While free trade yields a net positive to every nation that participates in it to any degree, tough economic times call for even more robust worldwide trade. With a failing economy it becomes all the more important for a country to maximize the use of its own resources and minimize the cost of the resources it brings in. But, following the shining example of the Great Depression, things are once again going the other way - according to a New York Times article.

After repeated pledges by world leaders to avoid erecting trade barriers, protectionism is on the march, provoking nasty trade disputes and undermining efforts to plot a coordinated response to the deepest global economic downturn since World War II.

From a looming battle with China over tariffs on carbon-intensive goods to a spat over Mexican trucks using American roads, barriers are going up around the world. As the recession’s grip tightens, these pressures are likely to intensify, several experts said.

For a little history on how well protectionism works, especially in an economic downturn, we need just look at the Hawley-Smoot Tariff Act of 1930. From The Economist:

In all, 890 tariffs were increased, compared with the previous Tariff Act, of 1922, which had itself raised duties dramatically (for examples, see table); 235 were cut. The bill squeezed through the Senate, by 44 votes to 42, and breezed through the House.

Of all the calls on Hoover not to sign the bill, perhaps the weightiest was a petition signed by 1,028 American economists. A dozen years later Frank Fetter, one of the organisers, recalled their unanimity. “Economic faculties that within a few years were to be split wide open on monetary policy, deficit finance, and the problem of big business, were practically at one in their belief that the Hawley-Smoot bill was an iniquitous piece of legislation.”

The economist's calls went unheeded and the Tariff Act became law, with predictable effects.

(T)he volume of American imports had already dropped by 15% in the year before the act was passed. It would fall by a further 40% in a little more than two years.

Other, bigger forces were at work. Chief among these was the fall in American GDP, the causes of which went far beyond protection. The other was deflation, which amplified the effects of the existing tariff and the Smoot-Hawley increases. In those days most tariffs were levied on the volume of imports (so many cents per pound, say) rather than value. So as deflation took hold after 1929, effective tariff rates climbed, discouraging imports. By 1932, the average American tariff on dutiable imports was 59.1%; only once before, in 1830, had it been higher. Mr Irwin reckons that the Tariff Act raised duties by 20%; deflation accounted for half as much again.

Smoot-Hawley did most harm by souring trade relations with other countries. The League of Nations, of which America was not a member, had talked of a “tariff truce”; the Tariff Act helped to undermine that idea. By September 1929 the Hoover administration had already noted protests from 23 trading partners at the prospect of higher tariffs. But the threat of retaliation was ignored: America’s tariffs were America’s business.

Yet the author remains hopeful. Surely, this is a lesson that America and the world has learned, right?

All this, of course, is history. There are plenty of reasons to think that the terrible lesson of the 1930s will not have to be learnt again. Governments have reaffirmed their commitment to open trade and the World Trade Organisation (WTO).

Yeah, not so much. Diplomacy's fatal flaw, the inability to enforce its results, rides again. Back to the Times article.

“No sooner was the G-20 statement issued than it was breached,” said Daniel M. Price, an official in the Bush administration who helped negotiate the agreement. “Instead of just talking about trade liberalization, countries need to take immediate steps to show they mean it.”

Far from heeding their pledge not to erect new barriers for 12 months, many countries have raised import duties or passed stimulus measures with trade-distorting subsidies... 17 members of the Group of 20 had adopted 47 measures aimed at restricting trade.

Russia has raised tariffs on used cars. China has tightened import standards on food, banning Irish pork, among other things. India has banned Chinese toys. Argentina has tightened licensing requirements on auto parts, textiles and leather goods. And a dozen countries, from the United States to Australia, are subsidizing embattled automakers or car dealers.

It's not just other nations, of course. President Obama and our Democrat-controlled Congress has already stepped their feet into the mess.

The most vivid example of that policy is the “Buy America” provision in the stimulus package, intended to ensure that only American manufacturers benefited from public-spending projects. The Obama administration persuaded Congress to water it down, and Mr. Obama has taken up Mr. Bush’s warnings about the dangers of protectionism.

But pressures are building on other fronts. Last week, the energy secretary, Steven Chu, said he favored tariffs on Chinese goods if China did not sign on to mandatory reductions in greenhouse gas emissions — underscoring how the “green economy” could be the next trade battleground.

Mr. Obama signed a $40 billion spending bill that scrapped a program enabling Mexican trucks to haul cargo over long distances on American roads. Mexico retaliated by imposing duties on $2.4 billion worth of American goods — everything from pencils to toilet paper.

We keep repeating the bad lessons of history, expecting different results. This is a common problem for liberals. A key tenet of conservatism is that those who forget (or ignore) the past are doomed to repeat it.

Liberals either forget or ignore our past mistakes with regularity. Now they control the presidency and Congress. We who remember the past may very well be helpless to avoid re-living it. Elections have consequences.