[Alberta's Child]

Incorrect, USA, 1776-1930's.

That's actually a very misunderstood notion. The USA did not "get rich" in that period by assessing tariffs on imports -- it got rich by taking advantage of an "accident of history" (the settlement of the frontier) that allowed us to secure land and resources at costs far below what First World nations would have had to pay.

It's no accident that the last part of the period you mentioned (the 1930s) also happened to be the first time in history that the average American had a standard of living that exceeded the standard of living of someone living in advanced European countries like Britain and Germany.

This is exactly why one of the most important facts about this issue is often the one that is most often overlooked . . . In order to maintain an export-based economy, the nation doing the exporting must always have a lower standard of living than its trading partners.

[BohDaThone]

1. you're right that we didn't "get rich " from tariffs -- as always, we moved money around with tariffs, a lot of it from the South to the North.

2. But, it wasn't just "an accident of history." Those resources were worthless until we applied ingenuity, sweat and freedom. The Indians had the same resources, and didn't do much with them.

3. I think most economists would say that we had caught up with the "advanced european economies" by the 1880s, if not the 1850s.

4. You can have an export based economy, even if you are very rich, if you have a great comparative advantage,either in making something, or having some resource that is peculiar to your location (oil in the middle east, hydro power in Norway, etc).

[A. Pole]

In order to maintain an export-based economy, the nation doing the exporting must always have a lower standard of living than its trading partners.

But running trade deficit does not mean that the standard of living will be higher (in the long term).

[ninenot]

In order to maintain an export-based economy, the nation doing the exporting must always have a lower standard of living than its trading partners.

Well, that certainly explains American dominance of exporting from 1950-1985. Catch a course on econ history, AC.

[Paul Ross]

The USA did not "get rich" in that period by assessing tariffs on imports -- it got rich by taking advantage of an "accident of history" (the settlement of the frontier) that allowed us to secure land and resources at costs far below what First World nations would have had to pay.

Actually, yours is the seriously mistaken notion. The huge industrialization advantages that the U.S. realized were not just from the plentiful resources here (witness Japan becoming a manufacturing collossus without ANY indigenous resources other than labor) ..but from a protected environment fostered by U.S. protections of its capital formation...i.e., manufacturing industries.