When Free Trade Was “God’s Diplomacy”

 

The free movement of goods, services, and investments has an inescapable moral dimension. Yes, most economists agree that decades of trade deals have benefited most Americans. Which is great. But it’s always worth reminding of the impact of trade on reducing global poverty.

2-billion-jp-06072016-e1465400337501As The Economist put it:

The world’s achievement in the field of poverty reduction is, by almost any measure, impressive. … Most of the credit, however, must go to capitalism and free trade, for they enable economies to grow—and it was growth, principally, that has eased destitution. … But the biggest poverty-reduction measure of all is liberalizing markets to let poor people get richer. That means freeing trade between countries (Africa is still cruelly punished by tariffs) and within them (China’s real great leap forward occurred because it allowed private business to grow). Both India and Africa are crowded with monopolies and restrictive practices.

With that in mind, I was most interested in seeing how free trade was viewed during the spread of globalization in the 1800s. As Robert Tombs writes in The English and Their History, that moral dimension was pretty important in Britain:

From the 1820s onward there developed a visionary programme to transform the world by means of free trade — the closest modern England ever came to a national ideology. As a children’s book put it, the aim was that “everybody may … be joined together in love and trade, like one great family; so that we may have no more wicked terrible battles, such as there used to be a long, time ago. ” …

Over the whole period in which it operated, c.1850 to c.1930, free trade probably made Britain slightly poorer. It meant that no British government could use its economic bargaining power to force other governments to accept free entry of British goods, which in spite of confident hopes of idealists and economists, few ever did. Britain simply allowed free access to its domestic market to all …

It may be that this was done partly due to miscalculation … but there is no doubt that free trade seemed genuinely altruistic and was unconditionally supported by religious groups, the anti-slavery movement, trade unions, women’s associations, and peace campaigners in hopes that all would eventually see the light. The dogma was that commercial freedom would eventually bring political freedom and international harmony, and hence the dissolution of empires, the liberation of serfs and slaves, the end of the “antagonism of race, and creed, and language,” and the abolition of “gigantic armies and great navies” — which states would no longer need, or, in the absence of tariff revenue, would be able to afford.

There were indeed some real benefits. As we have seen, workers got cheaper food. More widely, Britain’s commitment to free trade stimulated world trade for more than half a century. … Free traders were universalistic; all mankind was morally and intellectually the same, human values were transnational, racial and ethnic differences were irrelevant, and civilization and progress were the right and destiny of all.  …  [After the Great Exhibition of 1851], Manchester cotton merchant, Absolom Watkin, noted in his diary: “Our country is, no doubt, in a most happy and prosperous states. Free trade, peace, freedome. Oh happy England.

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  1. Xennady Member
    Xennady
    @

    The dogma was that commercial freedom would eventually bring political freedom and international harmony, and hence the dissolution of empires, the liberation of serfs and slaves, the end of the “antagonism of race, and creed, and language,” and the abolition of “gigantic armies and great navies” — which states would no longer need, or, in the absence of tariff revenue, would be able to afford.

    Sounds wonderful.

    How did it turn out?

    • #1
  2. Brad2971 Member
    Brad2971
    @

    Xennady:

    The dogma was that commercial freedom would eventually bring political freedom and international harmony, and hence the dissolution of empires, the liberation of serfs and slaves, the end of the “antagonism of race, and creed, and language,” and the abolition of “gigantic armies and great navies” — which states would no longer need, or, in the absence of tariff revenue, would be able to afford.

    Sounds wonderful.

    How did it turn out?

    Depends. How many states have huge armies and navies nowadays, compared to both World Wars and the Cold War?

    Then again, as that crudely drawn chart did not mean to show, the “god’s diplomacy” of free trade is, like everything else, subject to the Law of Diminishing Returns. It’s a law that conservatives like to forget when harping on the Law of Unintended Consequences.

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  3. Xennady Member
    Xennady
    @

    Brad2971:Depends. How many states have huge armies and navies nowadays, compared to both World Wars and the Cold War?

    Oh. The result was World Wars? And something called a Cold War?

    Wait- you thought this was about today?

    No- it’s about all the awesome consequences free trade was going to bring to the 19th centurys future.

    You know- read the quote. Somehow, like the wonderful consequences of communism, they never appeared.

    The people of England were sacrificed for nothing.

    Then again, as that crudely drawn chart did not mean to show, the “god’s diplomacy” of free trade is, like everything else, subject to the Law of Diminishing Returns. It’s a law that conservatives like to forget when harping on the Law of Unintended Consequences.

    Expecting conservatives to calibrate their wonderful theories and steely principles by noticing reality is roughly like expecting communists to do the same.

    It won’t happen. Alas.

    • #3
  4. Pugshot Member
    Pugshot
    @Pugshot

    I’m a big advocate of free trade and its role in expanding freedom and prosperity – but I’m not sure the Robert Tombs recreation of the 19th century rings accurate. I seem to recall that the British Navy and Army were fairly instrumental in opening up China to “free trade” – and I don’t think the British view of what constituted “free trade” in the 19th century was quite the same as what we think it is in the 21st century.

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  5. The Reticulator Member
    The Reticulator
    @TheReticulator

    Yes, most economists agree that decades of trade deals have benefited most Americans.

    Bait and switch. That article was about trade, not trade deals.

    • #5
  6. Valiuth Inactive
    Valiuth
    @Valiuth

    Xennady:

    The dogma was that commercial freedom would eventually bring political freedom and international harmony, and hence the dissolution of empires, the liberation of serfs and slaves, the end of the “antagonism of race, and creed, and language,” and the abolition of “gigantic armies and great navies” — which states would no longer need, or, in the absence of tariff revenue, would be able to afford.

    Sounds wonderful.

    How did it turn out?

    What do you think would have been better? The British helped to spread classical liberalism across the world. It isn’t German or French that is the global lingua franca. They won two world wars and we’re on the winning side of the cold war. So far the forces of freedom stand undefeated our enemies not only defeated but most converted to ourside. Between England and the US we have helped push the world up from barbarism into modernity. No apologies no regrets.

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  7. Xennady Member
    Xennady
    @

    Valiuth:What do you think would have been better?

    It certainly would have been better if England had been powerful enough to to deter Germany from invading Belgium in 1914.

    The British helped to spread classical liberalism across the world. It isn’t German or French that is the global lingua franca. They won two world wars and we’re on the winning side of the cold war.

    English is the global lingua franca right now because since circa 1750 the most powerful single nation on this planet has spoken it. England became the most powerful nation in Europe before the adoption of free trade, as did the United States become the powerful on Earth. The spread of classical liberalism has to do with that power, not with trade policies adopted after the fact.

    So far the forces of freedom stand undefeated our enemies not only defeated but most converted to ourside. Between England and the US we have helped push the world up from barbarism into modernity. No apologies no regrets.

    Easy for you to say since you aren’t the one paying the price. Worse, the world seems to be sliding back towards barbarism. I suggest we notice this, and react accordingly.

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  8. Xennady Member
    Xennady
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    Anyway, in general I have grown weary of discussing these endless free trade devotionals. Usually it’s the exact same arguments, endlessly recycled.

    But this one has something new, I think. The free traders have finally noticed something is wrong and, perhaps, are recalibrating.

    Old story: Free trade benefits everyone awesomely, except losers who need to rent a Uhaul.

    New hotness: Free trade makes nations that adopt it poorer- but aren’t they such good people for impoverishing themselves!!

    • #8
  9. I Walton Member
    I Walton
    @IWalton

    Trade is the source of wealth.  There is no other. The issue is what does one trade, with whom under what rules?  Like other laws, freedom under clear law is superior to central direction by men. And the larger the market the greater the potential wealth creation, choice, and dynamism. Hence, global free trade under a leading nation, such as the UK then, the US in the post war world and someone else if we choose not to lead, and turn inward.

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  10. Stephen Bishop Member
    Stephen Bishop
    @StephenBishop

    British free trade and imperial preference deindustrialized India. It did however create massive infrastructure works in the country.

    • #10
  11. Misthiocracy Member
    Misthiocracy
    @Misthiocracy

    Over the whole period in which it operated, c.1850 to c.1930, free trade probably made Britain slightly poorer.

    I’d like to see some citations to back up that claim.

    It’s precisely the claim that Karl Marx made, but I’ve read that after Marx died (1883) and Engels took a look at the actual data Marx was using, he discovered that Marx had been fudging the numbers substantially and that living standards in Britain (particularly among the working class) were going up, not down.

    (Ironically, since I started this comment as a whinge about citations to back up a claim, I do not remember where I read it. It was probably in Joshua Muravchik’s The Rise And Fall Of Socialism, which is usually my go-to source for the history of socialism and communism.)

    • #11
  12. Xennady Member
    Xennady
    @

    I Walton:Trade is the source of wealth. There is no other.

    Fascinating comment.

    I’m old enough to remember when building a better mousetrap was a phrase commonly used in the United States to describe the path to wealth.

    Now, apparently, there is no need to build a better mousetrap, or anything else, here.

    We’ll just trade for it, providing in exchange nothing more than our fancy pieces of paper, which are by the way emblazoned with the likenesses of people of who believed in tariffs and industry, especially inside the United States.

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  13. Steven M. Member
    Steven M.
    @StevenM

    Xennady:

    I Walton:Trade is the source of wealth. There is no other.

    Fascinating comment.

    I’m old enough to remember when building a better mousetrap was a phrase commonly used in the United States to describe the path to wealth.

    Now, apparently, there is no need to build a better mousetrap, or anything else, here.

    We’ll just trade for it, providing in exchange nothing more than our fancy pieces of paper, which are by the way emblazoned with the likenesses of people of who believed in tariffs and industry, especially inside the United States.

    Without trade, who do you sell the mouse trap to?

    • #13
  14. Big Green Member
    Big Green
    @BigGreen

    Xennady:

    I Walton:Trade is the source of wealth. There is no other.

    Fascinating comment.

    I’m old enough to remember when building a better mousetrap was a phrase commonly used in the United States to describe the path to wealth.

    Now, apparently, there is no need to build a better mousetrap, or anything else, here.

    We’ll just trade for it, providing in exchange nothing more than our fancy pieces of paper, which are by the way emblazoned with the likenesses of people of who believed in tariffs and industry, especially inside the United States.

    They sure as did support free trade within the United States. They didn’t want tariffs and impediments to trade within the US.

    Further, building a better mousetrap and just letting the mousetrap sit there doesn’t create a whole lot of wealth. And, in case you don’t know, US companies still build many better mousetraps, more than any other place in the world. Increased trading of the mousetrap is the very source of wealth, as another poster noted.

    following your logic, the poorest state in the United States should cut off trade with the rest of the country and they will become the richest state in no time…

    • #14
  15. The Reticulator Member
    The Reticulator
    @TheReticulator

    Big Green: following your logic, the poorest state in the United States should cut off trade with the rest of the country and they will become the richest state in no time…

    That’s a good point.

    Maybe what we need to do is distinguish between trade (a good thing) and trade deals, especially the trade deals that involve export subsidies, taxpayer-guaranteed loans, taxpayer-financed purchases, and other government preferments designed to make the rich richer and the poor and middle class poorer.

    • #15
  16. Xennady Member
    Xennady
    @

    Big Green:They sure as did support free trade within the United States.

    This is an example of why this subject has gotten so tedious. I remember discussing this very point many times-even if no one else does- and I’m tired of repeating myself.

    Further, building a better mousetrap and just letting the mousetrap sit there doesn’t create a whole lot of wealth.

    I presume everyone who builds a better mousetrap is well aware that they need to sell it to other people to make money. I have no doubt that the protectionists who governed the United States during its period of success were aware of this, because they did things like sending Commodore Perry to Japan to force open their markets for our better mousetraps.

    And, in case you don’t know, US companies still build many better mousetraps, more than any other place in the world.

    But fewer every year, as our globalist elites feel ever more confident in their globalism and indifference to the fate of the United states.

    following your logic, the poorest state in the United States should cut off trade with the rest of the country and they will become the richest state in no time…

    This is stupid- but typical of the strawman arguments beloved by free traders. No one advocates anything like this.

    But of course why discuss reality when you can describe a pretend magic world like freetradelandia, where awesome is the only possible outcome.

    • #16

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