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1-Page Summary of Kicking Away The Ladder
Overview
A lot of Western politicians believe that the way to solve poverty and conflict is for developing countries to follow their own path. They’re pressuring those countries to adopt free-market economies, democratize their governments, and improve workers’ rights.
Western leaders preach one thing, but do another. They talk about free trade and liberty, but they actually protect their own industries from foreign competition and exploit their workers. In short, they built their economies by doing the wrong things.
Many countries strive for high employment levels and political rights. However, these goals can come at the cost of a country’s wealth and power. Some countries have attempted to close this gap by trying to achieve both fairness and prosperity.
The following key points will show: why Britain employed child labor later than you think; America’s stance on free trade and the reasons behind it; and what prompted women to get their right to vote in Switzerland.
Big Idea #1: The USA achieved dominant economic standing by protecting its industries.
The United States is often seen as the country that promotes free trade. The flag of the U.S. stands for liberty, democracy and free trade practices.
Despite the US’s motto of free trade, early on it was actually government regulations that led to its prosperity and power. The United States threw off British rule in the late eighteenth century and became an independent country. It faced many problems: Its industry was undeveloped and weak compared to European powers.
The United States, which had just gained independence from Great Britain, started to protect its industries by imposing tariffs on foreign goods. This meant that any non-US products entering the country would be subject to a five percent customs duty. The policy kept US prices comparatively lower than those of other countries, helping domestic economic growth.
As the United States grew, it continued to protect its domestic industries. In fact, the customs tariff reached 25 percent in 1812 and 40 percent by 1820.
Protectionism is a policy of protecting an industry from foreign competition by means of tariffs on imports. The purpose is to help that country’s own industry develop and become strong enough to compete with other countries’ industries.
Protectionist policies were in place well into the 20th century. The U.S. was considered to have the most protectionist economy before World War II, second only to Russia.
Protectionism may seem like a bad idea in today’s global economy, but it was successful for the U.S. It grew to be the strongest country in the world because of protectionist policies that allowed its industries to grow and prosper without foreign competition. Only after achieving this dominant position did it open up its borders to free trade.
Big Idea #2: Britain established economic dominance starting during the industrial revolution by protecting its industries.
Britain was able to rule the seas due to its naval fleet. It was a small island that had little natural resources, so it adopted protectionist policies in order to become an economic powerhouse.
To understand England’s protectionist strategy, we have to go back in time to the fifteenth century. At that time, it was a rather poor country with little industry and an export of raw wool. They sold their wool to more sophisticated textile industries in Belgium and Holland.
In the 15th century, England was dependent on foreign countries for its textiles. However, one English king wanted to change that. He realized that protectionist policies would help his country develop an industry and he implemented laws to protect domestic manufacturers from foreign competition. First, he poached skilled workers from other countries with experience in textile manufacturing. Then he banned exports of raw wool needed by competitors abroad; this gave local manufacturers a monopoly on the material they needed to make their products thrive, while simultaneously depriving their overseas competitors of those materials. These new laws helped foster growth in England’s textile industry.
