Why the U.S. Shifted from Protectionism to Free Trade
This paper examines the historical and economic reasons behind the United States' transition from a protectionist, enclosed economy to one that actively advocates for free trade. Drawing on scholarship by Krasner, McKeown, Rogowski, and Krol, the paper traces the shift from the aftermath of World War I through the mid-twentieth century. It argues that the change was driven by a combination of domestic goals — including maximizing aggregate income, social stability, political power, and economic growth — as well as structural social changes, external trade pressures, and the tangible benefits of liberalized trade such as lower prices, job creation, and technological innovation.
- Introduction: From Protectionism to Free Trade: Historical context for U.S. trade policy shift
- National Goals and the Drive for Open Trade: Krasner's four national goals driving trade openness
- External Pressures and Hegemonic Power: McKeown on power and international trade participation
- Social Structural Changes and Domestic Demand: Rogowski on society, rural shifts, and trade exposure
- Economic Benefits of Trade Liberalization: Quantified gains from open trade and specialization
- Conclusion: Summary of causes behind U.S. trade policy change
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What makes this paper effective
- Synthesizes multiple scholarly sources — Krasner, McKeown, Rogowski, and Krol — to build a multi-causal argument rather than relying on a single explanation.
- Moves logically from political and economic motivations to social structural forces to concrete measurable benefits, giving the argument progressive depth.
- Uses a direct quotation from Krol (2008) effectively to anchor the paper's concluding claim about the real-world gains of trade liberalization.
Key academic technique demonstrated
The paper demonstrates the technique of layered argumentation: each new scholarly source is introduced not to contradict the previous one, but to add an additional explanatory dimension. This approach shows that complex policy shifts rarely have a single cause, and that triangulating across multiple frameworks produces a richer, more credible analysis.
Structure breakdown
The paper opens with historical context situating the U.S. trade shift in the post-WWI period, then introduces Krasner's four national goals as a primary analytical lens. McKeown's hegemonic power argument extends the political rationale, while Rogowski introduces the role of external forces and domestic social structure. The paper closes by quantifying the economic benefits of free trade, grounding the theoretical discussion in tangible outcomes. The structure moves from macro-political to socio-structural to empirical-economic.
Introduction: From Protectionism to Free Trade
The modern United States is a declared advocate of free trade. However, this approach was only implemented over the past five decades; prior to that, the U.S. economy was relatively enclosed and protectionist. This paper examines the reasons that determined this shift in approach to international trade.
It can be argued that the transformation commenced when the First World War ended. As the United States was not directly involved in the fighting, its economy continued to prosper through the 1910s. When the war ended, the United States became the creditor of the economies affected by the conflict. In 1929, Americans were confronted with the threats of the greatest economic crisis the country had faced to that point, and their subsequent involvement in the Second World War further deepened their financial troubles.
In light of these events, U.S. officials perceived consumerism as an appropriate means of achieving economic prosperity. To accomplish growth through consumerism, however, both domestic and foreign customers needed extended access to American and international products. Consequently, barriers to international trade were lifted, and the U.S. economy transitioned from an enclosed, protectionist system to one that supported and promoted free trade. This movement encouraged economic growth not only through consumerism, but also through the increased ability to benefit from the comparative advantages of various global regions — a concept originally advanced by economist David Ricardo in his theory of comparative advantage.
The initial openness to international trade centered on lifting barriers to the trade of finished goods. Over time, however, barriers were also removed on the circulation of capital, technologies, and even labor.
National Goals and the Drive for Open Trade
Stephen D. Krasner (1976) argues that the United States, like any other country, based its decision in favor of free trade on a desire to accomplish domestic goals. In State Power and the Structure of International Trade, Krasner also points out that a country will change its approach to international trade when it has both the power and the incentive to do so. He identifies four types of national goals that guided the United States in its shift toward free trade:
The United States aimed to achieve and maintain all four of these goals. As a state, the U.S. had already become an important international player, and the change from an enclosed economy to an open one would further increase its power — not only politically, but economically as well. Despite the importance of all four goals, the primary drivers appear to have been political power and economic prosperity.
External Pressures and Hegemonic Power
Timothy J. McKeown (1983), though primarily drawing on European examples, similarly argues that a state will play an influential role in international trade when it stands to gain from doing so and when it possesses sufficient power to modify its position. The United States demonstrated significant superiority over its neighbors and rivals throughout the twentieth century. In 1850, for instance, it accounted for only 8 percent of all international trade; by 1913, its share had grown to 11 percent, and it continued on an upward trajectory in the years that followed.
The conclusion drawn from McKeown's work aligns with Krasner's: the United States transitioned from a protectionist to an open trade economy in order to maximize its national objectives, and its success was made possible by its capacity to implement that change. Correlating these academic findings with the historical context outlined above, it can be said that the United States was eager to revive its economically challenged position and, with this objective in mind, made the transition from protectionism to free trade.
Conclusion
The United States' shift from protectionism to free trade was driven by a confluence of political ambition, economic necessity, social structural change, and the measurable gains that open markets deliver to consumers and producers alike. Drawing on Krasner's national goals framework, McKeown's hegemonic stability perspective, Rogowski's analysis of social structure and trade exposure, and Krol's empirical assessment of trade benefits, it is clear that no single cause explains the transition. Rather, it was the convergence of domestic imperatives, international power dynamics, and evolving societal demands that led the United States to become one of the world's foremost advocates of free trade.
References
Krasner, S. D. (1976). State power and the structure of international trade. World Politics, 28(3), 317–347.
Krol, R. (2008). Trade, protectionism and the U.S. economy: Examining the evidence. Trade Briefing Paper. Cato Institute, September 16, 2008.
McKeown, T. J. (1983). Hegemonic stability and 19th century tariff levels in Europe. International Organization, 37(1), 73–91.
Rogowski, R. (1987). Political cleavages and changing exposure to trade. The American Political Science Review, 81(4), 1121–1137.
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