Working Paper: NBER ID: w9943
Authors: Douglas A. Irwin
Abstract: Alexander Hamilton's Report on Manufactures (1791) is a classic document in the history of U.S. economic policy, but its fate in Congress is not well known. It is commonly believed that the report was never implemented. Although Hamilton's proposals for bounties (subsidies) failed to receive support, virtually every tariff recommendation put forward in the report was adopted by Congress in early 1792. These tariffs were not highly protectionist duties because Hamilton feared discouraging imports, which were the critical tax base on which he planned to fund the public debt. Indeed, because Hamilton's policy toward manufacturing was one of encouragement and not protection, those interests shifted their political support from the Federalists to the Jeffersonian Republicans during the 1790s.
Keywords: No keywords provided
JEL Codes: F1; N7
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Hamilton's proposals for bounties and subsidies failed to gain legislative support (H81) | shift in political allegiance among manufacturing interests from Federalists to Jeffersonian Republicans (N61) |
| lack of support for bounties (Y70) | disappointment among manufacturing interests (L69) |
| disappointment among manufacturing interests (L69) | influence their political alignment (D72) |
| Hamilton's emphasis on modest tariffs was driven by his concern for fiscal revenue to fund public debt (H69) | Hamilton's policies were more about encouraging manufacturing rather than outright protectionism (N61) |
| Hamilton's actions (N41) | legislative outcomes (D72) |