The United States, as it began its long and successful growth in the early 19th century, consciously promoted domestic production through such activities as tariffs, Clay's American System, and many direct subsidies to railroads, canal companies, farmers (free land) etc. Today we view this blatant example of large scale and extensive import-substitution industrialization as having been very successful. Comment on this.

Question

Quizplus · Accepted Answer

The Answer is This is an interesting point and emphasizes that economic models tend to be a-historical. That is, they lack the historic perspective; and thus may be misleading as guides to long-run issues, such as economic growth. This also suggests that trade policy per se is almost certainly not sufficient to explain why some countries grow and others do not.

The United States, as It Began Its Long and Successful