In Ferris Beuller’s
Day Off, actor, comedian Ben Stein plays the part of a History Teacher
droning on about the Smoot-Hawley tariff of 1930. The function of the scene in
the movie is to make it clear that when Ferris Beuller decides to skip school
for a day of frolicking, he misses nothing of any importance whatsoever. I
confess, as a history teacher myself, the scene is both hilariously funny and
tear-jerkingly sad at the same time. It is painful to watch one’s profession
roasted so effectively on the spit of a good caricature. But it makes one want
to rise to the challenge and show people that in actuality, the Smoot-Hawley
tariff bill could be taught in such a way
as to enlighten high school students about important issues relating to
their lives and futures.
In essence, the Smoot-Hawley Tariff story is a classic tale
in American economics and civics. It has antecedents back to the days of
Alexander Hamilton and Thomas Jefferson (if not further) who battled over the
question of Federal economic support for certain sectors of the economy.
Hamilton had argued that the country would be best served if its economic elites
were made the primary concern of Federal economic policy. Hamilton had a vision
for an America that could rival Europe in the manufacture of goods. His
policies leaned towards the support of business interests and manufacturing
interests and urban interests at the expense of rural interests, agricultural
interests, and the interests of the common unskilled laborer. Hamilton was not
a “No child Left Behind” sort of guy. He was an “Every Talented Elite Gets Ahead”
sort of guy. Thus, he argued for the creation of a National Bank that could
loan money to powerful business interests. He also argued for a tax on whiskey,
a commodity that Western farmers made heavy use of as it was a primary way of
converting crops into something that could be transported and sold even over
bad roads for cash. In short, the blue
collar workers would work to fund the projects of the white collar workers.
The argument between Hamilton and Jefferson over some of
these issues was essentially an argument about competing visions of America.
And it is not an argument that is foreign to us today. Are we better off as a
country when our resources are invested in each person equally? Or should we
invest more heavily in some? either the most talented, bright, and ambitious OR
conversely, the least talented,
bright, and ambitious? Should we identify certain sectors of the economy to
favor with public largesse or public bailouts and others to tax more heavily
and regulate more heavily? Should we, for example support agriculture with
subsidies and then tax corporations with confiscatory tax rates? Should
airlines and banks get bailouts? Should manufacturing get protection from
foreign competition? Should Walmart be allowed to provide consumers with low
cost goods at the expense of American manufacturing wages?
The Smoot Hawley Tariff question sits smack dab in the
middle of this debate and what it should say to a high school student is that
those who control the rules under which economic decisions are made will, in
most cases, control the economic benefits of the workforce’s labor. Representatives
Reed Smoot from Utah and W.C. Hawley from Oregon created this measure
originally to protect American farmers from global competition but once the Pandora’s
Box of protectionism was in the air, many other Republican business interests
saw a means by which they could protect their own industries from competition.
By the time the bill was passed, rates on imports for thousands of items were
raised like drawbridges to protect industries from low-paid foreign labor. The
notion was somewhat simplistic in many ways. It pretended that the countries
that were affected by such high tariffs would not retaliate by putting high
tariffs on American exports. This was delusional thinking as was soon to be
discovered. Dozens of countries simply responded by saying “If you are not going
to let our companies sell in America in a fair fight for market share, we are
not going to let your companies sell in our countries in a fair fight for
market share.” A recent TIMES magazine article puts it this way:
Though some legislators today might
be reluctant to make such a promise, no one in Congress is seriously proposing
anything as drastic as Smoot-Hawley. Still, the pro-tariff mania that swept
Washington 55 years ago remains a danger. "What we are afraid of,"
says S. Bruce Smart, Under Secretary of Commerce for International Trade,
"is that people are so emotional that they will do something that they
know is foolish, just to do something."
http://205.188.238.109/time/magazine/article/0,9171,960038,00.html
The Smoot Hawley Tariff then can be used as a great example
of how democracies can often make knee-jerk short term emotional decisions
without thinking through their long term consequences. In 1929 and 1930,
business interests had almost completely taken over the American democratic
system, using power and money to buy candidates and influence. The Smoot-Hawley
tariff was packaged as a measure to protect American jobs but in all honesty,
given the way that companies were failing to distribute profits to the workers,
it was a measure that would line the pockets of business owners in the short
term but cost jobs in the long term. It was also a measure that frankly
inhibited the ability of the American economy to move its human resources into
more lucrative areas of money making. Loosing one’s job to foreign competition
is painful but at some point in time, it is this pain that causes workers to
get higher order skills and the children of those workers to prepare for jobs
of the future and not the past. Smoot Hawley protected American schools from
having to make a transition to a system of education that would have prepared
students for better jobs than their parents had.
Had I been teaching Ferris Beuller’s class on the
Hawley-Smoot Teriff Bill, I would have brought in the movie Life and Debt about how the Jamaican
economy is being affected by IMF anti-protectionist tariff policies and we
would have had a good debate about whether or not globalization – the distribution
of different economic niches to different parts of an increasingly
interdependent world is a good idea or a bad idea. Should Jamaican farmers give
up growing their own onions and producing their own milk so that their farms
can be better converted into resort hotels for wealthy Americans?
I might have brought in the documentary American Jobs and looked at how people who are not thinking ahead
about global market issues get themselves dependent on jobs that are bound to
be moved elsewhere in a global economy that allows business to travel to
regions of desperation in search of lower labor costs. In 1930, business
interests were pro-protectionism because the factories were located here. In
today’s economy, this is often opposite because the factories have been located
elsewhere.
We might have watched a documentary on how the government’s
intervention in the affairs of the agricultural economy or the economics of the
transportation industry or its willingness to subsidize the energy industry’s
need for global protection are affecting food prices, food quality, local
farming communities, access to prescription drugs, airfares, technological
innovation in auto fuel efficiency, and other similar issues of significant
concern. We might have watched some excerpts from the debate about NAFTA that
politicians fifteen years ago were engaged in and then examined the results of
its passing.
Ultimately, students would leave the class with a better
understanding of the dangers of taking a Ferris
Beuller’s Day Off on election day. We would look at how business interests
had managed to take over the Coolidge and Hoover Administrations and how lack
of voter turnout in the 18-24 year old age demographic today is amounting to a
type of economic serfdom by negligence. Clearly, when the government decides to
borrow money instead of raise taxes, it is voting to tax a future generation
that either cannot or simply does not care to vote. In some
ways, Hamilton and Jefferson’s conflict has become generational in American
society as the government leans in favor of those who are voting now and takes
that pound of flesh from those who are either not old enough to vote or not
interested enough in politics to vote. There is a reason why prescription drugs
of the elderly will be getting huge infusions of Federal dollars while Federal
funding for college tuition decreases. And it has to do with the tens of
thousands and millions of 18-24 year olds that think Ferris Beuller is cool for
skipping classes about meaningless topics like the Smoot-Hawley Tariff.
In the end, the joke’s on Ferris because while he is joy
riding around in his friend’s father’s 1961 Ferrari
250 GT California, he is NOT learning that the Italian car manufacturer,
Enzo Ferrari started his company in the same year that the Smoot-Hawley Tariff
was being debated (1929). Ferris is NOT learning that American car
manufacturer, Henry Ford, personally went in and begged President Herbert
Hoover to veto the Smoot-Hawley Tariff, convinced
that the secret to getting out of the economic crisis was not to be found in initiating
trade wars but in paying workers higher wages. What Ferris does not know is
that in a country dedicated to high trade barriers, it would have been
impossible for his friend’s dad to own a Ferrari and that if Ferris expects to
work for profit in a global economy, he will have to realize the importance of
trust in developing markets and suppliers. He will soon discover that hacking
into a school computer to change his grades is a good short term solution to a
problem but it is not an offense that an international business partner will
forgive soon if he begins to apply similar strategies to his business dealings.
Francis Fukuyama argues in his book Trust: The Social Virtues and the Creation of Prosperity,
published a decade after Ferris Beuller’s Day Off came out, that unethical
individualism of the sort that Ferris glorifies, is toxic to prosperous
economies. As one commentator at Amazon puts it:
“Fukuyama
examines the impact of culture on economic life, society, and success in the
new global economy. He argues that the most pervasive cultural characteristic
influencing a nation's prosperity and ability to compete is the level of trust
or cooperative behavior based upon shared norms. In comparison with low-trust
societies (China, France, Italy, Korea), which need to negotiate and often
litigate rules and regulations, high-trust societies like those in Germany and
Japan are able to develop innovative organizations and hold down the cost of
doing business. Fukuyama argues that the United States, like Japan and Germany,
has been a high-trust society historically but that this status has eroded in
recent years. This well-researched book provides a fresh, new perspective on
how economic prosperity is grounded in social life.”
In other words, it may well be Ferris’ approach to basic
virtues like honesty, integrity, thrift, and work ethic that will make it
impossible for someone in his generation to make the kind of money it takes to
own a Ferrari. That said, it may ALSO be Ferris' disdain for tradition and his essential creative audacity that makes him millions. It would make for an interesting debate.
I suspect that someday, a good sequel to Ferris Beuller’s Day Off might be a
movie entitled The Day After Ferris
Beuller’s Day Off. And in that movie, it would be interesting to see a good
history teacher teaching a class on NAFTA. Grin.
There. I have laid down the gauntlet.
Question for Comment: I often say that a good history class is a critical thinking class that uses History as a Medium. Have you ever taken such a class?
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