Post Hoc Ergo Propter Hoc?
This week’s column features a small history lesson. I went to high school at a time and place where most of the students studied Latin for two years before moving on to a related modern language like French or Spanish. I thought Latin was dead and went straight to classes in a modern language. Years later, I still think that was the right decision, but I have come to appreciate Latin as both the base for much of English and also for words and phrases that have enriched our vocabularies and ways of thinking for more than 2,000 years.
One such phrase is “post hoc ergo propter hoc,” which means, “after this, therefore because of this.” Classical Greek and Roman philosophers considered this a fallacy, assigning causality to a coincidence of timing. Just because A happened before B does not mean A caused B.
I was reminded of the “post hoc” fallacy last week as I read about the latest cleanup attempt by former president Donald Trump’s advisers to justify his tariff proposals. Their new story picks up on the former president’s expressed admiration for President William McKinley, a high tariff man like all Republican presidents in the nineteenth century and argues that the United States grew fastest in the second half of that century and that the growth was enabled by the high tariffs of the time.
Former U.S. Trade Representative Robert Lighthizer summed up the argument in a letter to the Wall Street Journal responding to criticism of Trump’s tariff proposals:
[D]uring this great period of economic growth, when America created the largest economy in the world from the end of the Civil War until 1900, the average tariffs in this country were almost always above 40% on dutiable goods,” Lighthizer wrote. He added that even if the tariffs fell “from time to time,” they fell from about 50 percent to about 40 percent, remaining “around 10 times current tariff levels.
Also during this period, the U.S. almost always ran giant trade surpluses and large fiscal surpluses. We became wealthier,” Lighthizer added. “In short, tariffs were a great success, exactly as Mr. Trump claims.
On the other side, one of the country’s most prominent trade economists, Douglas Irwin, has written in depth on the relationship between tariffs and growth in the nineteenth century and drew a different conclusion:
Those having a favourable impression of the tariff’s contribution [to growth] have tended to present statistics that overstate late nineteenth century US growth in comparison to other periods and countries. The data presented here indicate that growth then was driven largely by labour force expansion and capital accumulation, while productivity growth was undistinguished when put in a comparative perspective. It is difficult to attribute much of a positive role for the tariff because import tariffs probably raised the price of imported capital goods, thereby discouraging capital accumulation. Furthermore, productivity growth in non-traded sectors, rather than in manufacturing, was the driving force behind the United States’s overtaking of the United Kingdom in per capita GDP during this period. The paper concludes that trade protection was probably not a key factor behind US economic growth in the late nineteenth century.
Much has been written about this, and those who want to delve into it more deeply can easily find more detailed discussions. This argument will probably never be settled because determining causality among multiple variables is always difficult. The incontrovertible fact is that two things happened at the same time—high tariffs and economic growth (punctuated by several panics). The post hoc fallacy assumes that one caused the other. I think the weight of evidence, as summarized in Irwin’s quote above, shows that belief is false.
This debate reminds me of one of my favorite cartoons, where the boss comments that forecasts are always wrong because you can’t predict the future, so if you’re going to be wrong anyway, you might as well be wrong in a way that helps you in the short run. (Not a CSIS principle, by the way.) In the tariff case, Trump’s supporters are trying to predict the future by reinterpreting the past, and they are seizing on the interpretation that supports their point of view.
There are actually two fallacies here. The first is the post hoc fallacy that assumes nineteenth-century growth was caused by high tariffs. The second is that the future will inevitably repeat their version of the past. There is also an irony that Trump’s supporters do not want to address: much of the nineteenth-century growth was due to a high level of immigration that made available a large number of workers, which is anathema to the Trump campaign.
The interesting thing about this debate is that it has moved out of academia and into public discourse, driven by Trump’s tariff proposals. It is also interesting that tariff proponents apparently feel a need to defend their position. This is probably a realization that the public is increasingly skeptical of Trump’s frequent assertions that tariffs are a wonderful tool, and other foreign countries pay them rather than U.S. consumers. Mounting a defense at this point is a sign of weakness, and relying on a fallacy weakens the argument further, which gives me some hope that we may finally be getting to a more informed trade debate.
William Reinsch holds the Scholl Chair in International Business at the Center for Strategic and International Studies in Washington, D.C.