ABSTRACT
This chapter explains the cyclical patterns seen so far by returning to the central analytic question of why nations select the foreign economic policies they do. It explains the retreat from pure liberalism in Britain is explained in terms that provide the lessons needed to understand contemporary instances of the competition between free trade and protectionism. They found it in the form of government regulation driven by increasing political power for the working class and informed by an economic and social theory—socialism—whose vision of economic life directly opposed that of economic liberalism. Together with the declining political importance of landowners that resulted from the declining economic importance of agriculture, this development marked the beginning of a new era in British politics. European protectionism against the onslaught of competitive American firms had been building for years; the Smoot-Hawley Tariff, enacted by the United States in 1930, overwhelmed the last supporters of liberalism even in Britain.
