During the 1928 presidential election campaign, Herbert Hoover, the Republican candidate, argued that the United States should only import those products that could not be produced here. Do you believe that this would be a good policy? Explain.
Social Studies · High School · Thu Jan 21 2021
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Herbert Hoover's argument during the 1928 presidential campaign was based on an economic policy called protectionism. Protectionism is the theory or practice of shielding a country's domestic industries from foreign competition by taxing imports. Now, while the intention of such a policy may be to support local industries and maintain jobs within the country, it can have both positive and negative consequences.
A policy that restricts imports to only those products that cannot be produced domestically might bring certain short-term advantages, such as protecting and encouraging domestic industries and potentially reducing unemployment within those industries. However, it could also lead to several negative outcomes:
1. **Inefficiency:** If domestic industries know they are protected from foreign competition, they might not have the incentive to improve their efficiency or to innovate. This can make the local industry less competitive in the long run.
2. **Higher prices:** When competition is limited, the domestic producers could potentially raise prices, which would be paid by the local consumers. This, in turn, could reduce the purchasing power of the population and might lead to a lower standard of living.
3. **Retaliation and trade wars:** Other countries might retaliate with their own tariffs, leading to a trade war that could hurt the global economy, as well as the domestic one if it relies on exporting other goods.
4. **Limited selection:** Consumers would have fewer choices since they could only buy locally produced goods or those which are not produced domestically. This limits the variety of goods available to the population.
Today, most economists agree that while selective tariffs and trade policies can be beneficial in protecting infant industries or addressing unfair trade practices, broad protectionist policies like the one Hoover suggested can have negative long-term effects on the economy.