The protective tariff also facilitated minority factionalism, something close to rule by the rich or elite. The primary beneficiaries of the tariffs were not workers, but rather the owners whose goods competed with foreign products. They may have passed on some of their effective subsidy to their workers (as tariff supporters argued), but they assuredly kept a lot for themselves. This created an incentive for the great industrial trusts to involve themselves in politics, so that by the 1880s, Republicans (and some Northern Democrats) were utterly dependent on the rich for the financing of their campaigns. The relationship was wide-ranging: It also included maintaining laissez-faire regulatory policy on the state and national level, as well as protecting the gold standard. But the tariff was at the heart of the transaction between the elites and the lawmakers who helped them.
As I argued in my 2015 book A Republic No More, political corruption stems in part from having big, expansive government. The larger the state is, the more capable it is of picking winners and losers, and the more aggressively it will be lobbied to do so in a particular way. And while it is easily misunderstood in this age of the modern regulatory state, the tariff is perhaps the earliest example of big government — the state intervenes in otherwise free markets to bring about a result it finds socially or economically desirable. For more than 100 years — from roughly 1816 until 1932 — the federal government used tariffs in such a way, and it produced both majoritarian and minority factions. In other words, it corrupted our republic.
Jay Cost is the author of The Price of Greatness: James Madison, Alexander Hamilton, and the Creation of American Oligarchy.
Cost’s book is a great companion piece to Friends Divided by Gordon Wood.