The New Freedom · Chapter
VII: The Tariff—'Protection,' or Special Privilege? explained
Wilson argues that the protective tariff has evolved from a policy to nurture infant industries into a tool for special privilege, enabling monopolies and trusts to control prices, stifle competition, and extract profits from consumers.
What happens
Wilson argues that the protective tariff has evolved from a policy to nurture infant industries into a tool for special privilege, enabling monopolies and trusts to control prices, stifle competition, and extract profits from consumers. He contrasts the old doctrine with the new 'cost of production plus reasonable profit' formula, criticizes the expert lobbyists who manipulate tariff schedules in secret, and invokes McKinley's late recognition of the need for reciprocity and flexibility.
Themes in this chapter
Monopoly and Special Interests
Wilson details how the tariff enables combinations to destroy domestic competition, control prices, and guarantee profits on inefficient or closed factories.
Transparency and Public Counsel
The chapter condemns the secrecy and expert lobbying that keep the public ignorant of tariff manipulations, contrasting it with the need for open government.
Economic and Legal Adjustment to Change
Wilson argues that the tariff system must adapt to modern conditions, citing McKinley's shift toward reciprocity and the failure of rigid protection.
The Common Man and Popular Wisdom
Implied in the critique of expert lobbyists overwhelming ordinary citizens and consumers who bear the hidden costs of tariff schedules.
Characters to notice
- Mr. McKinley
Cited as an apostle of protection who later recognized the need for reciprocal trade and warned against rigid tariff policies.
- Mr. Aldrich
Mentioned in connection with the Payne-Aldrich tariff; Wilson notes that members of the Senate who asked Aldrich direct questions were refused information.
- Jefferson
Not directly referenced in the excerpts; included as a placeholder only if contextually implied—omitted here.
- Lincoln
Not directly referenced in the excerpts; omitted.
Key passages
“The new doctrine of the protectionist is that the tariff should represent the difference between the cost of production in America and the cost of production in other countries, plus a reasonable profit to those who are engaged in industry.”
Protectionists now openly demand that tariffs guarantee domestic manufacturers a profit on top of covering higher U.S. production costs.
Wilson highlights this as a radical departure from the original protective theory.
“They propose, for example, to put the carbon for electric lights in two-foot pieces instead of one-foot pieces—and you do not see where you are getting sold, because you are not an expert.”
Lobbyists hide massive consumer costs in tiny technical changes that only specialists can detect.
Illustrates the secrecy and complexity of modern tariff schedules.
“William McKinley, before he died, showed symptoms of adjustment to the new age such as his successors have not exhibited.”
McKinley recognized the need for tariff reform and reciprocity, but his successors ignored his warning.
Wilson uses McKinley's authority to argue for change.