A large number of American voters are tired of globalization—that much is clear. With Donald Trump calling for the abandonment of the North American Free Trade Agreement (or, more commonly, NAFTA) and Hillary Clinton turning her back on the Trans Pacific Partnership (TPP) free-trade agreement she herself had originally helped launch, both major-candidates abandoned what had come to be the standard pro-globalization position of those vying for the nation’s highest office. Most economists and many think-tank researchers have bemoaned this development, insisting that globalization generally leaves most nations—and most people—better off. But a review of American economic history suggests that something fundamental has changed: Increased globalization may make less sense now than it did in the recent past.
In the earliest days of the United States, globalization and competitiveness were some of the biggest issues on its founders’ minds. Adam Smith’s The Wealth of Nations was published in 1776, and the framers later debated Smith’s arguments for deregulation, free markets, and open trade. Thomas Jefferson saw the United States as primarily an agricultural producer and spoke for the Southern planters, who depended on foreign markets and who embraced Smith’s notion of minimal government. Alexander Hamilton felt differently: Aware of the mercantilism-fueled Industrial Revolution in the U.K. and the unprecedented wealth it created, he took the side of the nascent manufacturers of the Northern colonies by calling for subsidies to support the development of technology and manufacturing industries, as well as high tariffs to protect them.