The idea that tariffs historically helped spur American prosperity has become a common refrain for many in the Republican Party. And at first blush, it certainly seems plausible—the McKinley era witnessed a fair amount of protectionism alongside considerable economic growth. But there is a fatal flaw with this view, which has been pointed out most explicitly by Ludwig von Mises and his fellow Austrian economists. Understanding their perspective is critical if we want to craft good trade policy.

One of the important features of Austrian economics in the Misesian tradition is its approach to interpreting historical events. According to Mises, we can’t simply infer causation from the course of history, because too many factors are at play and it’s impossible to control for them all.

Consider the McKinley era. During this time technology was advancing rapidly, demographics were changing, transportation infrastructure was being built—lots and lots was changing. So simply noting that protectionism and economic progress happened side by side doesn’t really demonstrate that the former was any help to the latter. For all we know, the economy might have been progressing due to other factors in spite of the tariffs, and would have progressed even more if they had been lifted. …

To infer causation simply by looking at history with no theorem is really to commit the post-hoc fallacy: A happened, then B happened, therefore A caused B. In our case: tariffs were implemented, then the economy prospered, therefore tariffs caused prosperity. …

Based on this economic understanding, we can confidently say that the tariffs in the McKinley era were—generally speaking—working against America’s prosperity. America would have progressed even more in their absence.

Now, some may be tempted to dispute this conclusion, and that’s fine. But there is a valid and an invalid way to dispute it. The valid way would be to question the reasoning of economist David Ricardo, to demonstrate some flaw in the logical system of economic theory. The invalid way would be simply pointing to some historical period where tariffs and economic growth happened to coincide and saying “See, that settles it, tariffs are good for the economy.”

It feels silly that this even needs to be said, and that Ludwig von Mises had to dedicate much of his career to explaining this simple point. But if powerful figures insist on justifying bad policies with bad historical arguments, someone needs to call them out on it.