| Type | Working paper |
| Title | “Different Shades of American Protectionism” |
| Author | Jaya Prakash Pradhan |
| Published | 2005 · MPRA Paper No. 16004 · University Library of Munich, Germany |
| Focus | The history of US protectionism and what it implies for developing-country policy |
| Read | Working paper (PDF) |
This is a plain-language summary of “Different Shades of American Protectionism” (Pradhan, MPRA Paper No. 16004, 2005). It is an essay advancing an argument; the interpretation below is the author’s case, and the closing section notes that this is a debated position.
In short:
- The paper argues that the United States — today a leading advocate of free markets — built its own industries behind protectionist trade, investment, and industrial policies, and embraced free trade mainly after its firms became globally competitive.
- It traces this across three phases (roughly 1870 onward) and contends that strategic protection, in evolving forms, persisted even into the present.
- Its conclusion is a lesson for developing countries: don’t discard the strategic role of the state, or rely wholly on free-market orthodoxy, because today’s free-trade champions didn’t develop that way.
The argument
Does the United States practice what it preaches on free trade? This essay-style working paper by Jaya Prakash Pradhan argues that, historically, it did not — and that the gap between American free-market rhetoric and America’s actual developmental history carries an important lesson for poorer countries today. The thesis sits in a well-known tradition of economic-history argument (associated with writers like Friedrich List and, more recently, Ha-Joon Chang) that today’s rich countries used protection and industrial policy to develop, then advocated openness once they were ahead. It’s a pointed, “critical lens” piece rather than an empirical study, and it’s best read as a clearly-argued case.
Three phases of American protection
The paper organises its account of US protectionism into three eras, in which the tools change but, in its reading, the protective intent persists.
In the paper’s telling, Phase 1 (1870–1913) was the era of overt protection — high tariffs on manufactured goods, infant-industry protection, restrictions on foreign investment — all aimed at building domestic industrial capability. Phase 2 (1956–1992) shifted to more strategic tools: voluntary export restraints, shielding the auto industry from Japanese competition, support for electronics and aerospace, and government procurement favouring domestic firms. Phase 3 (1990s onward) brought subtler instruments still — anti-dumping actions, technical barriers to trade, the use of environmental and labour standards, and restrictions on outsourcing. The throughline the paper draws is that the form of protection modernised while the underlying willingness to protect strategic industries endured.
Preached vs practised
The rhetorical heart of the essay is the contrast between the free-market message and the policy record.
The paper sets the free-market message — open markets, open investment, minimal intervention, a level playing field — against what it characterises as the American practice: strategic protection of key sectors, screening of inward investment, active industrial policy, and particular support for knowledge-based industries. It points to areas where the US has long maintained foreign-ownership limits or other restrictions — among them aviation, broadcasting, defence-related industries, and parts of financial services and shipping — as evidence that strategic protection never fully went away. (These specific examples are the paper’s; see the note below on verifying the exact figures.)
The lesson for developing countries
The payoff is a policy argument aimed at the developing world. If even the United States built its industrial strength through strategic state intervention and selective protection, the paper contends, then developing and less-developed countries should be wary of accepting free-market orthodoxy wholesale. It urges them to study historical development paths, keep policy space for strategic intervention, build domestic capabilities before fully opening, time market-opening carefully, and design industrial policies suited to their own context — balancing openness with the protection of genuinely strategic sectors. The underlying claim is the memorable one: don’t just listen to what the already-rich countries say; look at what they actually did on the way up.
A note on the debate
This is a contested argument, and worth reading as such. The “kicking away the ladder” thesis — that rich countries used protection to develop and now deny that option to others — is influential and well-supported by economic historians, but it’s not the only view. Critics argue that the US also grew through large internal free trade, immigration, abundant resources, and strong institutions, and that high tariffs may have coincided with growth rather than caused it; mainstream trade economists generally hold that broad protectionism carries real costs even where targeted intervention sometimes succeeds. The paper makes the protectionist-history case clearly and deliberately; a fair reader can weigh it against those counterarguments. What’s not seriously disputed is the narrower historical point the essay rests on — that the United States used tariffs and active industrial policy extensively during its rise, rather than the pure free-market path sometimes implied in policy debates.
Read the academic abstract
America now advocates the path of free markets to industrialisation. However, even a cursory look into its developmental history shows that protectionism was the hallmark of the industrial, investment, and trade policies it followed. Far from adopting a free-market regime, the United States used strategic interventions by the state to promote American industries, especially knowledge-based ones. Developing and less-developed countries should therefore not neglect the strategic role of the state in the development process, nor rely completely on a regime based on free-market forces.Cite this working paper
Pradhan, J. P. (2005). Different shades of American protectionism (MPRA Paper No. 16004). Munich: University Library of Munich.
Read the working paper (PDF) →
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