On the Neomercantilist Component of Hooverism: Harvard's Frank W. Taussig Rejects the Pauper-Labor Argument

The Hooverites were emphatic in their view that America's trade relationships with the rest of the world should be organized to support rising standards of living in the United States and, more particularly, that tariff policies should be designed to defend American wage standards. The "cheap foreign labor" argument for protection was regularly invoked as providing a self-evident demonstration of the merits of this view. This doctrine won applause from interest groups that stood to benefit from high duties. But it gave more than a little pause to most economists, including some who were associated with Hoover during his Commerce Department years and sympathetic to other parts of his program.

Frank W. Taussig of Harvard University, then widely recognized as one of the nation's most thoughtful students of international trade, characterized the view of the professionals when he wrote: "I know of no economist, certainly none in England or this country, who would sanction the pauper-labor argument." He did not question the sincerity of those who believed "in their hearts that our standard of living and the very basis of our prosperity rest on the maintenance of a system of high duties." But economic theory could show that this belief was just plain wrong.

--William J. Barber, From New Era to New Deal: Herbert Hoover, the Economists, and American Economic Policy, 1921-1933, Historical Perspectives on Modern Economics (Cambridge, UK: Cambridge University Press, 1988), 62.