Keynes’s High Tariff Policy, 1929–1931

This paper examines historical context which underlies J. M. Keynes’s advocacy of high-tariff policies from 1929 to 1931 and his subsequent abandonment of this stance. Keynes began supporting high-tariff policies in December 1929 to aim for full employment within the constraints of a balance of payments. However, his support did not last long; by September 1931, he had distanced himself from high-tariff policies. Several factors contributed to this shift in approach. A significant factor was the UK’s decisive move toward protectionism from late 1931 to 1932, which triggered a global spread of protectionist measures. This shift influenced Keynes’s understanding of the reciprocity of tariff policies, making him realize that it would be difficult for the UK to adopt high-tariff policies without facing retaliation from other countries. This change in Keynes’s perspective can be seen within the context of the traditional doctrine of “unilateralism” in British free trade from the 19th century to the early 20th century. Keynes’s views changed regarding the impracticality of the tariff system as a short-term measure.