American Political Science Review Vol.96,No.3 September 2002 Commerce,Coalitions,and Factor Mobility:Evidence from Congressional Votes on Trade Legislation MICHAEL J.HISCOX Harvard University The extent to which political conflict over U.S.trade policy has led to clashes between broad- based class coalitions has varied significantly over time during the past two centuries.I argue that much of this variation can be explained by changes in economywide levels of interindustry factor mobility.Class distinctions between voters are more economically and politically salient when interindustry mobility is high;when mobility is low,industry distinctions become more critical and tend to split apart broader political coalitions.I report evidence indicating large changes in levels of labor and capital mobility over the last two centuries.These changes coincide with significant shifts in the character of American trade politics.Analysis of congressional voting on 30 major pieces of trade legislation between 1824 and 1994 provides evidence of large swings in coalition patterns. istory has shown that international trade can create class antagonisms and yet also affect the relative generate intense class conflict,pitting capital fortunes of different industries.What is at issue is the against labor,or farmers against industry,and definition of the basic building blocks of political econ- making the tariff the central policy issue in electoral omy:the alignment of preferences that creates political competition between political parties.In the United coalitions. States,at the turn of the twentieth century,the trade is- I argue here that variation in coalition patterns can be sue did ignite a fierce political contest between protrade explained in large measure by changes in economywide farmers and protectionist urban interests,and the tariff levels of interindustry factor mobility:that is,the ease became the focal point for the parties in virtually every with which owners of factors of production(land,labor, election fought between 1888 and 1914.But this type and capital)can move between industries.Class distinc- of intense class warfare was not the norm in American tions between voters are more economically and polit- trade politics prior to the Civil War,when battles over ically salient when interindustry mobility is high;when policy were dominated by regionally specific,industry- mobility is low,industry distinctions become more crit- based groups (Pincus 1977),nor has it continued in ical and tend to split apart broader political coalitions. more recent times,when policies have been shaped in I report evidence indicating large changes in levels of large measure by the lobbying efforts of industry asso- labor and capital mobility over the last two centuries ciations,labor unions,and political action committees. These changes coincide with significant shifts in the and the trade issue has all but vanished at election time character of American trade politics.Analysis of con- (Destler 1992). gressional voting on 30 major pieces of trade legisla- In what circumstances does international trade tion between 1824 and 1994 provides evidence of large deepen class cleavages in politics?When do narrower, swings in coalition patterns.The findings carry impor- industry-based coalitions tend to flourish instead?The tant implications for political-economic studies of eco- existing scholarly literature is largely silent on the ques- nomic policymaking in general,for the future direction tion and strangely polarized.While Rogowski(1989) of U.S.trade policy,for future economic growth,and for presents evidence that trade can create class divisions arguments in favor of adjustment assistance programs that are so fundamental that they can reshape entire po- that would raise levels of interindustry factor mobility. litical systems,much of the recent analysis of American trade politics follows Schattschneider(1935)in placing industry-based lobbies at center stage (Baldwin 1985; TRADE THEORY,COALITIONS AND Grossman and Helpman 1995).This division mirrors FACTOR MOBILITY a more fundamental divide between Marxist politi- According to the Stolper-Samuelson (1941)theorem. cal economy,in which all politics is class politics,and trade increases real returns for owners of the factor of pluralist-style approaches to American politics that fo- production with which the economy is relatively abun- cus on the activities of interest groups.Bridging the dantly endowed,while real returns for owners of the gap is vital for understanding the political-economic scarce factor decline.This result depends critically on origins of not only trade policy,but a vast range of the assumption that factors of production,while im- regulatory,industrial,and monetary policies that can mobile internationally,are perfectly mobile within the domestic economy.The logic is simple enough:In- creased trade lowers the price of the imported good. Michael J.Hiscox is John L.Loeb Associate Professor of the Social leading to a reduction in its domestic production and Sciences,Harvard University,Cambridge,MA 02138 (hiscox@fas. harvard.edu). I thank Jim Alt,Lawrence Broz,Jeff Frieden,Mike Gilligan,Peter 1 Factors are identified as broad categories of productive inputs and Gourevitch,David Lake,Lisa Martin,Ron Rogowski,Verity Smith, include at least labor and capital.Traditional studies focus on land and seminar participants at Harvard University,MIT,and UCSD for labor,and capital,though the case has been for subdividing these comments and suggestions. into narrower categories(Leamer 1984). 593American Political Science Review Vol. 96, No. 3 September 2002 Commerce, Coalitions, and Factor Mobility: Evidence from congressional Votes on Trade egisl la ti on- - MICHAEL J. HISCOX Harvard University he extent to which political conflict over U.S. trade policy has led to clashes between broad- Tbased class coalitions has varied significantly over time during the past two centuries. I argue that much of this variation can be explained by changes in economywide levels of interindustry factor mobility. Class distinctions between voters are more economically and politically salient when interindustry mobility is high; when mobility is low, industry distinctions become more critical and tend to split apart broader political coalitions. I report evidence indicating large changes in levels of labor and capital mobility over the last two centuries. These changes coincide with signiJicantshifts in the character of American trade politics. Analysis of congressional voting on 30 major pieces of trade legislation between 1824 and 1994 provides evidence of large swings in coalition patterns. History has shown that international trade can generate intense class conflict, pitting capital against labor, or farmers against industry, and making the tariff the central policy issue in electoral competition between political parties. In the United States, at the turn of the twentieth century, the trade is￾sue did ignite a fierce political contest between protrade farmers and protectionist urban interests, and the tariff became the focal point for the parties in virtually every election fought between 1888 and 1914. But this type of intense class warfare was not the norm in American trade politics prior to the Civil War, when battles over policy were dominated by regionally specific, industry￾based groups (Pincus 1977), nor has it continued in more recent times, when policies have been shaped in large measure by the lobbying efforts of industry asso￾ciations, labor unions, and political action committees, and the trade issue has all but vanished at election time (Destler 1992). In what circumstances does international trade deepen class cleavages in politics? When do narrower, industry-based coalitions tend to flourish instead? The existing scholarly literature is largely silent on the ques￾tion and strangely polarized. While Rogowski (1989) presents evidence that trade can create class divisions that are so fundamental that they can reshape entire po￾litical systems, much of the recent analysis of American trade politics follows Schattschneider (1935) in placing industry-based lobbies at center stage (Baldwin 1985; Grossman and Helpman 1995). This division mirrors a more fundamental divide between Marxist politi￾cal economy, in which all politics is class politics, and pluralist-style approaches to American politics that fo￾cus on the activities of interest groups. Bridging the gap is vital for understanding the political-economic origins of not only trade policy, but a vast range of regulatory, industrial, and monetary policies that can Michael J. Hiscox is John L. Loeb Associate Professor of the Social Sciences, Harvard University, Cambridge, MA 02138 (hiscox@fas. harvard.edu). I thank Jim Alt, Lawrence Broz, Jeff Frieden, Mike Gilligan, Peter Gourevitch, David Lake, Lisa Martin, Ron Rogowski, Verity Smith, and seminar participants at Harvard University, MIT, and UCSD for comments and suggestions. create class antagonisms and yet also affect the relative fortunes of different industries. What is at issue is the definition of the basic building blocks of political econ￾omy: the alignment of preferences that creates political coalitions. I argue here that variation in coalition patterns can be explained in large measure by changes in economywide levels of interindustry factor mobility: that is, the ease with which owners of factors of production (land, labor, and capital) can move between industries. Class distinc￾tions between voters are more economically and polit￾ically salient when interindustry mobility is high; when mobility is low, industry distinctions become more crit￾ical and tend to split apart broader political coalitions. I report evidence indicating large changes in levels of labor and capital mobility over the last two centuries. These changes coincide with significant shifts in the character of American trade politics. Analysis of con￾gressional voting on 30 major pieces of trade legisla￾tion between 1824 and 1994 provides evidence of large swings in coalition patterns. The findings carry impor￾tant implications for political-economic studies of eco￾nomic policymaking in general, for the future direction of U.S. trade policy, for future economic growth, and for arguments in favor of adjustment assistance programs that would raise levels of interindustry factor mobility. TRADE THEORY, COALITIONS AND FACTOR MOBILITY According to the Stolper-Samuelson (1941) theorem, trade increases real returns for owners of the factor of production with which the economy is relatively abun￾dantly endowed, while real returns for owners of the scarce factor decline. This result depends critically on the assumption that factors of production, while im￾mobile internationally, are perfectly mobile within the domestic economy.' The logic is simple enough: In￾creased trade lowers the price of the imported good, leading to a reduction in its domestic production and Factors are identified as broad categories of productive inputs and include at least labor and capital. Traditional studies focus on land, labor, and capital, though the case has been for subdividing these into narrower categories (Leamer 1984)