<abstract xmlns="http://www.w3.org/1999/xhtml"><p>A disparity exists between mainstream perception and reality with regard to American economic history. There is widespread belief among the public, media, and even some scholars that the U.S. amassed its wealth and prosperity from the adoption of exclusively free-market principles from the onset of the union. This is far from reality. Since 1980, the U.S. government has adopted policies that largely support the free-market ideology and can be classified as neoliberal. However, As Chang (2002) and Cohen and DeLong (2016) have shown, during the early stages of economic development and critical junctures whilst a middle-income country, the U.S. record is one of active government intervention in targeted industries, the creation of important institutions to complement free-market competition, and the widespread use of trade protection in support of infant industries. This misconception has significant ramifications for present-day developing countries, which are routinely advised to adopt neoliberal policies with insufficient regard for the idiosyncratic stage of economic development. This paper documents the misconceptions by examining the theoretical basis and historical record of U.S. industrial and trade policy. We detail how this misconception became widespread and ultimately entered policymaking by analyzing two contributing factors: the rise of neoliberalism, and the standard economics curriculum.</p></abstract>

A disparity exists between mainstream perception and reality with regard to American economic history. There is widespread belief among the public, media, and even some scholars that the U.S. amassed its wealth and prosperity from the adoption of exclusively free-market principles from the onset of the union. This is far from reality. Since 1980, the U.S. government has adopted policies that largely support the free-market ideology and can be classified as neoliberal. However, As Chang (2002) and Cohen and DeLong (2016) have shown, during the early stages of economic development and critical junctures whilst a middle-income country, the U.S. record is one of active government intervention in targeted industries, the creation of important institutions to complement free-market competition, and the widespread use of trade protection in support of infant industries. This misconception has significant ramifications for present-day developing countries, which are routinely advised to adopt neoliberal policies with insufficient regard for the idiosyncratic stage of economic development. This paper documents the misconceptions by examining the theoretical basis and historical record of U.S. industrial and trade policy. We detail how this misconception became widespread and ultimately entered policymaking by analyzing two contributing factors: the rise of neoliberalism, and the standard economics curriculum.

History Re-Written: Misconceptions of U.S. Trade and Industrial Policy and the Influence of Neoliberalism

Senior Research Assistant, Christopher Newport University

Review of Economic Perspectives

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

A disparity exists between mainstream perception and reality with regard to American economic history. There is widespread belief among the public, media, and...

History Re-Written: Misconceptions of U.S. Trade and Industrial Policy and the Influence of Neoliberalism

Published Online: Mar 30, 2021

Page range: 3 - 25

Received: Dec 31, 2019

Accepted: Mar 01, 2021

DOI: https://doi.org/10.2478/revecp-2021-0001

Keywords
neoliberalism, American economic history, industrial policy, trade policy, economic education

© 2021 Travis K. Taylor et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

History Re-Written: Misconceptions of U.S. Trade and Industrial Policy and the Influence of Neoliberalism

Published Online: Mar 30, 2021

Page range: 3 - 25

Received: Dec 31, 2019

Accepted: Mar 01, 2021

DOI: https://doi.org/10.2478/revecp-2021-0001

Keywordsneoliberalism, American economic history, industrial policy, trade policy, economic education

© 2021 Travis K. Taylor et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
neoliberalism, American economic history, industrial policy, trade policy, economic education