Modification de Domestic trade politics

International political economy is an important area of study that encompasses the global interplay between politics, economics, and culture. Domestic trade politics are integral to this dynamic, as countries strive to maximise the benefits and minimise the costs of the international trading system. Domestic trade policies can help create a competitive advantage in the global marketplace while also providing the opportunity to promote economic stability and growth. Such policies can have profound impacts on the global economy and can be used to help promote or protect a nation’s economic interests. Understanding the implications of domestic trade politics is critical for governments, businesses, and citizens alike, as it can help them to make informed decisions and maximise their benefits from the international trading system.

Domestic trade policies can take many forms and can be implemented for a variety of reasons. For example, a government may implement tariffs or quotas on imports in order to protect domestic industries from foreign competition. This can help create jobs and increase domestic production, but it can also lead to higher consumer prices and reduced access to foreign goods. Other domestic trade policies can be used to promote specific industries or sectors of the economy. For example, a government may offer subsidies or tax breaks to encourage the development of new technologies or expand existing industries. This can help to create new economic opportunities and drive innovation, but it can also lead to market distortions and unfair competition. There are also trade policies that are designed to promote social or environmental objectives. For example, a government may impose tariffs on goods produced in countries with poor labour or environmental standards to encourage companies to improve their practices. This can help to promote social and environmental responsibility, but it can also lead to trade disputes and retaliatory measures.

= Introduction =
== Models of trade politics ==
Liberalism and mercantilism are two different economic theories that have influenced the development of international trade and economic policies.

Liberalism is an economic theory that emphasises the role of free markets in determining the allocation of resources and the distribution of wealth. It is based on the idea that individuals, rather than governments, should be free to make their own economic decisions and that the market, rather than government intervention, should determine the prices of goods and services.

On the other hand, mercantilism is an economic theory that emphasises the role of government in regulating and controlling trade and economic activity to increase the state’s wealth and power. It is based on the idea that a country’s wealth is determined by its stock of gold and other precious metals. The government should pursue policies that increase exports and decrease imports to accumulate more wealth.

One key difference between liberalism and mercantilism is their respective views on the role of government in the economy. Liberalism advocates for minimal government intervention in economic affairs, while mercantilism advocates for a more active role for government in regulating trade and economic activity. Another key difference is their respective views on the importance of international trade. Liberalism sees international trade as a way to increase efficiency and wealth, while mercantilism sees it as a way to increase the wealth and power of the state.

== Analytical frameworks ==

International political economy (IPE) is a field of study that examines the interaction between politics and economics in the international system. It seeks to understand how political and economic factors influence each other and shape the policies and outcomes of international trade, investment, and financial relations.

In the real world, trade policy outcomes are influenced by a complex set of factors, including the interests of different actors, the institutions that govern international economic relations, and the ideas and ideologies that shape economic policies. These factors interact and influence each other in a dynamic and complex way, making it difficult to predict the direction and outcome of trade policy decisions.

For example, the interests of different actors, such as firms, workers, and governments, may conflict with each other and shape trade policy differently. Institutions, such as international organisations like the World Trade Organization (WTO), also play a role in shaping trade policy by establishing rules and procedures for international trade and dispute resolution. And ideas and ideologies, such as liberal or mercantilist views of trade, can shape the direction of trade policy by influencing the way policymakers and other actors think about trade and its consequences.

IPE provides an analytical framework for understanding the complex and multifaceted nature of trade policy outcomes and how the interaction of these different factors influences them. It helps scholars and policymakers understand the underlying forces shaping trade policy and the implications of different policy choices.

International political economy (IPE) often begins with identifying the interests of different actors in the international system, as these interests can shape and influence trade policy outcomes. Actors in the international system can include classes, sectors, individual firms, voters, and governments, among others.

Classes are groups of people who share common economic interests based on their position in the social and economic hierarchy. For example, the working class may have different interests from the upper class when it comes to trade policy due to their different positions in the economic system.

Sectors refer to different industries or areas of economic activity, such as manufacturing, agriculture, or services. Different sectors may have different interests in trade policy due to their unique economic characteristics and the impact of trade on their respective industries.

Individual firms also have specific interests in trade policy, as trade can directly affect their ability to compete in global markets and access new customers.

Voters also have an interest in trade policy, as it can affect the availability and prices of goods and services, as well as job opportunities and wages.

As the main policymakers, governments also have their own interests in trade policy, which may be influenced by the interests of their constituents and other factors such as national security and international relations.

Understanding the interests of these different actors is important in IPE because it helps to shed light on the motivations and drivers behind trade policy decisions and the potential consequences of those decisions.

In international political economy (IPE), examining how particular political institutions shape and influence trade policy outcomes is important. Political institutions refer to the formal and informal rules, procedures, and structures that govern a country’s political system.

Political institutions can significantly impact trade policy by filtering and shaping the interests and preferences of different actors and shaping the policy-making process. For example, the type of government (democracy vs autocracy) can influence trade policy by determining the extent to which different interests and preferences are represented and considered in the policy-making process.

The electoral system (majoritarian vs proportional) can also shape trade policy by determining the balance of power between different political parties and groups and how closely the public policy preferences are reflected in policy decisions.

The separation of powers (executive vs congressional authority) can affect trade policy by determining which branch of government has the primary responsibility for making trade policy decisions and how much influence different branches have on the policy-making process.

The central bank’s independence can also influence trade policy by determining the extent to which monetary policy (which can affect exchange rates and international trade) is independent of political influence.

Understanding how these and other political institutions filter and shape the interests and preferences of different actors is important in IPE because it helps to explain the policy choices made by governments and the potential consequences of those choices.

= Societal models =

== Factor model ==

=== The Heckscher-Ohlin model ===
The Heckscher-Ohlin model, also known as the Heckscher-Ohlin-Samuelson (HOS) model, is an economic model that explains the pattern of international trade based on differences in the relative abundance or scarcity of certain factors of production, such as capital and labour. The model was developed by economists Eli Heckscher and Bertil Ohlin in the early 20th century and later extended by economist Paul Samuelson. It is based on the assumption that countries will specialise in producing goods that use their abundant factors of production more intensively and trade with other countries to obtain goods that use their scarce factors of production less intensively.

According to the model, a country with a relative abundance of capital (compared to labour) will tend to specialise in producing and exporting capital-intensive goods, such as machinery and equipment, and import labour-intensive goods, such as textiles and apparel. Conversely, a country with a relative abundance of labour (compared to capital) will tend to specialise in producing and exporting labour-intensive goods and importing capital-intensive goods.

The Heckscher-Ohlin model has influenced our understanding of international trade and has been widely used to explain trade patterns between countries. However, it has also been subject to criticism and has been modified and extended to take into account other factors that influence trade, such as technological differences and transportation costs.

One example of how the Heckscher-Ohlin model might be applied to explain international trade patterns between China and the United States is by producing toys and aerospace products.

According to the model, China, which has a relatively abundant supply of labour, might specialise in producing and exporting labour-intensive goods, such as toys, which require a large amount of labour to produce but relatively little capital. The United States, which has a relatively abundant supply of capital, might specialise in producing and exporting capital-intensive goods, such as aerospace products, which require a large amount of capital to produce but relatively little labour.

In this scenario, the United States might import toys from China and export aerospace products to China, taking advantage of their respective comparative advantages in producing these goods. This pattern of trade would be consistent with the predictions of the Heckscher-Ohlin model.

It is worth noting that this example is simplified and does not consider other factors that could influence trade patterns between the two countries, such as technological differences, transportation costs, and government policies. Nonetheless, the Heckscher-Ohlin model provides a useful framework for understanding how differences in the relative abundance of factors of production can shape international trade patterns.

=== Heckscher-Ohlin model’s distributional effect ===

The Heckscher-Ohlin model is an economic model that explains the pattern of international trade based on differences in the relative abundance or scarcity of certain factors of production, such as capital and labour. While the model is primarily concerned with understanding the overall pattern of trade between countries, it can also have distributional effects within countries.

One distributional effect of the Heckscher-Ohlin model is that it can lead to changes in the relative demand for different factors of production within a country. For example, suppose a country specialises in producing and exporting capital-intensive goods, as the model predicts. In that case, it might lead to an increase in the demand for capital and a decrease in the demand for labour. This could result in an increase in the wages of capital owners and a decrease in workers’ wages, leading to a shift in income distribution within the country.

Another distributional effect of the Heckscher-Ohlin model is that it can lead to changes in the relative demand for different industries within a country. For example, suppose a country specialises in producing and exporting labour-intensive goods, as the model predicts. In that case, it might lead to an increase in the demand for labour in the labour-intensive industries and a decrease in the demand for labour in other industries. This could result in shifts in employment and wages within the country, as well as changes in the overall structure of the economy.

It is worth noting that these distributional effects are not necessarily negative and can lead to overall gains in efficiency and welfare. However, they can also have negative consequences for some groups, particularly those who lose out as a result of the changes in the demand for factors of production or industries. As such, it is important to consider the distributional implications of trade policies and to design policies that address any negative effects.

== Political implications ==

=== Class conflict ===

International trade can have political implications in terms of class conflict, as it can lead to changes in the demand for different factors of production and industries, which can affect the economic interests and power of different social classes.

For example, if international trade leads to an increase in the demand for capital and a decrease in the demand for labour, as the Heckscher-Ohlin model predicts, it could lead to an increase in the wages of capital owners and a decrease in the wages of workers. This could lead to a shift in the distribution of income and wealth within the country, potentially exacerbating class conflict between capital owners and workers.

Similarly, if international trade leads to an increase in the demand for certain industries and a decrease in the demand for others, it could lead to shifts in employment and wages within the country, potentially affecting the economic interests and power of different social classes.

These distributional effects of international trade can have political implications in terms of class conflict, as they can lead to tensions and conflicts between different social classes over the distribution of economic benefits and burdens. Governments and policy-makers may need to consider these implications when designing trade policies and consider measures to address any negative distributional effects.

=== Political parties ===

International trade can also have political implications in terms of political parties, as it can affect the economic interests and power of different groups within society and shape political debates and alignments.

For example, suppose international trade leads to changes in the demand for different factors of production and industries, as discussed above. In that case, it could affect the economic interests and power of different social groups and potentially influence their political preferences and allegiances. This could lead to changes in the support for different political parties and the issues they prioritise.

Political parties may also take different positions on trade policy based on their ideology and the interests of their constituents. For example, a party representing the interests of capital owners might support trade policies that favour the export of capital-intensive goods, while a party that represents the interests of workers might support trade policies that favour the export of labour-intensive goods.

Political parties may also be influenced by the broader public opinion on trade policy, which can shape the perceived benefits and costs of trade for different groups within society. For example, suppose international trade is seen as leading to job losses or wage decreases for some groups. In that case, it could lead to increased support for political parties that oppose trade or advocate for policies that address these negative effects.

In summary, international trade can have political implications in terms of political parties by influencing the economic interests and power of different groups within society and shaping political debates and alignments.

=== Interest groups ===
International trade can also have political implications regarding interest groups, as it can affect the economic interests and power of different groups within society and shape the agendas and activities of interest groups. Interest groups are organisations that represent the interests of a particular group or sector within society and advocate for policies that reflect those interests. They can include business associations, labour unions, environmental groups, and other types of advocacy organisations.

As discussed above, international trade can affect the economic interests of different groups within society, and this can influence the agendas and activities of interest groups that represent those groups. For example, suppose international trade leads to job losses or wage decreases for certain groups. In that case, it could lead to increased activism and advocacy by labour unions and other groups representing the interests of those affected. Similarly, suppose international trade increases exports and profits for certain industries. In that case, it could lead to increased lobbying and advocacy by business associations and other groups representing those interests.

Interest groups may also take different positions on trade policy based on their ideology and the interests of their constituents. For example, a labour union might support trade policies that favour the export of labour-intensive goods and protect the interests of workers. In contrast, a business association might support trade policies that favour the export of capital-intensive goods and protect the interests of businesses.

=== The Corn Law’s case ===
The Corn Laws were a series of tariffs and other trade restrictions on imported grains that were implemented in the United Kingdom in the 19th century. These laws were designed to protect domestic grain producers from foreign competition and ensure a steady grain supply for the domestic market. The Corn Laws provide an example of how trade policy can have distributional effects within a country and how these effects can shape political debates and alignments. The Corn Laws were supported by landowners and grain producers, who benefited from the protection they provided. Still, they were opposed by urban consumers and industrialists, who were hurt by the higher prices of grain caused by the tariffs.

This conflict over the Corn Laws reflected a wider divide between agricultural and industrial interests in the United Kingdom. It contributed to the development of the modern political system in the country. The repeal of the Corn Laws in the mid-19th century was a crucial moment in the history of the United Kingdom and had significant implications for the country’s economic and political development.

The Corn Laws also illustrate how trade policy can be influenced by the interests of different groups within society and how these interests can shape policy outcomes. The support for the Corn Laws among landowners and grain producers reflects their economic interests, while the opposition to the laws among urban consumers and industrialists reflects their economic interests. The ultimate repeal of the Corn Laws reflects the changing balance of power between these groups and the shifts in their relative economic interests.

== Sector model ==
The Ricardo-Viner model is a theoretical framework used to analyse trade policy’s effects on a country’s international trade and economic welfare. It is named after David Ricardo and John Viner, two classical economists who contributed significantly to the theory of international trade. The Ricardo-Viner model is based on the idea that trade between countries can lead to economic gains for both parties as long as each country specialises in producing the goods that it can produce most efficiently. The model assumes that countries will choose to specialise in producing and exporting the goods they have a comparative advantage in and will import the goods they have a comparative disadvantage in. This specialisation can lead to gains from trade for both countries, as each can focus on producing the goods that it is best at rather than trying to produce everything itself.

The Ricardo-Viner model is often used to analyse the effects of trade policy on international trade and economic welfare. For example, it can be used to analyse the effects of tariffs and other trade barriers on trade patterns between countries and to evaluate the potential gains from trade liberalisation and free trade agreements.

The Stolper-Samuelson theorem is a theoretical framework used to analyse the effects of international trade on income distribution within a country. It is named after Wolfgang Stolper and Paul Samuelson, two economists who developed the theorem in the 1940s.

Like the Ricardo-Viner model, the Stolper-Samuelson theorem is based on the idea that trade between countries can lead to economic gains for both parties. However, the Stolper-Samuelson theorem focuses specifically on how international trade affects income distribution within a country, rather than on the overall gains from trade.

According to the Stolper-Samuelson theorem, international trade can lead to a redistribution of income within a country, with the owners of the factors of production that are used intensively in the production of export goods (such as capital or skilled labour) gaining at the expense of the owners of the factors of production that are used intensively in the production of import-competing goods (such as unskilled labour). This is because international trade can lead to changes in the prices of different goods and production factors, affecting income distribution within a country.

So, while the Ricardo-Viner model and the Stolper-Samuelson theorem are both concerned with the effects of international trade on economic welfare, the Ricardo-Viner model focuses on the overall gains from trade. In contrast, the Stolper-Samuelson theorem focuses on the distribution of those gains within a country.

The Stolper-Samuelson theorem suggests that international trade can lead to a redistribution of income within a country, with the owners of the factors of production that are used intensively in the production of export goods (such as capital or skilled labour) gaining at the expense of the owners of the factors of production that are used intensively in the production of import-competing goods (such as unskilled labour).

This income redistribution can lead to forming political coalitions along industry lines, as those who have gained from trade (such as owners of export-oriented firms) may support policies that promote international trade and liberalisation. In contrast, those who have lost from trade (such as workers in import-competing industries) may support policies that protect their industries from foreign competition.

It’s important to note that the effects of international trade on income distribution within a country can be complex and depend on various factors. For example, the overall gains from trade may be large enough to compensate those who have lost from trade, or the government may choose to implement policies that redistribute income to mitigate the negative effects of trade on certain groups. Additionally, trade effects on income distribution can vary across different industries and regions within a country.

The Stolper-Samuelson theorem suggests that international trade can lead to a redistribution of income within a country, with the owners of the factors of production that are used intensively in the production of export goods (such as capital or skilled labour) gaining at the expense of the owners of the factors of production that are used intensively in the production of import-competing goods (such as unskilled labour).

This redistribution of income can lead to the formation of ‘winners’ and ‘losers’ within a country, with those who have gained from trade (such as owners of export-oriented firms) being considered ‘winners’ and those who have lost from trade (such as workers in import-competing industries) being considered, ‘losers’. However, it’s important to note that the overall gains from trade may be large enough to compensate those who have lost from trade, or the government may choose to implement policies that redistribute income to mitigate the negative effects of trade on certain groups.

It’s also worth noting that the effects of international trade on the income distribution within a country can be complex and depend on various factors. For example, trade’s effects on income distribution can vary across different industries and regions within a country. In addition, other economic and social policies may influence them.

In the case of trade between the United States and China, the owners of export-oriented firms in the United States (such as those producing goods for export to China) may have gained from the increase in international trade. In contrast, the owners of import-competing firms (such as those producing goods that compete with cheaper imports from China) may have lost. Similarly, workers in export-oriented industries in the United States may have benefited from the increase in international trade, while workers in import-competing industries may have been negatively affected.

It’s important to note that the effects of international trade on income distribution within each country can be complex and depend on various factors, including the specific industries and regions involved, and each country’s broader economic and social policies.

== Political implications ==

=== Sectorial conflict ===
Conflicts over trade policy may form along sectoral lines, with different industries having different interests in terms of trade policy. According to the Stolper-Samuelson theorem, international trade can lead to a redistribution of income within a country, with the owners of the factors of production that are used intensively in the production of export goods (such as capital or skilled labour) gaining at the expense of the owners of the factors of production that are used intensively in the production of import-competing goods (such as unskilled labour).

This income redistribution can lead to different industries having different interests in trade policy. For example, industries that use abundant factors of production (such as capital or skilled labour) intensively may favour free trade, as international trade can lead to increased demand for their products and higher profits. On the other hand, industries that use scarce factors of production (such as unskilled labour) intensively may favour protectionist measures, as international trade can lead to increased competition and lower profits.

It’s important to note that the relationship between an industry’s use of specific factors of production and its stance on trade policy is only sometimes straightforward and may be influenced by a variety of factors. Additionally, the overall gains from trade may be large enough to compensate those who have lost from trade, or the government may choose to implement policies that redistribute income to mitigate the negative effects of trade on certain groups.

=== Political Parties ===
Intra-party splits over trade policy may occur within political parties, as parties may represent voters in both export-oriented and import-competing sectors. According to the Stolper-Samuelson theorem, international trade can lead to a redistribution of income within a country, with the owners of the factors of production that are used intensively in the production of export goods (such as capital or skilled labour) gaining at the expense of the owners of the factors of production that are used intensively in the production of import-competing goods (such as unskilled labour).

This income redistribution can lead to different industries having different interests in trade policy, and political parties may represent voters in both export-oriented and import-competing sectors. For example, a political party may have constituents who support free trade and its benefits to export-oriented industries. On the other hand, they are concerned about the negative effects of trade on import-competing industries and favour protectionist measures.

As a result, there may be intra-party splits over trade policy, with some members of a political party advocating for free trade and others advocating for protectionist measures. This can make it difficult for parties to develop a clear and consistent partisan trade strategy, as they may need to balance the interests of different groups within their party.

=== Interest groups ===
Highly active sector-specific interest groups may engage in strong lobbying and campaigning efforts to influence trade policy. According to the Stolper-Samuelson theorem, international trade can lead to a redistribution of income within a country, with the owners of the factors of production that are used intensively in the production of export goods (such as capital or skilled labour) gaining at the expense of the owners of the factors of production that are used intensively in the production of import-competing goods (such as unskilled labour). This income redistribution can lead to different industries having different interests in trade policy, and interest groups representing specific sectors may engage in lobbying and campaigning efforts to influence trade policy in favour of their industry. For example, an interest group representing an export-oriented industry may lobby for free trade and the benefits it brings to their industry. In contrast, an interest group representing an import-competing industry may lobby for protectionist measures to safeguard their industry from foreign competition.

It’s important to note that the influence of interest groups on trade policy can vary depending on various factors, such as the strength and resources of the group, the broader political and economic context, and the specific issues at stake.

=== US trade policy in the 1930s ===
The Smoot-Hawley Tariff Act of 1930 was a piece of legislation that the United States Congress passed in an effort to protect domestic industries from foreign competition. The Act raised tariffs (import taxes) on a wide range of imported goods, including agricultural products, manufactured goods, and raw materials.

The Act was named after its sponsors, Representative Willis C. Hawley and Senator Reed Smoot, both of whom were members of the Republican Party. It was intended to boost the U.S. economy by protecting domestic industries and helping them to sell their products at higher prices. However, the Act was controversial at the time and has been the subject of much economic debate.

Some economists argue that the Smoot-Hawley Tariff Act contributed to the severity of the Great Depression, as it led to a spiral of protectionist measures by other countries and a decline in international trade. However, others have argued that the Act had a relatively small impact on the overall economy and that other factors, such as the collapse of the banking system and the Federal Reserve’s contractionary monetary policy, were more important in causing the Great Depression.

The Reciprocal Trade Agreements Act of 1934 (RTAA) was a piece of legislation that the United States Congress passed to reduce tariffs (import taxes) and promote international trade. The Act granted the President of the United States the authority to negotiate trade agreements with other countries and to reduce tariffs on a reciprocal basis (i.e., if one country reduced its tariffs, the other country would also reduce its tariffs).

The RTAA marked a shift in U.S. trade policy towards a more liberal, pro-trade stance, and it helped pave the way for the gradual dismantling of tariffs and other trade barriers in the United States and worldwide. The Act also established the principle of ‘most-favoured-nation’ treatment, which requires countries to extend the same tariff concessions to all of their trading partners.

The RTAA was a significant piece of legislation that helped to liberalise international trade and contributed to the growth of the global economy. In addition, it has been credited with helping to reduce tensions between countries and fostering a more cooperative approach to international trade.

The Smoot-Hawley Tariff Act of 1930 and the Reciprocal Trade Agreements Act of 1934 (RTAA) represent different approaches to trade policy in the United States. The Smoot-Hawley Tariff Act raised tariffs (import taxes) on a wide range of imported goods in an effort to protect domestic industries from foreign competition. In contrast, the RTAA marked a shift towards a more liberal, pro-trade stance and granted the President the authority to negotiate trade agreements with other countries and to reduce tariffs on a reciprocal basis.

The Smoot-Hawley Tariff Act and the RTAA reflect different views on the role of trade policy in the U.S. economy. The Smoot-Hawley Tariff Act was a protectionist measure intended to boost the U.S. economy by protecting domestic industries and helping them sell their products at higher prices. In contrast, the RTAA represented a more liberal approach to trade policy that aimed to reduce tariffs and promote international trade.

It’s worth noting that the Smoot-Hawley Tariff Act and the RTAA were both passed during economic difficulty in the United States, and both pieces of legislation intended to address specific economic challenges. However, the two Acts represent different approaches to trade policy and had different impacts on the U.S. economy and international trade.

In the context of trade policy, cleavage refers to the division or separation of different groups within a society or political system based on their interests or positions on trade issues. In the case of trade policy, cleavages may be based on sectoral conflict, with different industries having different interests in terms of trade policy.

Sectoral conflict refers to the idea that different industries within a society or political system may have competing interests on trade policy, with some industries supporting free trade and others supporting protectionist measures. For example, industries that use abundant factors of production (such as capital or skilled labour) intensively may favour free trade. In contrast, industries that use scarce factors of production (such as unskilled labour) intensively may favour protectionist measures.

Log rolling refers to exchanging political favours or support, often in the form of votes on specific issues, to achieve a mutually beneficial outcome. In the context of trade policy, log rolling may involve different industries or interest groups supporting or opposing specific trade measures in exchange for support on other issues.

Voting along narrow industry lines refers to the idea that individuals or groups may vote for or against specific trade measures based on the impact that those measures are expected to have on their specific industry or sector. For example, individuals or groups representing export-oriented industries may vote in favour of free trade measures, while those representing import-competing industries may vote against such measures.

During the 1930s, trade policy in the United States was characterized by significant cleavages, with different industries and interest groups taking different positions on trade issues. This was partly due to the economic challenges of the time and the different approaches to trade policy represented by the Smoot-Hawley Tariff Act of 1930 and the Reciprocal Trade Agreements Act of 1934 (RTAA).

Sectoral conflict was a key factor in shaping trade policy in the 1930s, as different industries had competing interests in terms of trade policy. For example, industries that used abundant factors of production (such as capital or skilled labour) intensively may have favoured free trade and the benefits it brought to their industries. In contrast, industries that used scarce factors of production (such as unskilled labour) intensively may have favoured protectionist measures to safeguard their industries from foreign competition.

Log rolling also shaped trade policy in the 1930s, as different industries and interest groups exchanged political favours or support to achieve their preferred outcomes on trade issues. For example, industries that supported free trade may have supported protectionist measures favoured by other industries in exchange for support on free trade measures.

Voting along narrow industry lines was also a factor in shaping trade policy in the 1930s. Individuals and groups representing specific industries voted for or against specific trade measures based on the impact those measures were expected to have on their industries. For example, individuals or groups representing export-oriented industries may have voted in favour of free trade measures, while those representing import-competing industries may have voted against such measures.

During the 1930s, political conflict over trade policy significantly shaped trade policy in the United States. This was partly due to the economic challenges of the time and the different approaches to trade policy represented by the Smoot-Hawley Tariff Act of 1930 and the Reciprocal Trade Agreements Act of 1934 (RTAA).

The Smoot-Hawley Tariff Act of 1930 was a protectionist measure that raised tariffs (import taxes) on a wide range of imported goods to protect domestic industries from foreign competition. The Act was controversial and was opposed by many businesses and trade groups, particularly those that relied on imports or exported to countries that raised tariffs in response to the Act. The Act was also opposed by some members of the Democratic Party and was supported by members of the Republican Party.

In contrast, the RTAA of 1934 marked a shift towards a more liberal, pro-trade stance and granted the President the authority to negotiate trade agreements with other countries and to reduce tariffs on a reciprocal basis. As a result, the Act was supported by many businesses and trade groups, particularly those that relied on exports or imported intermediate goods for their production processes. The Act was also supported by some members of the Republican Party and was opposed by some members of the Democratic Party.

= Evaluation =

== Reconciling the models ==
In economics, the factor model refers to a framework that emphasises the role of factors of production (such as labour and capital) in the economy. This model assumes that factors of production are highly mobile, meaning that they can easily move between different sectors of the economy in response to changes in demand or supply. The factor model is often contrasted with the sector model, which emphasises the importance of specific sectors or industries in the economy. The sector model assumes that factors of production are highly specific, meaning that they are tied to particular sectors or industries and are less likely to move between sectors.

The assumptions of high inter-sectorial factor mobility and high factor specificity can have important implications for economic policy and the distribution of economic benefits. For example, suppose factors of production are highly mobile. In that case, policies that seek to promote or protect specific sectors or industries may be less effective, as factors of production may simply move to other sectors. On the other hand, if factors of production are highly specific, then policies that seek to promote or protect specific sectors or industries may be more effective, as factors of production may be less likely to move to other sectors.

her words, factors of production can be more or less mobile, depending on a range of economic, technological, and political conditions.

Some of the key factors that can affect factor mobility include:

# Regulation: Government regulations can make it more or less difficult for factors of production to move between sectors. For example, strict labour regulations or complex tax systems can make it difficult for workers to switch industries, while relaxed regulations may make it easier for them to do so.
# Transportation: The ease of transportation can also affect factor mobility. Factors of production that are difficult to transport, such as specialised machinery or raw materials, may be more tied to specific sectors or locations. On the other hand, factors that are easy to transport, such as labour and capital, may be more mobile.
# Industry-specific machinery and skills: Factors of production that are specialised for particular industries or sectors may be less mobile than those that are more general. For example, workers with specific skills or knowledge may be more likely to stay in a particular industry, while those with more general skills may be more likely to move between industries.

Factor mobility is affected by a range of economic, technological, and political conditions, and it is important to consider these factors when analysing the mobility of factors of production in the economy.

One way to measure the mobility of factors of production is to look at the variation in their rate of return across sectors. The rate of return for a factor of production refers to the return that it generates for its owner, such as wages for labour or profits for capital. If the rate of return for a factor varies significantly across sectors, this suggests that the factor is relatively immobile and is tied to particular sectors or industries. On the other hand, if the rate of return for a factor is relatively constant across sectors, this suggests that the factor is more mobile and is able to move between sectors in response to changes in demand or supply.

For example, if wages for labour vary significantly across sectors, this suggests that labour is relatively immobile and is tied to particular sectors or industries. On the other hand, if wages are relatively constant across sectors, this suggests that labour is more mobile and is able to move between sectors in response to changes in demand or supply. Similarly, if profits for capital vary significantly across sectors, this suggests that capital is relatively immobile, while constant profits suggest greater mobility.

If there is a low level of factor mobility in an economy, this can lead to the formation of industry coalitions among firms and workers within specific sectors or industries. These coalitions may seek to influence government policy to promote their members’ interests. This can affect political parties and peak associations, which may become divided over trade issues and adopt ambiguous policy positions to accommodate the diverse interests of their constituents.

For industry groups, low-factor mobility can have several implications. First, it may make it easier for firms and workers within a particular sector or industry to organise and advocate for their interests. However, it can also lead to a narrow focus on the interests of the specific sector or industry, rather than on the broader interests of the economy as a whole. This can create conflicts of interest and lead to trade disputes or other policy conflicts. Additionally, low-factor mobility may make it more difficult for firms and workers to adapt to changing economic conditions, as they may be more tied to specific sectors or industries. This can limit the ability of the economy to respond to changing market conditions and may lead to economic inefficiencies.

A high level of factor mobility in an economy can lead to greater flexibility and adaptability in the labour market and the economy as a whole. Factors of production, such as labour and capital, will be able to move more easily between sectors in response to changes in demand or supply. This can help to promote economic efficiency and stability, as the economy will be better able to respond to changing market conditions.

For firms, high-factor mobility can also provide greater access to a larger pool of workers and capital, as these factors will be more readily available across sectors. This can help firms to access the skills and resources they need to succeed in the global marketplace. However, high-factor mobility can also create challenges for firms. They may face more competition for workers and capital and may have to adapt to changing labour and capital markets.

== The US example ==
=== 1815-1869 ===
From 1815 through 1869, the United States underwent significant economic, social, and political changes. During this time, the country underwent rapid industrialisation, which led to the growth of manufacturing and the development of new technologies. As a result, the abundance of land and scarcity of capital and labour would have significantly impacted the formation of class-based parties and associations and industry groups.

One of the key factors that influenced the development of class-based parties and associations during this time was the growth of urbanisation and industrialisation. As more people moved from rural areas to cities in search of work, they began to form labour unions and other organisations to protect their interests and advocate for better working conditions. These organisations often aligned with political parties that supported their goals, such as the Democratic Party, which was more sympathetic to the concerns of working people.

Industry groups were also formed during this time as a way for businesses to coordinate their efforts and advocate for their interests. These groups often had close ties to political parties and sought to influence policy decisions that would benefit their industries.

The factor endowments of abundant land, scarce capital and labour, and low mobility during this period would have had a significant impact on the development of class-based parties and associations, as well as industry groups, as people and businesses sought to protect their interests and advance their goals in a rapidly changing economic and political environment.

=== 1870-1914 ===
From 1870 to 1914, the United States continued to experience significant economic, social, and political changes. Industrialisation continued to be a driving force, and the country experienced rapid growth and development. However, the factor endowments of the time were still characterized by abundant land and scarce capital and labour, although mobility had increased somewhat as transportation and communication technologies improved.

During this time, class-based parties and associations continued to play a significant role in American political and social life. Labour unions and other organisations representing the interests of working people became more prominent and influential, and they often aligned with political parties that supported their goals. The Republican Party, in particular, was seen as more sympathetic to business and industry concerns. At the same time, the Democratic Party was more closely aligned with labour and other working-class interests.

Industry groups also remained important during this period, as businesses sought to coordinate their efforts and advocate for their interests. These groups often had close ties to political parties and worked to influence policy decisions that would benefit their industries.

The factor endowments of abundant land, scarce capital and labour, and increased mobility during this time period would have significantly impacted the development of class-based parties and associations, as well as industry groups, as people and businesses continued to navigate the rapidly changing economic and political landscape.

=== 1919-1939 ===
From 1945 to 1994, the United States experienced significant economic, social, and political changes. The country emerged from World War II as a global economic superpower, and the economy grew rapidly during this period. However, the factor endowments of the period were still characterized by abundant land and scarce capital and labour. However, mobility increased significantly as transportation and communication technologies continued to improve.

During this time, class-based parties and associations played a significant role in American political and social life. Labour unions and other organisations representing the interests of working people became more prominent and influential, and they often aligned with political parties that supported their goals. The Republican Party, in particular, was seen as more sympathetic to business and industry concerns. At the same time, the Democratic Party was more closely aligned with labour and other working-class interests.

Industry groups also remained important during this period, as businesses sought to coordinate their efforts and advocate for their interests. These groups often had close ties to political parties and worked to influence policy decisions that would benefit their industries.

Overall, the factor endowments of abundant land, scarce capital and labour, and increased mobility during this period would have had a significant impact on the development of class-based parties and associations, as well as industry groups, as people and businesses continued to navigate the rapidly changing economic and political landscape.

=== 1945-1994 ===
From 1945 to 1994, the United States experienced significant economic, social, and political changes. The country emerged from World War II as a global economic superpower, and the economy grew rapidly during this period. The factor endowments of the time period were still characterized by abundant land and scarce capital and labour. However, mobility had increased significantly as transportation and communication technologies continued to improve. During this time, class-based parties and associations continued to play a significant role in American political and social life. Labour unions and other organisations representing the interests of working people became more prominent and influential, and they often aligned with political parties that supported their goals. The Republican Party, in particular, was seen as more sympathetic to business and industry concerns. At the same time, the Democratic Party was more closely aligned with labour and other working-class interests.

Industry groups also remained important during this period, as businesses sought to coordinate their efforts and advocate for their interests. These groups often had close ties to political parties and worked to influence policy decisions that would benefit their industries.

Overall, the factor endowments of abundant land, scarce capital and labour, and increased mobility during this period would have had a significant impact on the development of class-based parties and associations, as well as industry groups, as people and businesses continued to navigate the rapidly changing economic and political landscape.

== Electoral consequences ==
=== Individual voters attitudes ===
Empirical testing of the factor model and the sector model can be done by analysing data on wages and education (for the factor model) and sector tariffs and exports (for the sector model). In the factor model, the factors of production (such as labour and capital) are the main determinants of trade. The model predicts that countries will specialise in intensively producing goods and services that use their abundant factors. For example, if a country has a relatively high supply of educated workers, it may specialise in producing knowledge-intensive goods and services. To test the factor model, economists can analyse data on wages and education levels in different countries to see whether they are correlated with the types of goods and services that countries produce.

In the sector model, the focus is on specific industries or sectors within an economy. The model predicts that countries will specialise in the production of goods and services in which they have a comparative advantage based on factors such as natural resources, technological capabilities, and market demand. To test the sector model, economists can analyse sector tariffs and export data to see whether countries specialise in producing specific goods and services.

Both models can provide useful insights into the patterns of trade and specialisation that we see in the global economy, and empirical testing can help to determine which model best explains the data. However, it is also possible that both models may be applicable in different contexts and that a combination of the two may be needed to understand the underlying drivers of trade fully.

Individuals may have different reasons for supporting or opposing new protectionist measures, such as trade barriers or tariffs. For example, some may support protectionist measures because they believe they will help protect domestic industries and jobs from foreign competition. Others may oppose protectionist measures because they believe it will lead to higher prices for consumers or because they believe in the benefits of free trade and globalisation.

Ultimately, the decision of whether to support or oppose new protectionist measures will depend on an individual’s values and priorities, as well as their assessment of the likely consequences of such measures for different groups within society. It may also depend on the specific details of the protectionist measures being considered and the context in which they are being proposed.

It is not uncommon for individuals with lower skills or education levels to be more supportive of trade barriers. They may feel threatened by foreign competition and believe that protectionist measures will help protect their jobs and industries. However, empirical research suggests that the relationship between education or skill level and support for trade barriers is sometimes complicated.

For example, a study published in the Journal of International Economics found that individuals with lower education levels were more likely to support trade barriers in countries where trade benefits were concentrated among a small group of people. In contrast, those with higher education levels were more likely to support trade barriers in countries where trade benefits were more evenly distributed.

Research has also shown that employment in industries more exposed to trade is not always a strong predictor of support for trade barriers. Other factors, such as political ideology, party affiliation, and the overall economic conditions in a country, can also play a role in shaping an individual’s views on trade.

An individual’s asset values, such as home ownership, may be related to their views on trade and support for trade barriers. For example, research has shown that individuals who own homes in counties with a manufacturing mix concentrated in comparative disadvantage industries (i.e. industries in which the country does not have a comparative advantage) may be more likely to support trade barriers. This may be because they are more directly affected by the impacts of trade on their local economy and feel that protectionist measures could help to protect their economic interests.

However, it is important to note that other factors, such as education levels, income, and political ideology, can also influence an individual’s views on trade and support for trade barriers. Additionally, the relationship between asset values and support for trade barriers will likely vary depending on the specific context and the details of the trade policies being considered.

=== Economic self-interest and role of knowledge ===
Economic self-interest is a person's desire to maximize their own economic well-being or gain. This can be a powerful motivator in shaping an individual's views on trade and support for trade policies. For example, an individual who is employed in an industry that is heavily exposed to foreign competition may be more likely to support trade barriers if they believe it will help to protect their job or industry. On the other hand, an individual who stands to benefit from lower prices or increased access to foreign goods and services may be more likely to oppose trade barriers. The role of knowledge can also play a role in shaping an individual's views on trade. For example, an individual who is more knowledgeable about the potential benefits and costs of trade may be more likely to take a nuanced view of trade policies rather than to support or oppose them based on economic self-interest alone. Likewise, an individual well-informed about the complex economic and social factors at play may be more likely to consider the trade-offs involved and weigh the potential costs and benefits of different policies.

Increasing knowledge about trade and its potential impacts may lead individuals to align their preferences more closely with their economic self-interest. For example, an individual who is more knowledgeable about the potential benefits of trade may be more likely to support free trade policies if they benefit from lower prices or increased access to foreign goods and services. Similarly, an individual who is more knowledgeable about the potential costs of trade, such as job loss or wage stagnation in certain industries, may be more likely to support trade barriers if they feel that their economic interests would be threatened by foreign competition.

However, it is important to note that other factors, such as political ideology, values, and social norms, can also influence an individual's views on trade and support for trade policies. An individual's level of trade knowledge may not be the only determinant of their preferences, and other considerations may also influence their views. Additionally, the relationship between knowledge and preference may vary depending on the specific context and the details of the trade policies being considered.

The Stolper-Samuelson theorem is a key result in the theory of international trade that describes the distributional consequences of trade. It states that trade liberalization (i.e. the removal of trade barriers such as tariffs or quotas) will increase the price of the imported good, which will benefit domestic producers of that good. But, at the same time, the increased price will lead to a decrease in the demand for the domestic good, harming domestic producers of that good.

Overall, the Stolper-Samuelson theorem suggests that trade liberalization can have different impacts on different groups within a society, depending on the relative abundance of the factors of production (such as labour and capital) used in different industries. For example, in a country where labour is relatively abundant and capital is relatively scarce, trade liberalization may lead to higher wages for workers in the importing sector and lower wages for workers in the exporting sector.

Suppose individuals have trade beliefs that align with the Stolper-Samuelson theorem. In that case, they may view trade liberalization differently depending on their position in the economy and the relative abundance of the factors of production they use. For example, an individual who is employed in a sector that uses relatively abundant factors of production (such as labour) may be more likely to support trade liberalization. In contrast, an individual who is employed in a sector that uses relatively scarce factors of production (such as capital) may be more likely to oppose it.

=== Trade and presidential votes ===
Trade policy can be an important factor in presidential elections, as it can affect the economic well-being of different groups within a society. For example, trade liberalization may lead to increased access to foreign goods and services, which can benefit consumers by lowering prices. At the same time, trade liberalization may lead to job loss or wage stagnation in certain industries, harming workers and their families. As a result, trade policy can be a divisive issue in presidential elections, with different candidates offering different approaches to trade. For example, some candidates may support free trade and globalization, while others may advocate for protectionist measures such as tariffs or trade barriers.

In general, the impact of trade policy on presidential votes will depend on the specific context and the details of the proposed trade policies. It may also depend on the relative importance of trade policy compared to other issues, such as healthcare, education, and taxation. Additionally, the preferences of different voter groups, such as workers, consumers, and business owners, may also influence the presidential vote.

Trade-related job insecurity may lead to reduced support for incumbents or candidates who are currently in office. Job insecurity refers to the uncertainty or risk that an individual may lose their job due to economic or other factors. If individuals feel that trade policies contribute to job insecurity in their industry, they may be more likely to support candidates who promise to address these concerns.

However, it is important to note that other factors may also influence an individual's support for incumbents. For example, an individual's overall economic well-being, satisfaction with public services, and views on other issues such as healthcare and education may also shape their voting decisions. Additionally, the relationship between trade-related job insecurity and support for incumbents may vary depending on the specific context and the details of the trade policies being considered.

Job insecurity is generally lower in industries that produce high-skilled services and goods and higher in industries that produce low-skilled manufacturing.

High-skilled service industries, such as professional services (e.g. legal, consulting), finance, and healthcare, tend to have lower levels of job insecurity because the demand for these services tends to be more stable and less sensitive to economic fluctuations. Additionally, workers in these industries tend to have higher levels of education and specialized skills, making them more valuable to employers and less vulnerable to job loss.

On the other hand, low-skilled manufacturing industries, such as textiles, clothing, and furniture, tend to have higher levels of job insecurity because the demand for these goods is more sensitive to economic fluctuations and changes in consumer preferences. Additionally, workers in these industries tend to have lower levels of education and specialized skills, making them more vulnerable to job loss.

It is important to note that these generalizations may not hold true in all cases, and the level of job insecurity in a particular industry may depend on a range of factors, including the overall economic conditions, technological changes, and competition from foreign firms.

Individuals who feel they have lost out due to trade liberalization or globalization may demand compensation, align with left-leaning political parties, or vote against incumbents.

Trade liberalization and globalization can have different impacts on different groups within a society, depending on the relative abundance of the factors of production (such as labour and capital) used in different industries. For example, in a country where labour is relatively abundant and capital is relatively scarce, trade liberalization may lead to higher wages for workers in the importing sector and lower wages for workers in the exporting sector. Workers in the exporting sector who feel that they have lost out due to trade liberalization may demand compensation and align with left-leaning parties or vote against incumbents to protect their economic interests.

It is important to note that this relationship may not hold true in all cases. A range of other factors, such as overall economic conditions, individual characteristics, and views on other issues, may influence the demand for compensation and political realignment. Additionally, the relationship may vary over time and across different geographical regions.

== Other electoral effects ==

= Conclusion =