‘The Triumph of Economic Freedom' Review: A Few Lessons From History

Wall Street Journal

7 hours ago

Since 2015, American politics has been riven by deep splits over economic policy. The tilt toward free markets that began in the mid-1970s and lasted roughly until the election of Barack Obama is a thing of the past. Virtually every laissez-faire position on topics ranging from trade to regulation has been challenged by an assortment of conservative economic nationalists, progressive populists and so-called neomercantilists. This last crowd includes close advisers to the current U.S. president.
The debate isn't exclusively about ideas and theory. It's also, perhaps mainly, about history. When making their case for protectionism, for example, today's economic nationalists insist that tariffs were central to the U.S. economy's takeoff in the late 19th century. Critics of that position (Douglas A. Irwin of Dartmouth, among others) contend, with better evidence, that America's explosive growth in those decades had little to do with tariffs. If anything, tariffs retarded growth in the sectors in which they were highest.
Today's tariff proponents, however, seem largely uninhibited by facts. The reason is simple. They've worked out that if you control the historical narrative surrounding economic questions, you are more than halfway toward winning the policy battles. This is the insight Phil Gramm and Donald J. Boudreaux bring to 'The Triumph of Economic Freedom.' In their words, 'he who writes history determines the future.' The writing of American economic history, they argue, has long been dominated by skeptics of capitalism peddling myths that nonetheless retain potency and, predictably, populate high school and college textbooks.
In eight chapters, Messrs. Gramm and Boudreaux tackle seven longstanding historical myths about American capitalism that still influence economic discussion today. In each case, they are careful not to caricature the conventional wisdom they challenge.