trade
The opening essay — in its own way perhaps the most impressive piece in the
book — points to the tensions that arise between those who focus on the
narrowly political details of a particular historical event or political
transition and the desire to construct more generalizable theories of political
economy and trade relations. Furthermore, even among the theorizers, there is a
real clash — almost a culture clash — between those who favor international
level, states-as-single-actors explanations of policy common to the work in
“Realism” and the theory of “Hegemonic Stability” and the more economically
oriented explanations (overlapping with work in public choice theory) that
focus on the role of domestic interests in competition with one another.
The former approach seems to be the more traditional “political” approach
focusing on policy strategy and power relations, while the latter — often
called Endogenous Tariff Theory (ETT) — is more economistic, drawing on the
metaphor of politics as interest group competition derived from ideas of
economists such as Olson, Buchanan and Tullock, or North. Indeed, the latter
approach is especially congenial to economic historians who have played no
small role in advancing the state of knowledge in this area.
The latter approach, while often faulted for its tendency to oversimplify or
ignore important historical detail, can count as its achievement the production
of a body of theory and empirical evidence that is unmatched in the literature.
As is noted in the introduction, “It is unlikely that any other approach could
boast a comparable number of logically interrelated testable propositions” (p.
9) with strong empirical support. In contrast, proponents of the work in the
various areas of Realism “disagree even about the main assumptions and central
claims of the theory” (p. 9) which to this reviewer seems to be an incredibly
damning indictment of that body of research.
But a greater problem occurs from the desire to reconcile work that focuses on
material interests — common to ETT and to other “economic” approaches —
versus studies that concentrate on the role of ideas or on political ideology.
This contradiction is not resolved and if anything is deepened by the examples
given in this book.
Pahre’s long essay on tariff treaty regimes in the nineteenth century is the
most general work in the book and is itself a fine demonstration of the
benefits to be derived from even a simplified special interest model. Focusing
on competition between importers and exporters in a reduced form political
model in which the ruler or state throws his support to one faction or the
other, Pahre gives us an analysis of the movement towards trade liberalization
in the nineteenth century which does not suffer from the tendency of many
writers to over-emphasize the role of Britain. As this reviewer has argued in
other work, France and Germany should be viewed as the major figures in the
spread and eventual retreat of liberal trade policies in the century. British
tariff reform early in the century was neither as dramatic as has been
presented to us nor did it engender a response in the major trading partners.
Only the 1860 Anglo-French Treaty of Commerce and other events having little to
do with unilateral moves on the part of the British spurred the spread of freer
trade through bilateral treaties with third parties contrary to the arguments
of purist free traders.
Any such model will be bound to have multiple caveats ranging from the reduced
form concerns to the non-incorporation of economic conditions to the relatively
simplistic political model employed. Even at the level of his analysis Pahre
has some difficulties with the empirical tests finding, for example, that
openness measures work better than average tariff levels for his hypotheses.
But nothing in his model really gets at openness per se, and openness, unlike
tariff levels, is as much a function of the underlying economic fundamentals of
the countries as of any political decisions that could have been made by the
tariff setting authorities. Nonetheless, the effort is still impressive, and
there is much in the overview for political scientists and economists to chew
McGillivray’s work focuses on the issue of U.S. tariff policy in the first few
decades after the Revolution. She uses recent work in economic history to
reject the claims of some political theorists that “under the Articles of
Confederation, states adopted beggar-thy-neighbour tactics towards each other”
(pp. 96-97). She points to the decentralized nature of the state system and the
prevalence of agricultural interests to explain why interstate trade flourished
among the states while the Republic found itself unable to create a unified
tariff regime which could be used to retaliate against the British. Though
employing neither formal theory nor detailed statistics, this essay shows how
suggestive arguments can still be developed with some rigor if they rely on
careful argument from theory and pay attention to the theoretically-relevant
findings of the historical literature.
A bigger problem arises when comparing Pahre’s work to the two essays by McLean
and Schonhardt-Bailey. McLean provides a nuanced, albeit fairly traditional,
account of the ideological aspects of the debates over repeal of the Corn Laws.
However, given that repeal of the Corn Laws did not decisively produce free
trade in Britain, and given the observations by Pahre and others regarding the
irrelevance of British tariff liberalization on the eventual spread of free
trade on the Continent, one is left to doubt the central role assigned to the
political debates by McLean. The struggle over the Corn Laws is no doubt
interesting in and of itself, but if Britain was neither the magnanimous free
trader of lore nor the successful free-trade hegemon of international relations
theorists, then this singular political event loses its central importance in
the historiography of nineteenth- century commercial policy.
Though broader and more analytic, Schonhardt-Bailey’s study of how ideas can be
strategically employed to nationalize what might have been seen as merely local
or narrowly ideological interests shares the same problem of overemphasis of
the role of the Corn Laws repeal. There is no attempt to distinguish between
political debates that were salient as politics versus the objective weight of
a given policy in the overall structure of British trade or tariffs. However,
the broader theoretical discussion of how ideas are generalized and the attempt
to use Continental examples in addition to the British back story make this
work rather more complementary to the Pahre essay than the work of McLean which
tends to stick out from the rest.
Indeed, the conclusion by Schonhardt-Bailey tries to reconcile all these papers
by arguing that they are complementary and co-exist by virtue of their
differing levels of analysis. While no one can argue with this sage and fairly
general claim, the case would have been better made if the four essays at least
took care to coordinate the background narrative or stylized facts that overlap
among them. If any claim is going to be made for the virtues of promoting these
differing levels of analysis we would benefit from seeing how they can all
combine to produce a whole greater than the sum of the parts. Sadly they lost a
great opportunity and the numerous contradictions among the component parts
leave the promise of the concluding chapter unfulfilled.
Nonetheless, none of these criticisms should detract from the value to be
derived from reading this remarkable volume. I do not exaggerate in saying that
this should be standard reading for international relations theorists as well
as economists and economic historians interested in the political economy of
John V. C. Nye specializes in French economic history and industrial
organization. His publications include “The Myth of Free Trade in Britain and
Fortress France: Tariffs and Trade in the Nineteenth Century” Journal of
Economic History (1991).