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Mostrando postagens com marcador Free trade. Mostrar todas as postagens
Mostrando postagens com marcador Free trade. Mostrar todas as postagens

domingo, 3 de junho de 2018

Richard Cobden: o apostolo do livre comercio, citações - Gary M. Galles (FEE)

Peace, Harmony, and Free Trade: 10 Uplifting Quotes by Richard Cobden, the Shining Knight of Classical Liberalism

Cobden recognized free trade as the key to creating material prosperity.

June 3rd marks the 1804 birth of “the Apostle of Free Trade,” Richard Cobden. He earned that name spearheading the campaign against England’s protectionist Corn Laws, whose repeal in 1846 spread liberalized trade through much of Europe. Some have said free markets owe him their existence.
Cobden recognized free trade as the key to creating material prosperity. But far more, he emphasized the moral superiority of free trade over the injustice of protectionism, in which government uses its power to help one group by unjustifiably harming others. Further, he saw that markets’ exclusively voluntary arrangements formed the basis of peace. As Jim Powell described the ensuing period of liberalized trade:
"Peace prevailed, in large part, because non-intervention became the hallmark of foreign policy...There was unprecedented freedom of movement for people, goods, and capital...Trade expanded, strengthening the stake that nations had in the continued prosperity of one another as customers and suppliers. While free trade was never a guarantee of peace, it reduced the danger of war more than any public policy ever had."
In an era of occasional trade liberalization, but a great deal of protectionism for government favorites, along with too little reliable peace, Cobden still has much to teach us.
"The progress of freedom depends more upon the maintenance of peace, the spread of trade, and the diffusion of education, than upon the labors of cabinets and foreign offices."
"Protection...takes from one man’s pocket, and allows him to compensate himself by taking an equivalent from another man’s pocket…a clumsy process of robbing all to enrich none, and ties up the hands of industry in all directions."
"Holding…eternal justice to [include] the inalienable right of every man freely to exchange the result of his labor for the productions of other people, and maintaining the practice of protecting one part of the community at the expense of all other classes to be unsound and unjustifiable...carry out to the fullest extent...the true and peaceful principles of Free Trade, by removing all existing obstacles to the unrestricted employment of industry and capital."
"Look not to the politicians; look to yourselves."
"Free trade is a principle which recognizes the paramount importance of individual action."
"Peace will come to earth when the people have more to do with each other and governments less."
"[We] advocated Free Trade, not merely on account of the material wealth which it would bring to the community, but for the far loftier motive of securing permanent peace between nations."
"Our principle...would bring peace and harmony among the nations."
"People…must be brought into mutual dependence by the supply of each others’ wants. There is no other way of counteracting the antagonism of language and race…no other plan is worth a farthing."
"I see in the Free-Trade principle that which shall act on the moral world as the principle of gravitation in the universe, drawing men together, thrusting aside the antagonism…and uniting us in the bonds of eternal peace...man becomes one family, and freely exchanges the fruits of one’s labor with his brother man...the speculative philosopher of a thousand years hence will date the greatest revolution that ever happened in the world’s history from the triumph of the principle."
Richard Cobden knew that free trade was the natural result of self-ownership and voluntary arrangements, which produced justice by preventing government-sponsored robbery by some from others. He knew that it broke down privilege and barriers hindering economic progress and replaced them with mutually beneficial relations among participants. In a world far from that ideal, we should remember Cobden’s wisdom that emancipating commerce would expand both economic progress and peace.

Gary M. Galles is a professor of economics at Pepperdine University. His recent books include Faulty Premises, Faulty Policies (2014) and Apostle of Peace (2013). He is a member of the FEE Faculty Network.

sexta-feira, 8 de dezembro de 2017

Ludwig von Mises: um texto de 1942, recentemente traduzido para o ingles

Ideas on Postwar Economic Policy

December 8, 2017
Mises Institute-Peru is proud to present this English-language version of an article written by Ludwig von Mises that, until now, was only available in Spanish. The text was translated by Lucas Ghersi.
This article was first published in the Mexican journal Cuadernos Americanos, Mexico, Year 1, vol. 4, July-August 1942.  According to Bettina Bien Greaves’ bibliography, an English or German version of this text is not known (Mises: An Annotated Bibliography, p. 46).  It is likely that the Spanish version was translated from English, but an original draft in German cannot be ruled out.

We hope that one day this awful war will end and men may, once again, occupy themselves with the works of peace. Then, the production of arms and other instruments of crime will be substituted by the production of consumer goods for men, women and children. No longer will people think in annihilation and destruction but in establishing and increasing human wellbeing.
This return to peace, of course, presupposes the absolute annihilation of the totalitarian powers since, if the dictators were to prevail, the consequence of their victory would not be peace but unending warfare. In these totalitarian powers, a philosophy that proclaims war, instead of peace, is defended as the natural most desirable state for men that will provide them with joy. Their longing is not permanent peace but permanent war; thus, if they achieve triumph, the world will become a great slaughterhouse.
However, the dictators will succumb; therefore, the question is:
What must we do to close, as soon and as thoroughly as possible, the wounds opened in society during these years of fighting? This is the great problem that should worry us and that will never concern us prematurely. Even now, when the roar of battle is still being heard, statesmen and economists must think about the last day of the war. Even now they should prepare, in their spirits, what will be necessary to put in practice later.
Above all, it is necessary to make this idea clear: if postwar economic policy is to be successful, it must be based on measures radically different from those pursued before the outbreak of this war.
The main characteristic of policies implemented in the decade that preceded the current war, was economic nationalism; that is, an economic policy based on the belief that it is possible to promote the wellbeing of all nationals of a country, or at least of a specific group of them, through measures harmful to foreigners. It was understood that deterring or prohibiting, in an absolute way, the importation of foreign goods; restricting the immigration of aliens; or expropriating, partially or totally, the capital owned by foreigners could provide an important service to a country. This is not the appropriate place to analyze if those measures are suitable to achieve their desired end. The classical economic theory of free exchange has already proven, beyond refutation, that the final result of restrictions placed on foreign trade is the general decline of the productivity of labor and, therefore, of standards of living. In this way, production ceases to occur in places where a high return may be achieved and moves to others where, with the same investment of capital and labor, much lower returns can be obtained. The classic doctrine of free exchange of Hume, Smith and Ricardo has never been refuted. All objections to it turned out to be unfounded.
However, protectionism not only creates economic disadvantages. It also precludes peaceful cooperation between states leading to a sure war. The Society of Nations’ efforts to stop the new global conflagration, through a system of collective security, were in vain because of this environment since all states, big or small, tended to harm one another by implementing certain economic measures.
If we are unable to overcome economic nationalism, all hopes of achieving the reconstruction of our culture will prove illusory. Economic nationalism prevents industrialized States ¾ that is, all those that are compelled to import foodstuff and raw materials ¾ from gathering the necessary means to pay for their imports. How would they be able to pay if not through the exportation of their industrial products? If not permitted to export their industrial articles, these states would be fatally forced into autarchy; on the other hand, countries that possess raw materials would loose markets for the produce of their land. In industrialized states, this situation provokes the desire to dominate nations that possess raw materials through military means. We must not fool ourselves: ambitions of conquest lie behind apparently innocent claims for the equal distribution of natural sources of wealth and free access to raw materials.
In a peaceful world ruled by free trade, there would be no problems regarding raw materials. Each country would be able to buy all the raw materials it could pay for in international markets. In a world subject to protectionism things happen in a very different way: in this world the problem of raw materials cannot disappear; and for small countries, that is those that are weaker militarily, having mines or a fertile soil within their borders represents a danger.
All arguments regarding the advantages of peace, international cooperation, the creation of a society of nations and the reconstruction of the world economy are hollow words if there is the intention of preserving protectionism. If one is not willing to renounce economic nationalism, small states will lose their autonomy and become the vassals of strong militaristic states. Coalitions of Great Powers, armed to the teeth, will confront one another and take advantage of any momentary weakness of their adversaries to undertake new campaigns of conquest.
It is necessary to understand that this new World War (as well as the First World War) is not the consequence of a natural catastrophe unleashed upon innocent men; rather, it is the inevitable result of the nationalist economic policy pursued in the preceding decades. In a world were free trade prevails, despite the dynamism of Hitler or Mussolini, reaching a state of war would not have been possible. Evil men will always exist; however, it is important to create an economic order in which their power to do harm is reduced to a minimum.
In summary, without the eradication of economic nationalism, it will not be possible to return to peace and wellbeing.
The main problem of the postwar era will be general poverty; that is, the shortage of capital.
In the last decade, politics seemed uninterested in the problem of formation and maintenance of capital. Governments acted as if the availability of greater or lesser amounts of capital for production had no importance for the wellbeing of the people. Through their policy of taxes and public spending, these governments not only slowed down the formation of capital but also ¾ at least in recent years and in many countries ¾ caused the consumption of available capital. Thus, they did not practice a policy aimed at increasing general prosperity and raising standards of living but one aimed towards the impoverishment of the people. After the end of the current war, it will not be possible to maintain this policy unless we deliberately seek the destruction of what we nowadays call Western Civilization.
What made possible the development of this civilization, the greatest that has ever existed, was precisely, at least regarding economics, the continued accumulation of capital goods. In the days before this time of world wars and dictatorships, a greater number of people lived, including in this Western Civilization, than in the days before the Industrial Revolution; and each of these men lived much better than their ancestors a century or two before. Each year brought rising living standards for the masses; each year, new products became available for the average man, which made his life healthier, more agreeable, and more stimulating. Contemporary men would find the life of the nobility in pre-capitalist times indignant, not to mention the living conditions of the commoners.
All of these increases in living standards are due to the fact that, year after year, production exceeded consumption. The surplus was gathered and invested; that is used to develop the production apparatus. In this way, means of transportation were developed and new installations were created to achieve a better and cheaper production of all sorts of goods for consumption. The individual labor of each man yields more today because, for a given quantity of labor, there is a much greater quantity of capital goods than before. Thus, the marginal productivity of labor has been growing and, consequently, real wages have increased. If the standard of living of the masses has increased, it was because the supply of capital in the economy surpassed population growth.
But the masses did not only benefit from the increase of real wages: the modern organization of financial techniques, of systems of credit and of joint stock companies enabled these very masses to become owners of capital. Most holders of deposits in saving banks, bonds and insurance policies are even members of the working class. In a capitalist state, thrift and the formation of new capitals are not the privilege of a minority, but are generalized; and their fruits, in one way or another, benefit everyone.
Governments and politicians have refused to recognize that the increase of capital is the lifeline of economic progress; on the contrary, they made everything they could to take away people`s desire for thrift. They confiscated part of that capital through taxes and impaired small savings by means of inflation. They carried out expropriations thus eroding the stocks of capital that had been achieved.
As an example, we can mention the way Hitler acted in relation to German railroads in the Reich. A long time before the First World War, diverse German states ¾ Prussia, Bavaria, etc. ¾ bought railroads built with private capitals, paying for them with bonds. Since these bonds lost their value due to inflation, in a way, the Government acquired these railroads for free. Hitler managed this vast supply of capital, equivalent to more than 60,000 kilometers of rail, in the most irresponsible way. He did not substitute vehicles (locomotives and railcars) that had been worn out by use, nor did he maintain rails and signal equipment as it would have been convenient; he also completely unattended fixed equipment. The situation is similar in the railroads of southern and eastern Europe. When the current war is over, the greater part of the railroads of Europe will be a heap of stones and scrap metal. In this way, capital worth thousands of millions has been consumed in the strictest sense of the word.
The destruction of capital caused by the war far surpasses that which happened before the war. When the struggle is over, we will see everywhere huge installations dedicated to the production of arms and other materials for war, however these installations cannot be utilized for the production of the goods that are required in peacetime. The capital immobilized in them will be lost and, instead, there will be lack of capital where it is most necessary. Old installations meant to produce goods necessary in peacetime will be useless, either because they have been converted to serve the needs of rearmament, or because they have been ruined after several years of disuse.
What could we do to alleviate this shortage of capital as quickly as possible?
There is only one solution: to produce more than what is consumed; that is, practice thrift and, in this way, form new capital. The more one produces, and the higher the proportion of that production that is invested rather than consumed, the sooner the hard times of capital shortage will be over. All those that propose solutions different from the one explained above are either fooling themselves or trying to fool others.
There are no magical financial procedures to remedy the shortage of capital. The expansion of credit cannot alleviate it and much less, suppress it. On the contrary, the boom artificially produced by the expansion of credit creates distortion and, therefore, a waste of capital by immediately promoting overconsumption; that is, the reduction of capital. Inflationist experiments will only make the ailment worse. What is necessary in this case is, precisely, a monetary and credit policy that guarantees the stability of monetary value.
Governments will have to renounce to all confiscatory measures: they will have to radically change their tax policy.
In many countries, taxes on rent and inheritance have been transformed into ill-disguised measures of confiscation. The continuity of this system is not compatible with the existence of private property and is pointless unless we wished to transit to a communist regime and make standards of living fall to the permanent state of misery that prevails among the Russian masses. Within the limits of a non-communist system, these measures only produce an effect of immobility and destruction. They stimulate the consumption of capital since; what logic is there in thrift for a man who knows that only a small part of his inheritance will go to the hands of his children?
If we wished to preserve an income tax, it would be necessary to transform it into a tax on consumed rent. Incomes that are not consumed, but saved and invested, should be exempt from all taxation since it is of public interest to form as much new capital as possible.
All large corporations are developed through the consumption of only a small part of their profits and the investment of the rest. Due to the simultaneous existence of national and local duties, the current system increased the taxation of larger incomes to rates of 100% or more. This system makes it impossible to create new industries or develop those that already exist. For the benefit of the North American people, the development of corporations that supply markets with a variety of cheap goods did not stop some years ago; however, current efforts to prevent new competitors from emerging cause harm to consumers while granting unjustified protection to the incapable heirs of existing corporations. Tax legislation, considered by its supporters to be in favor of the people, only produces the antisocial effect of hindering the supply of consumer goods.
The decrease of government revenue, as an inevitable consequence of these reforms in the tax system, must be compensated with the restriction of public spending. It is necessary to break free, once and for all, from the illusion that the State has money for everything and everyone. The State cannot give to somebody what it has previously not taken away from others. In order to plan the State’s expenses, it is necessary to carefully assess whether the profits to be obtained from the desired expense are more beneficial than the required increase in taxation and its economic consequences are harmful. It will no longer be possible to give away subsidies or issue bonds to finance the reelection of members of parliament. It will be necessary to return to the economic management of old parliaments, which understood that an ordered budget is preferable to the supposed happiness of leveled budgets.
Capital shortage will probably be less severe in the United States of America than in the British Empire and less oppressive there then in the European continent. In central, eastern and southern Europe, the situation will be completely catastrophic. The industrialized nations of Europe, the most densely populated places on earth, cannot feed their people without exporting the products of their industry, which are largely manufactured from imported raw materials. Those countries will be forced to compete in global markets with their industrialized products and this will not be done successfully unless they rebuild their apparatus of production, which was destroyed by hostile policies towards capital in the previous era and by the war itself, to the levels of capital that existed before the outbreak of the war. They will have to completely renovate their transport infrastructure and the machinery of their factories; in other words, completely address all the problems of industrial production again. But before achieving it, they will have to endure years or decades of hunger and misery.
It is clear that, in these circumstances in Europe, particularly in central and southern Europe, the activities of labor unions will not be possible for a long time. The tendency of labor unions to forcefully obtain higher wages and shorter working hours for their members, through unionist means, must be forgotten wherever capital is completely lacking. Workers will have to satisfy themselves with a job that can protect them from misery. To whom will they address their complaints in a country where there is no capital to set industry in motion? Low salaries, low standards of living, and a general decline of culture: these are the sad but inevitable consequences of the shortage of capital.
When they notice the pitiful luck of their European peers, North American workers must realize that they have effective means to remedy the situation: opening up American borders to European immigration would create a tendency to equate the level of European wages to those of the United States. However, if restrictions to immigration persist, wages in Europe, where natural conditions of production will be worst and capital shortage most acute, will be much lower than those in North America.
Thus, it is clear that, after the war, the shortage of capital will produce radical changes in domestic policy. Now we shall examine what the consequences will be regarding foreign policy.
The development of international markets for capital and currency during the 19th century was a great achievement of far reaching worldwide political consequence. The peoples of Western Europe, which where the first to create political and economic institutions favorable to the formation and conservation of capital, made part of their wealth available to less favored nations through a system of credit. The excess savings of Europe where invested around the world and helped the peoples of Eastern Europe and Asia overcome their state of economic backwardness; it also provided Americans and Australians with the means necessary to exploit the riches of their land. European culture provided all humanity, not only the fruits of modern technique, but also the material means to transform the economy according to the demands of modern technique. Billions poured from Europe (and later also from the United States) to all the countries of the earth and, as payment, European capitalists, men of business and thrift, received property rights and industrial values.
This international organization of credit is now in ruins; the same countries that, once, prospered because of it have destroyed it. Neither the debts’ interest nor their principals were paid either because debtors openly defaulted on their obligations or because governments cancelled the rights of creditors through inflation or currency controls. Businesses belonging to foreigners were expropriated or taxed in such a way that their owners where left with nothing but hollow legal titles. Creditors and foreign capitalists have been completely dispossessed of their rights.
In these circumstances we cannot expect that, after the war, the least ruined countries will make their capital available to the most ruined. The experience of capitalists and businessmen, regarding the concession of credit and participation in foreign ventures, is sufficiently explicit for them to feel inclined to expose themselves to the dangers of such adventures. Maybe the United States, motivated by old friendships, will invest some capital in Anglo-Saxon countries or in Mexico, as help to a neighbor. However, even this is doubtful since American trade unions tend to regard exports of capital as contrary to their interests and, therefore, demand measures aimed at preventing them. In any case, it is certain that other peoples will not expect foreign capital, to help rebuild their economies, unless the dire condition of foreign capitalists changes radically.
Energetic reforms in international law are necessary to set the international mechanisms of capital and credit in motion again. Only states willing to accept great restriction on their sovereignty can hope to obtain credit or direct investment from abroad. In all matters related to foreign capital, these states will have to renounce their autonomy in favor of the Society of Nations; that is, in all that affects monetary and credit policy as well as mercantile and fiscal powers over foreign capital, they will have to submit unconditionally to the jurisdiction of international courts and tolerate the decisions of those courts to be executed through an international coercive power.
Undoubtedly, all this may seem very strange and the leaders of most states will simply consider it unacceptable. But, above all, it is necessary to consider two things: firstly, every state will be free to submit or not to these conditions and to accept or decline the assistance of foreign capital; secondly, it is inevitable to liquidate a conception of state sovereignty that is no longer in harmony with current circumstances. In no way is it possible to accept that cases such as those of Austria, Albania or Ethiopia can repeat themselves. Great Powers must award effective protection to small states from violations such as these. The ambitions of states that secretly practice a policy of rearmament must be contained through an international police force. It will be necessary to treat governments that disturb the peace in the same way as bandits and murderers are treated within states. By establishing such a system, restrictions of sovereignty regarding financial and fiscal policy will not seem intolerable and much will have been gained.
However, we must point out that all these measures will not be able to completely remedy the shortage of capital. What may be achieved is a more equitable distribution of existing capital and with this much will have been gained.
After the current war, the world will not be a paradise. Men will be poor and have to endure the spiritual and moral consequences of poverty.
Not all peoples will suffer in the same way the consequences of war. Latin American countries will probably be among the least affected ones. Thus, their backwardness in relation to Anglo-Saxon countries will be compensated in part. A new era will begin in which the handicap of Latin America will be smaller.
The supposed backwardness of Central and Southern America, that always made ordinary Cook tourists smile compassionately, was only due to the shortage of capital in those countries. Since capitalism reached Latin America two centuries late in relation to other countries, certain institutions familiar elsewhere were lacking in the region. The low level was not moral or intellectual: it was nothing else than a relatively higher shortage of capital.
But now, more or less, all countries will begin again; and, therefore, with the passing of the years, these differences may gradually fade. Through a wise economic policy, it may be possible that Latin American countries can conquer the place in the World Economy to which they are predestined by the genius and industry of their citizens and the wealth of their land. 

Ludwig von Mises was the acknowledged leader of the Austrian School of economic thought, a prodigious originator in economic theory, and a prolific author. Mises's writings and lectures encompassed economic theory, history, epistemology, government, and political philosophy. His contributions to economic theory include important clarifications on the quantity theory of money, the theory of the trade cycle, the integration of monetary theory with economic theory in general, and a demonstration that socialism must fail because it cannot solve the problem of economic calculation. Mises was the first scholar to recognize that economics is part of a larger science in human action, a science that he called "praxeology."

sábado, 21 de outubro de 2017

A eterna luta entre o comerciante e o burocrata - Guglielmo Palombini (Mises Institute)

The Eternal Struggle Between the Merchant and the Bureaucrat

  • merchant.PNG
Translated from the Italian by
[This article has been translated from Piombini's Italian original by Bernardo Ferrero.]

Before the State

For a very extended period of time primitive men lived in small groups of hunters and gatherers at a time in which there was no state. The modus vivendi of these clans was such that after having exhausted all nature-given resources in a particular area, they would move elsewhere in search of other available food supplies. This system of nomadic life could endure as long as the human race was limited and the vast majority of land remained uninhabited. Yet, this lifestyle was not sustainable, and within a short period of time the intensification of these hunting activities provoked an ecological crisis that spread across Europe, the Middle East and America, causing the extinction of 32 animal species [that had been an important food source].
The disappearance of the megafauna inaugurated, around the year 10,000 B.C. the transition to a mode of production based on agriculture. The Neolithic revolution could in fact be described as the pragmatic response to the exhaustion of resources that resulted from the intensified exploitation of the system based on hunting and gathering. Even though the lives of the farmers were admittedly harder than those of the hunters, requiring long and heavy hours of labor in the fields, the sedentary life of the village made it possible for a far greater number of mouths to be fed: thanks to appropriations and to the cultivation of land, the human population increased considerably, giving birth to the first civilizations.

The Violent Origins of the State

According to historian William Durant:
Agriculture teaches men pacific ways, inures them to a prosaic routine, and exhausts them with the long day’s toil; such men accumulate wealth, but they forget the arts and sentiments of war. The hunter and the herder, accustomed to danger and skilled in killing, look upon war as but another form of chase, and hardly more perilous, when the woods cease to give them abundant game, or flocks decrease through a thinning pasture, they look with envy upon the ripe fields of the village, they invent with modern ease some plausible reason for attack, they invade, conquer, enslave and rule.
The first states emerged when these nomadic tribes of hunters and herders understood that the systematic exploitation of agricultural villages through taxation constituted a far more efficient and lucrative system than the old one of plunder and extermination. That the state was born in a brutal fashion is confirmed by every historical and anthropological research. On this matter, Friedrich Nietzsche wrote:
a race of conquerors which, aggressive, powerful and organized, pounces with its most horrid claws on an unsuspecting population, one which in numbers may be tremendously superior, but is still undisciplined and nomadic. Such is the origin of the ‘"state."
According to Sociologist Lester Ward,
The state as distinct from tribal organization begins with the conquest of one race by another.
Similarly, wrote the Austrian general and sociologist Gustav Ratzenhofer,
Violence is the agent which has created the state.
and as Franz Oppenheimer observed,
Everywhere we find some warlike tribe breaking through the boundaries of some less warlike people, settling down as nobility, and founding its state.
The concept of State above mentioned is meant in a sociological, rather than in a political sense. In the field of political science one intends the state to be a particular type of political organization that emerged in Europe at the end of the middle ages. According to the more generic definition used in sociology, instead, one talks about the existence of a state whenever society is divided in two distinct classes: a productive majority who gets by through the employment of economic means (production and exchange) and a ruling elite who gets by through the employment of political means (taxation and expropriation). The typical order of a state and the inevitable division in social classes which defines it emerge simultaneously, according to sociologist Franz Oppenheimer, in that very crucial historical instant in which for the first time the conqueror decides to save the conquered from immediate annihilation in order to exploit him permanently in the years to come.

The Struggle between Merchants and Bureaucrats Begins

From that moment onwards, writes the anthropologist Marvin Harris, producers have precipitated in a dramatic condition of servitude from which they have never really escaped:
For the first time there appeared on earth kings, dictators, high priests, emperors, prime ministers, presidents, governors, mayors, generals, admirals, police chiefs, judges, lawyers, and jailers, along with dungeons, jails, penitentiaries, and concentration camps. Under the tutelage of the state, human beings learned for the first time how to bow, grove, kneel and kowtow. In many ways, the rise of the state was the descent of the world from freedom to slavery.
The birth of the state was then accompanied by a real class struggle between producers and bureaucrats, a struggle which to a great extent remains alive to this day: while the first group desires to keep the fruits of its own labor, the second aspires to come into possession of those fruits through force and inaugurate a system of rule and exploitation. The eternal conflict throughout history is therefore that between men of freedom and men of administration, between social power on the one hand and state power on the other. As will be illustrated in the examples that follow, the progress or decadence of civilization are determined by the trend of this struggle.

Societies of Bureaucrats

1. The Ancient Empires
Since the early days of recorded History, the great majority of people lived miserably under the most tyrannical empires (the Babylonian, Egyptian, Chinese, Persian, Indian, Late-Roman, Arab, ottoman, Incas, Aztec) which extended themselves across large areas. In these ancient empires progress was so slow as to go unnoticed and the reasons for such stagnation were the following: Political power in those empires did not have any need to innovate, rather innovation was fought due to the fear that new discoveries would disrupt the established system; the bureaucratic and military elite that ruled used to come into possession, through force, of every surplus of production repressing every small sign of resistance; every autonomous social force was nipped in the bud and nothing escaped the control of the despot who was the absolute owner of all goods of the reign and of all its inhabitants; finally the people were submitted not only to a confiscatory level of taxation but to forced labor for the construction of grandiose public works such as canals, city walls, pyramids and buildings.
These ancient empires were agglomerates of illiterate peasants who toiled from the morning to the night just to be able to provide for themselves vegetables without protein. Not surprisingly, they were not in a much better condition than their oxen, and at the same time they were completely subjugated to the commands of their superiors who could read and who were the only ones possessing the right of manufacturing and using war like instruments. The fact that these societies have lasted thousands of years sounds like a severe warning: there is no intrinsic force to human activities that can assure material and moral progress.
2. A Perfect Example: the Chinese Empire
The millenary empire of China can serve as a typical example of a closed society, that was completely dominated by a cast of intellectuals and bureaucrats. As the greatest historian of ancient China, Etienne Balasz, has explained, the Confucian state was decisively totalitarian. No private initiative was allowed and no expression of the public life could escape official regulation: clothing, private and public constructions, music, parties, and even the colors that one was allowed to wear were subject to the rigid control of the state. In addition, there were prescriptions of birth and death and the state surveilled with terrifying attention every step of its subjects, from the cradle to the grave.
China in the days of the mandarins was an environment of changeless patterns, routines, characterized by traditionalism and immobility and therefore suspicious towards any possible kind of innovation and initiative, let alone free research and entrepreneurship. The ingenious and inventive spirit that was not foreign to the Chinese would have doubtlessly enriched the country, but it was the state that impeded the country to embark upon an age of technical progress and economic development, by crushing every kind of private initiative just because it was thought to collide with the interests of the bureaucratic cast.
It is not surprising that throughout Chinese history technical and economic progress have coincided only with those phases of relative weakness of the central power, like in the period of the warring states (453-221 B.C), probably the richest and most brilliant of all Chinese history, or the period of the three reigns (220-280 A.D.). Even after 907 A.D. when the Tang dynasty collapsed and the period of endless wars for supremacy began, during the so-called period of the five dynasties and the five reigns, the country experimented a striking explosion of inventions and prosperity due to the lack of centralization.
3. A Modern Case: The Soviet Union
In our epoch, communist regimes have brought back, albeit in a bloodier form, the totalitarian control that was so characteristic of the ancient oriental despotisms. Marxist ideology with its radical hostility towards property, commerce and free enterprise, revealed itself to be the most suitable paradigm in satisfying the will to power of the parasitic classes. In every country where the political and bureaucratic classes have sought to destroy the productive sector, they have found it useful to uphold Marxist ideology as their mantra.
The extreme exploitation perpetrated by the communist bureaucracies against the productive classes, which in the case of the kulaks reached the stage of physical extermination, was denounced by Lev Trotzkij, Ante Ciliga, Milovan Gilas, Mihail Voslensky. Yet the most penetrating and most insightful analysis of the bureaucratic exploitation that took place under communism has come to us from the works of Bruno Rizzi, an ingenious, self-taught Italian scholar. Rizzi was arguably the first to comprehend that a parasitic class of bureaucrats had taken power in 1917, composed as he wrote of “state officials, policeman, writers, union mandarins and all the communist party in block” that kept plundering the workers in the most ferocious way ever to be seen.
The post-1917 Soviet State, Rizzi noted, had been drastically inflated. The bureaucrats with their respective families constituted a mass of 15 million people who had stuck to the upper levels of the administrative throne with the only job of sucking a great portion of the national product. In the Kolchoz, the state owned agricultural enterprises, only 37% of production remained in the hands of the workers, while the remaining went to the state who then turned it over to the bureaucracy. State functionaries, in addition, continuously made deals at the expense of ordinary citizens by fixing wages and prices for various products and by treating the “workers” as its “forced clients”, obliging them to acquire products in state owned stores with a markup that at times reached 120%.
Officials of the state in addition, obtained notable advantages by being able to destine many of the accumulated capital funds, set aside for the construction of public works, in projects that went to the exclusive benefit of their own class, a lucid example being the headquarters of the bureaucracy, the sumptuous 360 meter’s tall house of the soviets (the workers, meanwhile, had to cope with a home that was 5 meters squared on average). By having total control of the economic levers, guaranteed by an extremely invasive police state in the USSR, the bureaucracy was really omnipotent and every action on her part was aimed at maintaining its political hegemony and its well-established economic privileges.

Societies of Merchants

1. The Phoenicians and the Greeks
Around the year 1200 B.C. the empires of the bronze age (the Egyptian, Minoan, Mycenaean, Hittite and Assyrian empires) succumbed into a period of stagnation caused by the progressive suffocation of productive and mercantile activities. The crisis of the central powers gave freedom of action to certain commercial people in the Middle East coming mainly from modern Lebanon, who, with their ships, began to sail the sea transporting goods and products of any kind. For the first time in history one saw the development, in the Mediterranean basin, of a catallactic system based on an integrated division of labor where markets and ports began to grow up to the point of becoming established cities. Commerce soon became the fly wheel of innovation: The Philistines invented iron; the Canaanites the alphabet; the Phoenicians discovered glass and at the same time improved boats, navigational knowledge and accounting systems.
“In truth, writes Matt Ridley, was there ever a more admirable people than the Phoenicians?” Those ancient merchants connected not only the entire Mediterranean, but also the accessible coasts of the Atlantic, the Red Sea and the overland routes of Asia, and yet they never had an emperor and never participated in a memorable battle. In order to prosper the Phoenician cities of Tyre, Byblos, Sidon, Carthage and Gadir did not feel the need of uniting into a single political entity, and therefore never went beyond a very modest federation.
In the words of Matt Ridley:
The Phoenician diaspora is one of the great untold stories of history- untold because Tyre and its books were so utterly destroyed by thugs like Nebuchadnezzar, Cyrus and Alexander, and Carthage by the Scipios, so the story comes to us only through snippets from snobbish and envious neighbors.
Even the Greek miracle confirms the important lesson, first formulated by David Hume, that political fragmentation, by putting a break on the extension of political power, is the real ally of economic progress. The extraordinary dissemination of prosperity and of Greek culture between the years 600 B.C. and 300 B.C presents us with a development similar to that of the Phoenician cities: Miletus, Athens and the other hundred independent cities of Magna Grecia, enriched themselves through the extension of commercial relationships without being part of a single empire. Furthermore, the circulation of ideas that the increased trade made possible, gave birth to the grandiose discoveries of the time. The lesson of the Greek miracle is the following: It is always the merchant who opens the door to the philosopher, not the other way around, by enriching the city and opening it, through foreign trade, to new ideas. Unfortunately, this period of Greek enlightenment died out as soon as new empires began to ascend: first the Athenian, then the Macedonian, and ultimately the Roman.
2. The Communes of Medieval Europe
The fall of the Roman Empire in 476 A.D. represented the luckiest event in the history of the old continent. Thanks to circumstances that one could describe as miraculous, Europe never returned to being a unified political entity, after the repeated failures of Charlemagne and the Germanic emperors. The lack of political unity enabled a widespread social experimentation that unleashed into a creative competition between thousands of independent political units of which the byproduct was rapid economic, social and cultural progress. The weakness of the central authority favored the cities which became the leaders in the 11th century of a political and commercial revolution that would mark the European institutional setting for centuries to come. In fights that lasted even hundreds of years, the inhabitants of the cities escaped the dominion of emperors and feudal lords, rebuilding society through self-government from the bottom up. The inhabitants of these communes oriented themselves toward the economy and not toward politics because, unlike those of the ancient cities they lacked a great mass of slaves at their disposal: they found themselves forced to abandon predation (which had been the common means of increasing one’s own well-being up to those days) and engage in manufacturing activities and commerce. In this manner, the medieval bourgeois extended the market economy beyond the limits of the feudal world and by the year 1200 A.D. Europe was a region inundated by working men, farmers, entrepreneurs, artisans and merchants who exchanged the fruits of their own labor at the many annual fairs: this was a very different scenario from the one that prevailed in other areas of the civilized world, where the masses continued to be subjugated by omnipotent imperial bureaucracies.
3. 3 Modern Cases: Holland, England, and the United States
In the 17th century the incredible success of the little country of Holland and the disastrous ruin of the Spanish empire, stands to confirm, in the eyes of contemporary historians, the superiority of the commercial society over the bureaucratic one. In Spain, during those years, a new anti-bourgeois ideology had developed among its elite, an ideology that saw with great scorn and contempt the accumulation of wealth through value enhancing work. The Spanish bureaucratic state as a consequence began to be directed by men who were completely foreign to the world of economics and business and who pushed the country into adopting economic policies that played out to be a disaster for commerce and industry.
In the United Provinces at the time, matters were different. Laissez-faire was a consolidated and fully legitimized praxis, and the success that Holland derived from the adoption of free trade caused a mix of admiration, amazement, and envy all around Europe. In 1670, the Dutch were by far the biggest players in the international trade arena to the point that their merchant navy was bigger and mightier than those of France, Scotland, Germany, Spain and Portugal put together. Holland, in the 1600s was a laboratory in which one could observe and study the capitalistic and bourgeois society in its purest form. Its example showed the path toward self-propelled development: ignoring the Dutch reality meant condemning oneself to continued stagnation.
The English were the first to understand how the prosperity of Holland was closely connected to the liberty that individuals and economic agents enjoyed over there, and it was by imitating the Dutch, that they began to build the basis of their world supremacy. In the 19th century then, England adopted unilaterally a series of measures that opened its harbors to the rest of the globe and such a drastic and unprecedented move provoked a reduction of custom tariffs in all major countries, via a competitive process. Finally, humanity was able to experience the birth of a free and authentic market economy that operated internationally: a Phoenician experiment on a planetary scale. Each country that participated in this international division of labor benefited, and this is shown by the fact that the world economy throughout this period grew by 3 times. But It was in the two most free-market countries, namely England and the United States, where economic growth surpassed by far that of the rest of the world: from 1820 to 1913 the gross domestic product of England increased six-fold, while the American one grew by 41 times.
Decisive for the success of Victorian England and the young United States, according to economic historian Deirdre McCloskey, was the consolidation at the social level in those years of a bourgeois mentality that praised and honored the common man who created his fortune through work, commitment, creativity and ingenuity. Nothing probably better symbolizes the cultural victory of the productive classes of society than the statue placed in Westminster abbey in 1825 in honor of James Watt, inventor of the steam engine.

For a Libertarian Historiography

One can therefore see how the great intellectual and material creations that have elevated human civilization through the ages have not been the product of bureaucrats, but of producers, merchants, entrepreneurs, some of whom have been obscured, exploited, mistreated and others who have simply been forgotten. The protagonists of human development are not the emperors, kings, presidents, ministers or generals who most often appear in our conventional history books, but the farmers, artisans, entrepreneurs and merchants who improved the many arts, techniques and professions. The bravest among these have defended freedom and civilization arms in hand, refusing to be subjugated by the powers of their day.
The common thread in human history is the endless conflict between tax payers and tax consumers which brings us to the following conclusion: Libertarian scholars should narrate historical events through the lenses of those men who represented the ideas of freedom, not those of power. Civilization, ought to be remembered, has been edified by those men who have resisted power, not by those who have exercised it.

Guglielmo Piombini is an Italian journalist who has collaborated in various magazines and newspapers including Liberal, il Domenicale, and Elite.  His articles have also appeared at Ludwig von Mises Italia. Piombini is also the founder of Tramedoro: the online platform that provides a detailed overview of every major classic of the social sciences. Specializing in medieval institutions he is the author of the book “Prima dello Stato, il medioevo della liberta” (“Before the State: The Middle Ages Of Liberty”). 

terça-feira, 15 de agosto de 2017

World War I and the Triumph of Illiberal Ideology - Matthew McCaffrey (Mises)

World War I and the Triumph of Illiberal Ideology

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Mises Daily, 08/14/2017

Just over a century ago, in August 1914, the major European nations plunged their peoples into one of the most disastrous conflicts in history. The First World War claimed at least seventeen million lives, destroyed the social and economic fabric of Western Europe, and played a vital role in the expansion of state power around the world. It is therefore difficult to exaggerate its importance.
The causes of the war are too many and too complex to discuss in a short article (however, for those interested, the late Ralph Raico provides a fascinating overview here). I will discuss only one general problem that helped fuel the catastrophe: the ideological shift that occurred in Europe in the late 19th and early 20th centuries away from the liberal philosophy of laissez-faire and laissez-passer and toward autarky, protectionism, nationalism, and imperialism. Mises, himself a veteran of the First World War, identified these latter ideologies as joint causes of numerous conflicts. Furthermore, he repeatedly warned that war is a necessary outcome of abandoning economic freedom, which is inextricably tied to the spirit of liberalism and its philosophy of peace:
Aggressive nationalism is the necessary derivative of the policies of interventionism and national planning. While laissez faire eliminates the causes of international conflict, government interference with business and socialism create conflicts for which no peaceful solution can be found. While under free trade and freedom of migration no individual is concerned about the territorial size of his country, under the protective measures of economic nationalism nearly every citizen has a substantial interest in these territorial issues. (Mises, 1998 [1949], pp. 819-820)
Economic nationalism, the necessary complement of domestic interventionism, hurts the interests of foreign peoples and thus creates international conflict. It suggests the idea of amending this unsatisfactory state of affairs by war. Why should a powerful nation tolerate the challenge of a less powerful nation? Is it not insolence on the part of small Lapputania to injure the citizens of big Ruritania by customs, migration barriers, foreign exchange control, quantitative trade restrictions, and expropriation of Ruritanian investments in Lapputania? Would it not be easy for the army of Ruritania to crush Lapputania’s contemptible forces? (Mises, 1998 [1949], p. 827)
By and large, these are the kinds of international conflicts that developed in the decades prior to 1914. As relative free trade declined and imperialism flourished, a culture of militarism swept Western Europe, triggering a race to accumulate military assets and materiel on a previously unknown scale.  By the outbreak of the conflict, every major belligerent except Britain had also adopted conscription so as to ensure an abundant supply of human as well as physical resources. Such policies could only end in disaster.
It is important, however, that even though many soldiers were compelled to fight, extraordinary numbers also volunteered for service, especially in the early days of the war. This fact is not so astonishing once we acknowledge the role of ideology. Throughout the 19th century, the nation-state had come to play an increasingly important role in forming the identities of many young European men. This development added a personal ideological dimension to warfare that was largely new, and which also created divisions along political lines among peoples who could otherwise have been at peace. It also helps explain the patriotism and nationalism that lead so many volunteers so unwittingly to the slaughter. Crucially, these sentiments were nurtured and reinforced by many important institutions of European society, especially its intellectual classes, who bear a large portion of the blame for rationalizing and glorifying war.
To take only one example, in his book A History of Warfare, John Keegan recounts a call to arms issued jointly by the rectors of the Bavarian universities on August 3rd, 1914:
Students! The muses are silent. The issue is battle, the battle forced upon us for German culture, which is threatened by the barbarians from the East, and for German values, which the enemy in the West envies us. And so the furor teutonicus bursts into flame once again. The enthusiasm of the wars of liberation flares, and the holy war begins. (quoted in Keegan, 2004 [1993], p. 358; emphasis in original)
This passage hints at the ideological climate in much of Europe after its retreat from an all-too-brief trend toward liberalism. Yet even including the melodramatic rhetoric, the ideas invoked above are indistinguishable from ones made today by both military and culture warriors. The use of religious language to frame a political conflict, the idea that war has been forced upon the blameless, and the claim that barbarians from foreign nations represent an existential threat to civilization that can only be overcome by abandoning reason and resorting to violence based on appeals to tribalism and a (different) barbarian heritage, are still familiar in an age when the European empires have been replaced by an American one. They also run strongly counter to the principles of liberalism.
Historically, the immediate result of the rectors’ appeal was the mass enlistment of German students; so many volunteered that they formed two new army corps. These men were flung almost untrained into battle against British regulars at Ypres in October, 1914, where 36,000 were massacred in only three weeks (Keegan, 2004 [1993], pp. 358-359).[1] This senseless death did not, however, serve as a rebuke to the military class, much less provide an impetus away from international and domestic conflicts; instead, it was simply mythologized and used for propaganda by the Nazis in the Second World War.
The lesson then is that the human costs of war do not in and of themselves teach anything to those who are not willing to listen. War will not cease until the ideas that support it are removed, and until they are, their costs will simply be used as justifications for further conflict. In Mises’s words, “To defeat the aggressors is not enough to make peace durable. The main thing is to discard the ideology that generates war” (Mises, 1998 [1949], p. 828).

[1] I have been unable to verify this estimate, and other sources suggest the number killed was significantly lower. In any case though, casualties were horrific.

terça-feira, 14 de fevereiro de 2017

A conspiracao anglo-americana do livre comercio - book review, Marc-William Palen

Um livro sem nenhuma dúvida importante para quem estuda história econômica (como eu). Mas 65 libras esterlinas ainda é muito caro. E esse tipo de livro vai demorar para entrar no Abebooks...
Sniff, sniff...
Paulo Roberto de Almeida

Roundtable Review
Volume XVIII, No. 16 (2017)
13 February 2017

Roundtable Editors:  Thomas Maddux and Diane Labrosse
Roundtable and Web Production Editor:  George Fujii
Introduction by Jay Sexton

Marc-William Palen:
The “Conspiracy” of Free Trade:  The Anglo-American Struggle over Empire and Economic Globalisation, 1846-1896.  
Cambridge: Cambridge University Press, 2016.  Xxxviii + 295pp. £64.99 (hardback).  ISBN:  9781107109124.
URL:  http://www.tiny.cc/Roundtable-XVIII-16

Introduction by Jay Sexton, Kinder Institute, University of Missouri 2
Review by Alfred E. Eckes, Jr., Ohio University, Emeritus. 5
Review by Daniel Peart, Queen Mary University London. 8
Review by David Sim, University College London. 12
Review by Ian Tyrrell, Emeritus, University of New South Wales, Sydney. 15
Author’s Response by Marc-William Palen, University of Exeter. 19
© 2017 The Authors.
Creative Commons Attribution-NonCommercial-NoDerivs 3.0 United States License.

Introduction by Jay Sexton, Kinder Institute, University of Missouri
Nineteenth-century Americans were obsessed by the tariff. They spilled vast quantities of ink making the case for tariff reductions or increases, debated it endlessly in Congress, framed elections around it, and even viewed foreign relations through the prism of ad valorem duties. Yet modern students of the history of the nineteenth century might not know this for, until very recently, the tariff has been conspicuous for its absence in the historiography. The lack of scholarship on the topic is, in part, a reaction to discredited interpretations of the Civil-war period that emphasized the role of the tariff as a motive for secession. But, in the bigger picture, this lacunae is part of a broader marginalization of high politics and economics in the historiography. Fortunately, recent years have seen a revival of interest in the tariff, political economy, and the general theme of ‘capitalism’. This trend will be given a great boost by the publication of the subject of this round-table review, Marc-William Palen’s The “Conspiracy” of Free Trade: The Anglo-American Struggle over Empire and Economic Globalisation, 1846-1896.

All of the reviewers in this round-table commend Palen for bringing the tariff back onto historians’ radar. All also predict that Palen’s ambitious study, “a challenging and persuasive book” in the words of Ian Tyrrell, will reignite interest in this timely topic and spawn further studies of the tariff in the nineteenth century and beyond. Several of the reviewers begin to sketch out how Palen’s interpretation of the nineteenth-century debate over protectionism might have echoes in later periods, though David Sim wonders if the path from the nineteengh century to current times is “as clear cut as Palen describes.”

The reviewers also found much to praise in how Palen links debates over trade and protectionism to the imperial projects of the nineteenth century. In Palen’s account, the debate about tariffs structured two types of Victorian imperialism: first, the commercial project of British ‘free trade imperialism’; and, second, its rival form of a U.S. empire committed to economic nationalism. Palen develops this latter point with a sharp historiographical edge in that he seeks to counter the old view of the New Left that emphasized the open commercial underpinnings of American expansion.[1] Tyrrell contends that this dimension of Palen’s argument makes a “severe dent in the Open-Door thesis.”

The reviewers raise interesting questions and, in the case of Alfred Eckes, develop critiques of Palen’s arguments and methods. Many of these questions concern Palen’s emphasis on the ideological nature of the debate over protectionism and its connections to grand processes of imperial expansion and innovation. The reviewers wonder if other dimensions of the tariff debate merit more emphasis. Daniel Peart and Eckes both make the case for placing Congress and the messy political process of tariff legislation-making at the center of the story. As Eckes put it, “on tariff matters legislators generally respond to specific needs and requests from constituents and lobbyists, not to the words of propagandists and ideologues.” Eckes wonders how the story might look different had Congress been given more attention and if other sources, namely the Victorian free trade publication The Economist, been consulted.

Another line of questions raised in the reviews concerns Palen’s framework for viewing the American tariff debate as an outgrowth of the dueling ideas of the English free-trader Richard Cobden and the German advocate of protectionism Friedrich List. Throughout the text, Palen labels American protectionists ‘Listian’ and free-traders ‘Cobdenites’. The reviewers applaud Palen’s emphasis on the transnational dimensions of the tariff debate and, in particular, his charting of free trade ‘Cobden clubs’ in the United States. But the reviewers raise two general questions about the book’s Listian/Cobdenite framework. First, are List and Cobden the key theorists behind the U.S. tariff debate? Eckes wonders about the influence of classical theorists, such as David Ricardo, whereas Peart draws attention to home-grown advocates of free trade from Southern Jeffersonians to Northeastern mercantile constituencies in the Jacksonian period. Second, the reviewers wonder if the gap between ‘Listian’ protectionists and ‘Cobdenite’ free traders was as deep as Palen suggests. After all, Victorian era ‘free traders’ embraced revenue-generating duties and, on the other end of the spectrum, many protectionists, including List, viewed tariffs as temporary measures to redress asymmetries in the international system. “One might question whether the great debate between protectionists and free traders in the nineteenth century was as significant as Palen’s account suggests,” Eckes writes.

This roundtable review is very much worth reading. Its richness is testament to the quality of The “Conspiracy” of Free Trade. Thanks to Palen’s imaginative and ambitious study, scholarship on the old topic of the tariff will be reignited. And just in time. The recent (and frightening) re-emergence of protectionism in our current age demands that scholars look again at the historical roots of debates over tariffs and trade.


Marc-William Palen is a historian at the University of Exeter. His articles have appeared in Diplomatic History, the Journal of Imperial & Commonwealth History, the Historical Journal, the Journal of the Civil War Era, and the Journal of the History of Economic Thought, among others. He is editor of the history blog The Imperial & Global Forum, and is currently writing an international economic history of the twentieth-century peace movement.

Jay Sexton is Kinder Institute Chair and Professor of History at the University of Missouri, as well as Emeritus Fellow at Corpus Christi College, Oxford. He is currently at work on a study of the transnational and transimperial steam networks of the second half of the nineteenth century.

Alfred E. Eckes, Jr., is Eminent Research Professor Emeritus in History, Ohio University, Athens, Ohio. From 1981 to 1990 he was a Commissioner (Chairman, 1982-1984) on the U.S. International Trade Commission (ITC). Eckes is the author of nine books on economic and international trade history. They include The Contemporary Global Economy: A History since 1980 (Wiley-Blackwell, 2011), U.S. Trade Issues: A Reference Handbook (ABC-CLIO, 2009), and Opening America’s Market: U.S. Foreign Trade Policy since 1776 (University of North Carolina, 1995).

Daniel Peart is a Lecturer in American History at Queen Mary University of London. He received his doctorate from University College London in 2011. His first book, Era of Experimentation: American Political Practices in the Early Republic was published by University of Virginia Press in 2014, and was followed by an essay collection, Practicing Democracy: Popular Politics in the United States from the Constitution to the Civil War, co-edited with Adam I.P. Smith and published by the same press in 2015. He has also published in Journal of the Early Republic, and has articles forthcoming in Journal of the Civil War Era and Common-Place. His current project examines lobbying and the making of U.S. tariff policy between the War of 1812 and the Civil War.

David Sim is Lecturer in U.S. History at University College London, specialising in U.S. foreign relations in the long nineteenth century. He received his doctorate from the University of Oxford in 2011. A Union Forever: the Irish Question and U.S. Foreign Relations in the Victorian Age was published by Cornell University Press in late 2013. He is currently conducting research for a project looking at the statecraft of William H. Seward and his place in narratives of American imperialism.

Ian Tyrrell is Emeritus Professor of History at the University of New South Wales, Sydney, Australia. His books include Woman’s World/Woman’s Empire: The Woman’s Christian Temperance Union in International Perspective, 1880-1930 (1991); Reforming the World: The Creation of America’s Moral Empire (2010); and Transnational Nation: United States History in Global Perspective since 1789 (rev. edn., 2015). He is working on a history of American Exceptionalism as an idea.

Review by Alfred E. Eckes, Jr., Ohio University, Emeritus
Congratulations to Marc-William Palen for his effort to revive interest among historians in nineteenth-century tariff and trade policy. His interpretation offers another thoughtful response to those Open-Door revisionists who have interpreted United States expansionism as the imperialism of free trade. Palen, a scholar of imperial history, claims it was an imperialism of economic nationalism, and he identifies German economist-polemicist Friedrich List as an important, intellectual influence on American policy.

I like the way Palen has restructured, and personalized, the longstanding debate between advocates of free trade and protectionism. He turns the spotlight on two rival trade propagandists–Richard Cobden, the English textile manufacturer and free trader, and List, the German-American economist, who argued that backward industrial countries required tariff protection until they had climbed the ladder to compete successfully with established industrial countries, like Great Britain. Palen presents the conflict between these two individuals, and their followers, as an ideological, political struggle. It is Cobden’s cosmopolitanism against List’s economic nationalism, a conflict that arguably continues into the twenty-first century.

Palen shows that Cobden and his followers established transatlantic Cobden Clubs to promote free trade, and that List’s nationalistic arguments also empowered anti-Cobden groups. In the 1884 the Cobdenites succeeded in helping to elect Democrat Grover Cleveland, and Palin shows that Cobden-Club members in the President’s cabinet and among the his close advisors shaped his tariff recommendations and the anti-imperialism of his foreign policy.

In Palen’s view, much Republican support for high tariffs in late nineteenth-century America should be described as Listian nationalism. He identifies public officials James G. Blaine and William McKinley, as well as economist Henry C. Carey, as the period’s leading Listian “protectionist intellectuals” (xvi). But, Palen does not demonstrate that Blaine and McKinley were familiar with, or inspired by, List’s writings.

This book may appeal to diplomatic historians and historians of British imperial history. For readers with a foundation in economic thought, and familiarity with tariff terminology and congressional tariff writing, the book’s analytical and research shortcomings will be more apparent. Palen does not define rigorously, or explain persuasively the theoretical case for, free trade. Nor does he attempt to evaluate the economic soundness of the Cobdenite arguments. He indicates simply that Cobden, the propagandist, believed that free trade promoted international peace and domestic prosperity.

I am surprised that Palen does not focus more on the classical economists who provided the intellectual foundation for the free-trade crusade. He might have summarized Adam Smith’s arguments for specialization of production or absolute advantage, and commented on David Ricardo, the stock broker, who devised the theory of comparative advantage, one of the keys to free-trade theory. The omission of Ricardo from this book is noteworthy, for in his famous two-country, two-product model involving Britain and Portugal, Ricardo demonstrated deductively how a country could benefit from free trade even if it was less efficient in the production of both products. It is not clear from Palen’s account whether Cobden and his followers understood the theoretical arguments of Smith, Ricardo, and other classical economists, but these economists made the case for free trade compelling to many intellectuals and government officials on both sides of the Atlantic.

It is also difficult to understand why Palen ignores the London-based Economist, the prestigious news weekly founded in August 1843 for the purpose of espousing free trade to readers in Britain and overseas. Cobden, as major financial supporter, was instrumental to the launching of that publication.

Palen chooses to identify List as the archetypical protectionist, yet in his writings, as Palen acknowledges, List saw free trade as the ultimate objective after a period of infant industry development. Henry Carey (1793-1879) of Philadelphia arguably had far greater influence on U.S. public policy after the Civil War than did List who died in 1846.

It is not clear how, if at all, Cobdenism and Listian nationalism shaped congressional tariff debates or the writing of individual tariff bills. It has been my experience in government that on tariff matters legislators generally respond to specific needs and requests from constituents and lobbyists, not to the words of propagandists and ideologues.

The book’s discussion of tariffs would have benefitted from more precise language. For example, he says that the McKinley Tariff had “an ad valorem rate of nearly 50%” (207). But, the McKinley Tariff was composed of both specific duties (for example, 2 cents per pound) and ad valorem duties (as a percentage of value). The 50% rate is an ad valorem equivalent rate, a calculation that involves translating specific duties to ad valorem duties and combining the results. Because over half of U.S. imports under the McKinley Tariff arrived duty free, it is important to note that the average ad valorem tariff equivalent on both dutiable and non-dutiable goods was about 23%, quite different from the 50% rate that Palen states. Of course, neither of the approaches described above captures the protective effect of goods effectively excluded from the U.S. market.[2] 

This technical point raises a larger issue. Were the American Cobdenites really free traders, or were many of them cryptic protectionists? As Palen notes, free traders in the nineteenth century were not usually purists who favored zero duties. Instead, many of them favored a tariff for revenue-only, a very imprecise concept. In 1846 tariff-for-revenue-only advocates accepted a 20% ad valorem equivalent in the Walker Tariff.[3] The foreign press did not always understand the difficulty of lowering U.S. tariffs toward free-trade levels. During the election of 1888, for example, The Economist alleged that free-trade Democrats who sponsored the so-called Mills bill lowering average tariffs on taxed goods from 47% to 42.5% were protectionists, not free traders.[4] One might question whether the great debate between protectionists and free traders in the nineteenth century was as significant as Palen’s account suggests.

By today’s standards all but the free-trade purists in the nineteenth century were protectionists. In the twenty-first century average ad valorem equivalents for the tariffs of major tradingcountries are less than 3 percent according to the World Bank.[5] Today one is labeled a protectionist if he or she favors a higher rate, even one less than many nineteenth-century free traders considered to have been free trade.

Upon first reading I was impressed with the breadth of Palen’s research and his extensive footnotes. It seemed that he had successfully used newly available digital databases and turned up everything relevant to free trade and protectionism. For scholars of my generation who endured long hours in the library examining pages of microfilm with resulting headaches and eye strain, the new tools are awe inspiring. Unfortunately, the new approach also has pitfalls, as I discovered when looking carefully at Palen’s notes. He apparently relied on databases that do not include articles published in The Economist, for I do not find that publication mentioned in his bibliography, index, or voluminous footnotes. This is difficult to explain since The Economist has covered trade debates over a longer period of time than any other English-language publication. My own Boolean searches of The Economist’s online archive revealed 715 articles containing the terms “free trade” and “America” between 1846 and 1896, and 2,276 including the words “tariffs” and the “United States” during the same period. There are also 140 articles dealing with “Cobden Clubs”. Thus, I am amazed that one would attempt to write a book or dissertation on Cobdenism and free trade without utilizing extensively back issues of this leading publication.[6]

Nonetheless Palen has done much good research, some of which is available only online from Cambridge University Press. In an online appendix I found a carefully prepared listing of Cobden-Club members. He identifies over 200 prominent members of the U.S. Cobden Clubs and provides biographical information. I was not surprised to find that the list included Professor Frank Taussig, the prominent Harvard University political economist and tariff scholar. He supervised the doctoral dissertations of many influential international economists, including Harry Dexter White, Jacob Viner, and others, who shaped U.S. trade and international economic policy in the mid-twentieth century.

Taussig was a major figure in U.S. trade history both because of his writings and his government service. In 1917 President Woodrow Wilson, a low-tariff enthusiast, named him the first chairman of the U.S. Tariff Commission. The president did so, apparently thinking that Taussig would advance and extend the free-trade agenda of the low-tariff Manchester School. Thus, Palen’s research on Cobdenism may help scholars understand some of the intellectual influences on trade policy in the interwar period. By the 1930s students of the academic Cobdenites were on the front lines of government waging Secretary of State Cordell Hull’s crusade for freer trade.

Review by Daniel Peart, Queen Mary University London
In The “Conspiracy” of Free Trade, Marc-William Palen explores how an ideological struggle over free trade versus protectionism meshed with contemporaneous debates about imperialism within a context of Anglo-American rivalry on a global stage, and what impact that struggle had on United States politics and policymaking, both foreign and domestic, across the latter half of the nineteenth century. And he does all this in under 350 pages. That alone is a remarkable achievement, but Palen deserves further credit for not only providing a new synthesis of these several inter-connected topics, but also offering a convincing challenge to the conventional identification of Gilded Age America with a bipartisan commitment to laissez-faire government at home and ‘open door’ economic expansion abroad.

Palen sets out to answer three questions: “how Victorian free-trade cosmopolitanism reached and influenced American domestic and foreign relations; how economic nationalists opposed Cobdenism in the United States and the British Empire; and how these conflicting ideologies shaped Anglo-American relations, imperial expansion, and economic globalization” (xviii-xix). Throughout the book these conflicting ideologies are classified by two figureheads. Richard Cobden, “Victorian England’s free-trade apostle,” provided the name and inspiration for an “influential group of Victorian America’s liberal reformers” who believed that “international freedom of trade and a non-interventionist foreign policy would lead to domestic prosperity and world peace” (xvi). In the opposing corner, it was the lesser-known German-American economist Friedrich List who laid the intellectual groundwork for a “progressive (i.e. forward-looking and reform-oriented) economic nationalist doctrine that viewed free trade as an ultimate ideal stage of economic development, and the coercive acquisition of foreign markets an eventual necessity for surplus goods and capital” (xvi-xvii). This faith in overseas markets set its adherents apart from the orthodox home-market protectionists who had predominated during the antebellum era, but crucially both groups continued to argue for the importance of tariff barriers to sustain and encourage American producers, a device that was anathema to their free-trade adversaries. And it was the final victory of Listian nationalism, Palen argues, that “paved the way for the positivist and activist Republican imperial governance of the early twentieth century” (269). Cobdenite cosmopolitans, far from endorsing a “bipartisan market-driven course to empire” as previous historians have assumed, actually fought long, hard, and ultimately in vain against the “regionalized, protectionist, closed-door imperial approach to American global economic integration” that was embraced by the McKinley administration following the pivotal election of 1896 (269-270).

This is a fascinating story, and its one that Palen tells with admirable clarity and concision. Each of the nine main chapters deals with a different, and often quite diverse, subject, but the central organising theme of Cobdenite-Listian conflict remains always in focus. The first chapter seeks the origins of that conflict in the antebellum United States, and shows how the two rival camps were able to temporarily submerge their differences in the North under the anti-slavery banner of the Republican Party. Chapter Two examines the efforts made by Southerners and their sympathisers elsewhere to present sectional divisions over trade policy, rather than slavery, as the true cause of the Civil War, efforts that were encouraged by the unpopularity abroad of the highly-protectionist Morrill Tariff. Chapter Three traces the postbellum proliferation of the transatlantic free trade movement, exemplified by American membership in London’s Cobden Club and the creation of the American Free Trade League in New York, which was met in turn by protectionist charges of conspiracy that played to a persistent Anglophobic strain in American politics. The fourth chapter then tracks continuing debates over the tariff through the party realignments of the 1870s and early 1880s, during which time “free-trade independent Republicans became vocal anti-imperial critics of the Republican party’s early implementation of the imperialism of economic nationalism” (86).

Ideological divisions over empire gain additional importance in the second half of the book, as the United States begins to flex its muscles beyond its continental borders. Chapter Five tackles the first presidency of Grover Cleveland, the only Democrat in the White House during this period, and shows the influence that free traders exerted in steering his administration away from the aggressive Open-Door policy pursued by his Republican counterparts. Chapter Six offers a different perspective by exploring the concurrent struggle between Cobdenite and Listian forces across the border in British North America, which centred on the question of whether to seek commercial union with the United States or further integration within the Empire. The seventh chapter returns to Washington, where “from the McKinley Tariff to imperial designs in the Caribbean and the Pacific, the Harrison administration’s imperialism of economic nationalism…laid the progressive protectionist groundwork for the American empire building of 1898 and beyond” (204-205). Chapter Eight provides “a global history of the McKinley Tariff’s impact upon the British Empire,” which Palen identifies as enhancing intercolonial unity and encouraging the beginnings of a reaction against the free-trade consensus which had reigned in Westminster for the previous half century (209). Finally, Chapter Nine brings the period, and Palen’s thesis, to its conclusion by telling how American Cobdenites once again set aside their differences with their Listian counterparts to put down an economically-unsound Populist insurgency in the 1896 election, but at the cost of elevating the author of the McKinley Tariff to the presidency and leaving protectionist-imperialists firmly in control of the nation’s future.

Having praised Palen for accomplishing so much, it seems churlish to criticise him for omitting anything; I trust therefore he will excuse the churlishness which follows as testament to the enthusiasm which The “Conspiracy” of Free Trade inspires for its subject. As someone whose interest in policymaking is matched by his ignorance of Gilded Age politics, the most important dimension that I would like to know more about is that of power, and specifically its exercise through the agency of the men who made American policy during this period and the processes which governed their actions. As Palen makes explicit at the outset, his book offers “an ideological approach to understanding nineteenth-century Anglo-American imperial expansion, politics, and economic globalization” (xix–my italics). Institutions and interests – the two other elements to the policymaking equation that most frequently attract the attention of historians and political scientists – receive comparatively little notice. Indeed, while Palen introduces us to a vast cast of characters – economists, intellectuals, editors, diplomats, presidents and their administrations – very few belong to the class of lawmakers entrusted with the task of actually writing and enacting tariff legislation in Congress, or the “special interest groups and lobbyists” that, as the author acknowledges, “wielded great influence upon government policies and agencies” (xxvii).

Palen’s approach is perfectly reasonable, since space is at a premium, and he makes no claim to have detailed every minute aspect of policymaking during this period; the McKinley Tariff, central to his thesis, receives only seven pages coverage, and all the remainder combined probably do not add up to another ten. However, on occasion it does make some of his explanations of causation less convincing, or leaves the impression that something important is missing. So for example, after spending several pages discussing how efforts to mobilise public opinion over William R. Morrison’s ‘Peelite’ tariff reduction bill of 1884 were tied in with legacies of the antislavery movement, Palen notes almost in passing that it was actually “massive wage cuts and strikes owing to another economic downturn alongside the intractability of economic nationalists in Congress” which “made certain that the bill would not become law” (126). Similar, but even more important for his thesis that “the future of American economic globalization…rested upon this political-ideological debate [between Cobdenites and Listians],” is the case of the 1896 election (270). As Palen’s final chapter reveals, McKinley won that election with the support of many Cobdenites, following a campaign in which the tariff question was completely subordinated to the titanic struggle over ‘free silver’ versus the gold standard. Would it not be truer to say, then, that rather than winning the political-ideological debate, Listians simply won the political power that allowed them to transform their rhetoric into reality, making the debate itself, practically speaking, irrelevant? Perhaps leading Cobden Club member Edward Atkinson was right when he lamented, following defeat of the Morrison Bill in 1884, that in American politics “reason will not prevail” (127).

My second observation, which reflects my own interest in the antebellum era, concerns the origins of Cobdenism in the United States. Palen sets up that ideology in counterpoint not just to the protectionism of its Listian opponents, but also to a ‘Jeffersonian’ free trade tradition which preceded it. “American Cobdenism’s first subscribers came primarily from the country’s growing manufacturing centers in the Northeast and West rather than in the South, where the agrarian-based free-trade tradition of Jeffersonianism had held sway for so long,” he explains, adding that “Cobdenism was a different strain of free-trade ideology, one that took root in the 1840s among northeastern abolitionist Anglophiles rather than within the slaveholding Anglophobic South” (268). By dating this development to the 1840s, however, and making Cobden its transatlantic idol, Palen disregards a homegrown mercantile free-trade constituency that had taken root in Northeastern cities like New York and Philadelphia, as well as much of New England, at least as early as the Revolution. The Philadelphia Chamber of Commerce organised the United States’ first general free-trade convention in 1820; only twenty-three delegates attended, from eight states, but it still predated national party nominating conventions by a decade.[7] In 1831 a second free trade convention, also in Philadelphia, attracted over two hundred delegates from fifteen states, half of them north of the Mason-Dixon Line, and its memorial to Congress was written by the septuagenarian Albert Gallatin, who had served as Secretary of the Treasury to the Jefferson and Madison administrations.[8] The contribution that this earlier generation of Northern free traders made to debates over the tariff, albeit at a time when protectionism was in the ascendancy, should not be neglected.

I also doubt whether the ‘Jeffersonian’ and ‘Cobdenite’ traditions are as distinct in practice as Palen suggests. John C. Calhoun was a Southerner, and certainly no abolitionist (nor, incidentally, a devotee of Jefferson), but he admired Cobden, sent him copies of his free-trade speeches, and enthused about the possibility of an American delegation attending the international Free Trade Congress in Brussels in 1847.[9] And Cobden himself also hesitated to adopt the same clear identification of free trade with American antislavery that Palen argues for here. “We [the English] observe a mighty quarrel: on one side protectionists, on the other slave-owners,” he wrote to a transatlantic correspondent on the outbreak of the Civil War. “The protectionists say they do not seek to put down slavery. The slave-owners say they want Free Trade. Need you wonder at the confusion in John Bull’s poor head?” (40). It is beyond dispute that the American Free Trade League and its Gilded Age auxiliaries were dominated by Northerners from an antislavery background, but then how many proslavery Southerners would you expect to find in any area of national public life following the Civil War? The distinction that Palen draws between the expansionist pretensions of Calhoun’s slaveholding masterclass and the anti-imperial preferences of Cobdenism is a useful distinction in principle, but the geographic composition of the postwar free-trade movement probably reflected practical political realities more than any ideological incompatibility with Southern values. As Palen acknowledges, “the South, undergoing its own vast economic, political, and social upheaval, had ample issues besides that of free trade to keep its attention” (71).

In essence then, the issues I have with The “Conspiracy” of Free Trade derive from its ideological approach, and the difficulty of mapping those neat distinctions of principle onto the messy business of policymaking. Paul Conkin concludes his study of America’s First Political Economists, which in some respects provides an antebellum counterpart to Palen’s work, by voicing his “doubt that arguments drawn from one or another system of political economy had much to do with the basic policy preferences of politicians,” and I share that scepticism.[10] But that still does not diminish my enthusiasm for a book which effectively conveys the drama inherent in a clash of two competing ideologies, expertly translates complex matters of dry political economy into highly readable prose, and offers a fresh, transnational perspective on a topics that will previously have been familiar to most American historians only in isolation.

Review by David Sim, University College London
When I started as a graduate student, a senior member of the profession told me that the only thing worth studying in the nineteenth century was the Civil War. Then he paused, sneered, and added “that and the tariff, I suppose.” It is to Marc-William Palen’s great credit that he has written a book about the latter that dismisses that dismissal. In this sweeping study of the transatlantic contest over free trade and protectionist ideas Palen takes in the rich associational life of anti-slavery activists; the antebellum peace movement; the diplomacy of the Confederacy; the shifting ideological outlook of the Republican Party; transatlantic communications; the retooling of antislavery rhetoric in the service of both free trade and protectionist politics in the 1880s; the redirection of abolitionist energies after the Civil War; imperial federation; and, most importantly, the way in which historians write about American empire.

Palen’s goal is “to offer a much-needed reinterpretation of Anglo-American political economy, ideology, and empire” that debunks the image of the period as one of “laissez-faire and free trade, a misimpression that has seeped into the dominant American imperial narrative” (xv-xvi). The book focuses on two competing visions - “Cobdenite cosmopolitanism” and “Listian nationalism”—that framed the debate over economic globalisation in the second half of the nineteenth century (xvi). The former prioritised “international freedom of trade and a non-interventionist foreign policy” in the belief that peaceful international relations would shadow increased commercial interaction (xvi). The latter combined Anglophobia, a commitment to shielding infant industries, and the faith that, whilst free trade was the “ideal stage of economic development” its adoption in the short-term would stunt U.S. economic growth (xvi). This came with two corollaries: one was a commitment to “the coercive acquisition of foreign markets… for surplus goods and capital” (xvi-xvii). The other was the misplaced conviction that those Americans pushing free trade were “part of a vast, British-inspired… conspiracy” (xix).

As this suggests, The “Conspiracy” of Free Trade covers a great deal of ground. Chapter One introduces Cobden and List and explores the percolation of their ideas in the 1830s and 1840s. Support for Cobden’s ideas, Palen writes, overlapped significantly with support for anti-slavery politics and competed with an older, Jeffersonian tradition that made central the economy of the plantation south. A commitment to free soil, free labor and free men led Listians and Cobdenites—otherwise ideological antipodeans—into “a fair-weather friendship” under the banner of the Republican Party in the mid-1850s (29). Chapter Two demonstrates that the adoption of the protectionist Morrill Tariff sowed confusion amongst British observers hoping to discern the true cause of the Civil War and, more importantly for Palen’s narrative, began the process of alienating free-trade Republicans.

Chapter Three focuses on the activities of the American Free Trade League in 1866, its connections with London’s Cobden Club, and the development of a conspiracist critique of American free traders. Chapter Four outlines their failed efforts to remake the postbellum Republican party “into one of free trade, anti-imperialism, and civil service reform” (83). This chapter contains some of the most interesting and compelling parts of Palen’s analysis, as Republican Listians began to squeeze more conventional home-market protectionists and the handful of remaining free-traders out of the party. Ironically, this occurred shortly after Cobden Club member James Garfield had secured the Republican Party’s nomination as president. Whether his free trade proclivities would have been given free rein in the White House or not—and Palen is ambivalent on this point—his untimely death in September 1881 came at just the point that ‘Listian nationalists’ like Republican statesmen James Blaine and John Kasson were sharpening their critique of British informal imperialism in Latin America.

Chapter Five details the contest between Blaine and Grover Cleveland in 1884 and outlines the latter’s “non-interventionist approach to foreign affairs” (135). Chapter Six asks the provocative (and, for British and Irish readers, timely) question as to whether one place can belong to two unions at the same time, as it focuses on Canadian and U.S. debates around ideas of imperial federation and closer U.S.-Canadian commercial union. Chapters Seven and Eight examine the formulation, passage and impact of the McKinley tariff. Of particular interest here is the way in which the tariff further animated ongoing debates about imperial federation, an idea which moved from the fringes to the mainstream of political discourse with long-term implications for London’s relations with Britain’s white settler colonies. Chapter Nine rounds out the book as the contest over free trade was eclipsed by that over the gold standard, with the Cobden Club going as far as to admit its relief at the election of the protectionist McKinley over his pro-free-trade opponent, William Jennings Bryan (266).

Palen’s key argument comes in two parts. The first sees a return to Oliver MacDonagh’s critique of Ronald Robinson and John Gallagher’s work on British informal imperialism, published as “The Anti-Imperialism of Free Trade” in 1962, and its revival in U.S. historiography (xxxv).[11] MacDonagh argued that Robinson and Gallagher’s elision of formal and informal imperialism was unhelpful in understanding the contingency of British imperial expansion in the nineteenth century, and that mid-Victorian free traders were often strong critics of both flavours of imperial power. Palen is similarly critical of the fuzziness that accompanies that elision, which leads historians to emphasise consensus over contest. Thus, The “Conspiracy” of Free Trade offers a cautious upwards revision of Grover Cleveland’s reputation, noting that contemporaries did not identify the imperial continuities with Presidents Chester A. Arthur, Benjamin Harrison, and William McKinley that revisionist historians like William Appleman Williams argue for in their histories of late nineteenth century imperialism.[12]

Second, Palen gives us a history of the evolution of his concept of “the imperialism of economic nationalism,” which featured in his article for Diplomatic History in January 2015.[13] There he investigated the way in which this combination of high tariffs and the opening of new markets through aggressively-framed reciprocity agreements led the Republican Party towards formal imperialism in the late 1890s. Here, Palen offers a useful genealogy of the concept, noting the intraparty battles and the intellectual debates from which it emerged. One of the effects of more sharply delineating the Democratic and Republican parties—and the debates within them—is to heighten the importance of contingency in the development of American imperial practice. Put another way, Palen gives us a clear account of Listian economic thought and the way in which Republican policymakers conceptualised it through the late nineteenth century, but translating those ideas into practice was a messy, uncertain process, relying on shifting coalitions and domestic electoral success.

It is to his credit that, despite this wide range, the book never feels superficial. Nevertheless, because of its wide range it necessarily raises big questions. Palen is convincing in pointing to the tariff as an understudied topic with important resonance in multiple fields of nineteenth-century history, and his thoughtful resuscitation of the history of political economy is welcome. However, given his attentiveness to the literature on what is often called the British world, I would have liked to have seen a little more reflection on the ‘new imperial histories’ and their emphasis on seeing the centre and the periphery in the same frame.[14] Specifically, what happens if we eschew an inside-out account of U.S. imperial power in favour of one that emphasises collaboration, collusion and syncretism? What did those who were subjects of American economic policy in the rest of the Americas make of this ongoing contest over Listian and Cobdenite ideas, and did they make efforts to cultivate particular intellectual and political relationships with this debate in mind? Was there a Cobden Club in Buenos Aires? Or Mexico City? And, whatever the answer is, does it strengthen or undercut the idea of a ‘British world’, a notion that historians—though not Palen—sometimes use reflexively and without precise definition.

In addition, I wondered about the links with contemporary debates over protectionism and the limits of globalization.[15] My bet is that the connection between the Victorian “free-trade tradition” and “today’s… neoliberal order” is not quite as clear-cut as Palen describes (xi). Might we trace a competing “Listian” narrative? In this alternative reading, capitalists, fearing diminishing returns in the face of constrained markets and labour militancy, turned to state power in order to prise open new markets and neuter worker unrest. Rather than the cosmopolitanism of free traders being the central story, perhaps we should focus on the connection, imperfect as it might be, of capital and state power—not to restate the arguments of William Appleman Williams and other New Left scholars that Palen so effectively critiques, but to better appreciate the relationships that shape our political economy.

Review by Ian Tyrrell, Emeritus, University of New South Wales, Sydney
Tariff Matters: U.S. Free Trade and Protectionist Policies in the Late Nineteenth Century and their Global Implications

Tariffs did matter. Marc-William Palen shows as much in this challenging and persuasive book on trade politics in the British and American world of the nineteenth century. For a generation, historians of the United States regarded the tariff as a deadly dull issue that reflected parish-pump politics and the principle that all politics is local. ‘Infant’ American industry demanded high tariffs, and among these economic interests were many uncompetitive or minor businesses. This highly politicized question certainly produced long and complicated tariff schedules, and the debates in Congress over tariff bills took up many pages of the Congressional Record while filling the Senate and House of Representatives with a great deal of hot air. Though principles were invoked, historians suspected that bare-faced, special interests prevailed in a nineteenth-century parceling up of the pork barrel. These unseemly deals would interest a Charles Beard familiar with the nitty-gritty of economic and political ‘interests’, but the generation of historians from the mid-1970s to early 1990s mostly steered clear.[16] Since that time, work by Steven Topik, Paul Wolman, Mary Speck and others has rekindled interest. The impact of post-1980s globalization is detectable in this revived concern, which has also led American historians to put the tariff question in a more comparative and international history frame.[17] Palen’s work is exemplary of the new approach.

Modern economists have told us that tariffs are not only inefficient, but also ineffective, and, at most, minor contributors to economic growth.[18] Palen indirectly comments on this technical and theoretical issue by grounding free-trade ideas in social and political processes better than existing accounts do, but he more easily demonstrates the political importance of tariffs and the cultures attached to them. He ably sketches the shifts in the coalitions supporting or opposing free trade and takes the arguments of advocates with admirable seriousness to convey the context of the debates.

Despite modern economic theory, tariffs did add value to particular industries and regions, and they had international ramifications. One of the key strengths of Palen’s book is that he does attempt an international history of the U.S. tariff struggles of the era of Republican ascendency, particularly the 1870s to 1890s. He characterizes the Republican Party’s growing attachment to the issue as a response not only to shifting internal American conditions but also to the economic context of a global economic trough that, he argues, covered the period from 1873 to 1896 (86, 207). Palen shows the impact of stiffening U.S. trade policy on Britain and its empire in this period. While this question cannot be considered to be separate from the tariff policies of European countries, Palen demonstrates the American tariff’s global implications for political democracy and global growth principally through the impact on Britain and its colonies such as Australia and Canada. The latter naturally receives considerable attention as the nation’s northern neighbor. Tariffs were used as a weapon in the struggle for imperial domination of the new, globalizing economy, a conflict with political ramifications.

Republicans hoping to attract western states in the 1888 election contributed to tariffs that, for example in the case of those on wool, damaged the sheep industry in other countries, notably Australia (219-220). According to Palen, the push for imperial federation and empire tariff reciprocity grew from such economic impacts. Moreover, the decision to create all-red (imperial) shipping and cable routes received impetus from the perceived need to guard against growing American economic and political power enhanced by Republican Party tariff maneuvers. Yet there were also strategic aims in such telegraphic and transportation infrastructure. The Spanish-American War revealed the difficulties of communicating quickly to faraway fleets and spurred the decision to create an all-American cable route, at approximately the same time as the British cable across the Pacific to British Columbia was laid. Geopolitics thrived in the high tariff environment, and vice versa.

To state the obvious, while the power of the U.S. tariff to do damage outside the country was palpable, foreigners did not vote in American elections. Within the United States, protectionists held sway for most of the time from the 1860s through to World War II. Palen is not simply considering here customs tariffs, which had much earlier existed in the United States but the development of what he calls “economic nationalists” and their “Listian” system – with an intellectual inheritance going back to the German political economist Friedrich List. Other authors have noted the influence of List but Palen goes further in elaborating on the influence of their ideas as a system of thought, not simply a particular economic interest.[19]

American Listians aimed at the hoarding of national wealth and promotion of economic growth in which the state used high tariffs as weapons to lever open foreign markets. “Listian” serves well as an authorial shorthand to convey the cluster of trade and related issues discussed, though some historians will doubtless wish to contend over how coherent in the face of practical political pressures the Listian system was. Palen’s book itself illustrates these complexities. And, as I argue below, one needs to take account of “Listian” tendencies as a broader reform agenda beyond the economic and political realms of the tariff, and beyond the period of his study. Palen shows that it would be wrong to see these arrangements as simply concerned with freer trade. They aimed at promoting American exports while making sure that tariffs encouraged the kinds of imports that supplemented rather than competed with American industry, thus making the American nation and proto-empire stronger.

This is the most important argument in the book because it enables Palen to make a severe dent in the Open-Door thesis as an underlying explanation for U.S. foreign policy. He demonstrates the importance of economic nationalism and the use of tariff and reciprocity treaty policy in the shaping of a distinctive American empire based on a strong home market and exports that were disruptive for the world economy through punitive reciprocity provisions for imports, where American access abroad was denied or inhibited.

At the same time, Palen is able to portray the advocates of free trade as self-conscious, internationally oriented Cobdenites. Favouring limited government and the free trade policies espoused by British parliamentarian and manufacturer Richard Cobden, the American Cobdenites’ association with British free trade models made them targets for the Anglophobia frequently raised in nineteenth-century American elections. Such tactical moves related to the charge Listians made that free trade was a ‘conspiracy’ of the British empire to dominate the world. The role of the Irish question in sustaining small ‘r’ republican sympathies and anti-British feeling is well known, but Palen shows how Anglophobia could be harnessed to an economic issue other than the well-known examples of banking and investment. The relationship between Anglophobia and the combatants in the trade politics of the United States was evidently a complex and shifting one, though, since acquiring overseas colonies brought American Listians to a greater appreciation of Anglo-Saxonism in the 1890s.

The American Cobdenites’ natural inclination and logical pathway was to oppose a series of American imperialist activities post-Civil War. These ranged from the proposed annexation of Santo Domingo in the early 1870s to the establishment of formal colonies and protectorates in the Pacific and Caribbean in 1898-99. This portrait enriches our understanding of anti-imperialism’s importance as a doctrine in American foreign policy, especially during the two terms of Grover Cleveland. Advocates of free trade, such as prominent businessman Edward Atkinson, were adamant that the United States should not engage in territorial acquisitions abroad. He argued that free trade would prevent wars and also provide the United States with enhanced foreign markets for manufacturing.

The implications of Palen’s book are intriguing for the period that immediately succeeded the Gilded-Age focus of his study, the Progressive Era. Imperialism ought not to be considered purely in terms of wars and territorial acquisition, to be sure. The American empire possessed these characteristic aspects of formal empire in the colonial moment of 1898, but moved the balance by 1910 towards indirect financial controls as the preferred option. It is not clear that American Cobdenites, at least those in Congress, would have opposed such moves in the way they did formal sovereignty. Some turn of the twentieth-century anti-imperialists drew a distinction on this point, as the Democratic Party platform of 1900 showed. It opposed U.S. acquisition of overseas colonies and pursuit of high tariffs, but favored “the immediate construction, ownership and control of the [proposed] Nicaraguan Canal by the United States” and took a similar line on the 1900 draft of the Hay-Pauncefote Treaty (1901), to protect coastal U.S. shipping interests through preferential treatment.[20]

The economic nationalist thesis also has relevance for the issue of rational allocation regarding so–called ‘natural’ resources in the early 1900s, and perhaps earlier too. Though not discussed in this book because it goes beyond the chronological limits and topical conceptualization, the American conservationist movement seems quite Listian in its promotion of reciprocity in the Payne-Aldrich Tariff of 1909. The Taft and Theodore Roosevelt administrations both tried to bend the tariff to accommodate a rational natural resource program for American benefit. Simultaneously the chief architect of American conservation policy from 1898 to 1910, Gifford Pinchot, sought to reconcile importing foreign lumber with the promotion of international conservation in forestry. This would require a degree of international regulation of resource use potentially at odds with both Cobdenites and Listians.[21] As Palen notes, Theodore Roosevelt was a Listian convert in the 1880s, but as President he developed a different emphasis on the use of trade and tariffs from the protectionists of that period. This policy change is little studied, but would seem to invite historians to consider tariffs and resource policy together.

If Palen’s work has important heuristic implications for the Republican Party’s political economy beyond the nineteenth century, it also helps us to reframe contemporary globalization, and to tease out its roots in earlier times. In this perspective, a Cobdenite philosophy seems an important inheritance, as Palen points out, but not the only one. The expansion of the global economy and the freeing of trade, especially since the 1980s, has not been accompanied by a reduction in political intervention in the economic realm to benefit particular nationalist economies so much as the displacement of rivalry from tariffs to currency. But that is a story for another time, and it is a tribute to Palen’s ambitious and illuminating work that he can provoke such speculation.

Author’s Response by Marc-William Palen, University of Exeter
Thank you to Tom Maddux for organizing this roundtable, to Jay Sexton for contributing the roundtable introduction, and to Ian Tyrrell, Daniel Peart, Alfred Eckes, and David Sim for their thoughtful engagement with my book. Their compliments, criticisms, insights, and questions have caused me to reflect upon the book’s findings in new ways and point to numerous areas for further exploration.

The conflict between free trade and protectionism dominated the late-nineteenth-century American political arena like no other. And the stakes were high – the future of American economic globalization and empire-building rested upon the outcome. But it was not free trade and laissez faire that prevailed in Gilded Age America, despite this all-too-common Open Door portrayal. Rather, as a result of this conflict, the American imperial search for new markets was undertaken under the auspices of Republican economic nationalism. In other words, “tariffs did matter,” as Ian Tyrrell succinctly puts it before proceeding to summarize the book’s scale and scope far better than I ever could. He then points to how the book’s imperial system might be applied beyond the economic and political realms, as well as beyond the book’s chronological framework. His discussion of the book’s possible implications for the Progressive Era conservationist movement is an insightful and illustrative example of this observation, and I will be sure to bear in mind his open invitation to consider resource policy alongside that of the tariff as I move my research forward. Tyrrell’s statement about the dynamics of Progressive anti-imperialism, in turn, carries with it a note of caution regarding how far Cobdenites in the halls of Congress may have opposed American informal imperialism at the turn of the century. This cautionary note is all the more timely as I am currently exploring this very subject in my new book project on the twentieth-century peace movement.

At the heart of The “Conspiracy” of Free Trade lies the contention that the long-ignored ideological conflict between free-trade cosmopolitanism and economic nationalism is central to understanding the intertwined histories of nineteenth-century Anglo-American imperialism and economic globalization. I begin my narrative with the arrival of Cobdenism upon American shores in the late 1830s and early 1840s, and its impact upon American westward expansion and party politics in the years leading up to the Civil War. Daniel Peart’s review treats mainly with these antebellum aspects of the book, and also draws attention to the burgeoning free-trade activity of New England and Philadelphia in the 1820s and early 1830s, which his book explores.[22] Although such activity falls outside of my book’s chronological bounds, Peart’s focus underscores my desire that early American histories of capitalism might continue to connect antebellum American political history with the transnational history of economic ideas. For example, I would be interested to know if this earlier “homegrown mercantile free-trade constituency,” as Peart describes it, had wed their free-trade advocacy to antislavery along similar transatlantic lines as the Cobdenites of the late 1830s and early 1840s. Where we differ is on the degree to which we ascribe power to ideas within politics and policymaking. And so I readily plead guilty to the charge that the role of ideas upstages those of institutions and interests in my narrative. Peart also raises interesting questions regarding the complicated relationship between antislavery and free trade within the antebellum Cobdenite movement, questions that tie into longstanding debates over the relationship between nineteenth-century capitalism, moral economy, antislavery, and imperialism that my book engages with, and that I have explored in greater detail elsewhere.[23]

Alfred Eckes centers his criticisms primarily upon what The “Conspiracy” of Free Trade leaves out. His suggestions for inclusion or elaboration doubtless would have strengthened the book. Regarding his points about earlier theories of free trade, as I state at the outset of the book, I made a conscious decision to keep the focus upon the economic ideas of the mid to late nineteenth century, although free-trade forerunners like Adam Smith and Jean-Baptiste Say or protectionists like Alexander Hamilton and Jean-Baptiste Colbert do make the occasional appearance, and I have explored the theories of Adam Smith and his influence upon Richard Cobden and the British Empire at length elsewhere.[24] Eckes’s points about the complexity of the 1890 McKinley Tariff’s ad valorem tariff are instructive; it might be worth revisiting the debates explored in the book surrounding, for example, 1890s Canadian-American economic integration to see if these complexities manifested themselves. As to the Economist, its absence is easily explained. Its archives were indeed extensively explored, and appeared throughout the dissertation upon which this book is based.[25] However, the difficult task of trimming 50,000 words from the manuscript meant the painful removal of many illustrative quotes and useful references; it so happens that my references to the Economist numbered among the casualties.

I will be the first to admit that tracing the history of ideas can often be a tricky business. I therefore took great care at the outset in providing boundaries and definitions as precisely as possible. And so while I agree with some of Eckes’s observations, I find others puzzling. For example, regarding Friedrich List as archetype, I describe in Chapters One, Three, and Seven how List’s progressive protectionist legacy was kept alive through Henry Carey (who echoed List’s vision for, as Eckes puts it, “free trade as the ultimate objective after a period of infant industry development”), Carey’s powerful circle of Republican politicians (which included James G. Blaine and William McKinley’s congressional mentor, William “Pig Iron” Kelley), and the influential German Historical School. And American Cobdenites were not just “propagandists and ideologues,” as Eckes describes them. Their numbers included not only news editors, journalists, businessmen, and academics, but also U.S. secretaries of state, war, agriculture, treasury, and the interior, as well as congressmen (including authors of low-tariff bills), and economic advisors who helped craft economic legislation. So while Eckes is quite right that I spend more time exploring how Cobdenites in Cleveland’s cabinets and “close advisors shaped his tariff recommendations and the anti-imperialism of his foreign policy,” those moments where Cobdenite activism contributed to legislative action are also noted (although to treat the latter with the attention it deserves would require another book). In the Introduction, I also took care to explain how the meaning of “free trade” has changed between the nineteenth century and today precisely to avoid the sort of presentism and confusion to which Eckes alludes. These points of contention aside, I hope, as Eckes does, that the book’s findings might also inform our understanding of twentieth-century U.S. foreign trade expansion – and bring to light the Victorian-era ideas that underpinned it.

With the United Kingdom’s economic future looking ever more uncertain following the Brexit referendum vote, David Sim’s perceptive review neatly draws out the book’s argument while also calling attention to the timely lessons that might be gleaned from the book’s exploration of the struggle between Cobdenite supporters of Canadian-American commercial union and Listian empire loyalists, who instead sought imperial trade preference and federation between the British Empire’s white settler colonies. In response to America’s imperialism of economic nationalism many of the key drivers for British imperial federation were working from the colonies (especially Canada) in order to influence British policymaking in London, a collaborative story that complements the decentering narrative of other “new imperial histories.” I agree that this connection could have been made clearer. And I second Sim’s suggestion that the story could feasibly be fleshed out even more by tracing the Cobdenite-Listian conflict beyond the British World by giving an outside-in view of the politico-ideological debate over imperialism and economic globalization, say, from Latin America. Sim concludes by speculating about whether the post-1945 “neoliberal order” might be seen as a Listian legacy more than a Cobdenite one. This is all the more intriguing today amid a global backlash against free trade that bears a striking resemblance to that of the late nineteenth century, where List’s ideas reigned triumphant across much of the developing world.

Many thanks again to the H-Diplo editors and to the roundtable contributors; I look forward to continuing the discussion and the debate.

[1] William Appleman Williams, The Tragedy of American Diplomacy (New York: W.W. Norton, 1959); Walter LaFeber, The New Empire: An Interpretation of American Expansion, 1860-1898 (Ithaca: Cornell University Press, 1963).

[2] U.S. International Trade Commission.  “U.S. Imports for Consumption, Duties Collected, and Ratio of Duties to Value, 1891-2013.” https://dataweb.usitc.gov/scripts/AVE_table_1891-2013.pdf (accessed 13 September 2016)

[3] Alfred E. Eckes, Jr. Opening America’s Market:  U.S. Foreign Trade Policy Since 19776 (University of North Carolina Press, 1995), 25.

[4] “The Coming Presidential Election in the United States.” The Economist, 1 September 1888, 1098-99.

[5] World Bank. http://data.worldbank.org/indicator/TM.TAX.MRCH.WM.FN.ZS (accessed 12 September 2016).

[6] The Economist Historical Archive 1843-2009. http://find.galegroup.com/econ/start.do?&econStoreUser=true (accessed 12 September 2016).

[7] Daniel Peart, Era of Experimentation: American Political Practices in the Early Republic (Charlottesville: University of Virginia Press, 2014), 86-88.

[8] The Journal of the Free Trade Convention, held in Philadelphia, from September 30 to October 7, 1831; And their Address to the People of the United States: To which is added A Sketch of the Debates in the Convention (Philadelphia, 1831).

[9] John C. Calhoun to Francis Lieber, Fort Hill, South Carolina, 27 June 1847; and John C. Calhoun to Henry Gourdin, Fort Hill, South Carolina, 29 July 1847, both in The Papers of John C. Calhoun, ed. W. Edwin Hemphill et al (Columbia: University of South Carolina Press, 1959-2003), 24: 422, 475-476.

[10] Paul K. Conkin, Prophets of Prosperity: America’s First Political Economists (Bloomington: Indiana University Press, 1980), 312.

[11] John Gallagher and Ronald Robinson, ‘The Imperialism of Free Trade’, The Economic History Review 6:1 (1953): 1-15; Oliver MacDonagh, ‘The Anti-Imperialism of Free Trade’, The Economic History Review 14:3 (1962): 489-501.

[12] See, for instance, William Appleman Williams, The Roots of the Modern American Empire: a Study of the Growth and Shaping of Social Consciousness in a Marketplace Society (New York: Vintage Books, 1970).

[13] Marc-William Palen, ‘The Imperialism of Economic Nationalism’, Diplomatic History 39:1 (2015): 157-185.

[14] See, for instance, The New Imperial Histories Reader, edited by Stephen Howe (London: Routledge, 2010); Catherine Hall, Civilising Subjects: Colony and Metropole in the English Imagination, 1830-1867 (Chicago: University of Chicago Press, 2002); Tensions of Empire: Colonial Cultures in a Bourgeois World, edited by Ann Laura Stoler and Frederick Cooper (Berkeley: University of California Press, 1997).

[15] Frederick Cooper, ‘Globalization’, in idem., Colonialism in Question: Theory, Knowledge, History (Berkeley: University of California Press, 2005), 91-112.

[16] Tom E. Terrill, The Tariff, Politics, and American Foreign Policy, 1874-1901 (Westport: Greenwood Press, 1973) provided a book-end to earlier discussions.

[17] Steven Topik, Trade and Gunboats: The United States and Brazil in the Age of Empire (Stanford: Stanford University Press, 2000), chapter. 1; Paul Wolman, Most Favored Nation: The Republican Revisionists and U.S. Tariff Policy, 1897-1912 (Chapel Hill: University of North Carolina Press, 1992); Mary Speck, “Closed-Door Imperialism: The Politics of Cuban-U.S. Relations, 1902-1933,” Hispanic American Historical Review 85:3 (2005): 449-484.

[18] Douglas Irwin, Against the Tide: An Intellectual History of Free Trade (Princeton: Princeton University Press, 1996).

[19] E.g., Lars Magnusson, The Tradition of Free Trade (Abingdon: Routledge, 2004), esp. 111-113.

[20] “Democratic Party Platform, 4 July 1900,” http://www.presidency.ucsb.edu/ws/?pid=29587 (italics added).

[21] Crisis of the Wasteful Nation: Empire and Conservation in Theodore Roosevelt’s America (Chicago: University of Chicago Press, 2015), 267n55.

[22] Daniel Peart, Era of Experimentation: American Political Practices in the Early Republic (Charlottesville: University of Virginia Press, 2014).

[23] Marc-William Palen, “Free-Trade Ideology and Transatlantic Abolitionism: A Historiography,” Journal of the History of Economic Thought 37 (June 2015): 291-304. For recent work on these issues, see, for instance, Simon Morgan, “The Anti-Corn Law League and British Anti-Slavery in Transatlantic Perspective, 1838-1846,” Historical Journal 52 (February 2009): 87-107; Richard Huzzey, Freedom Burning: Anti-Slavery and Empire in Victorian Britain (Ithaca and London: Cornell University Press, 2012); Matt Karp, This Vast Southern Empire: Slaveholders at the Helm of American Foreign Policy (Cambridge: Harvard University Press, 2016); Walter Johnson, River of Dark Dreams: Slavery and Empire in the Cotton Kingdom (Cambridge: Harvard University Press, 2013); John Majewski, Modernizing a Slave Economy: The Economic Vision of the Confederate Nation (Chapel Hill: University of North Carolina Press, 2009); Caleb McDaniel, The Problem of Democracy in the Age of Slavery: Garrisonian Abolitionists & Transatlantic Reform (Baton Rouge: Louisiana State University Press, 2013); and Brian Schoen, The Fragile Fabric of Union: Cotton, Federal Politics and the Global Origins of the Civil War (Baltimore: Johns Hopkins University Press, 2009).

[24] Marc-William Palen, “Adam Smith as Advocate of Empire, c. 1870-1932,” Historical Journal 57 (March 2014): 179-198.

[25] See Marc-William Palen, “The Conspiracy of Free Trade: Anglo-American Relations and the Ideological Origins of American Globalization, 1846-1896” (Ph.D. thesis, University of Texas at Austin, 2011), 55, 69-70, 130, 432, 473