July 25, 2024
Jacob Bruggeman
Free trade was foundational for the world order the U.S. and its allies designed as the Cold War waned in the late 1980s. At home, American politicians from Ronald Reagan to Bill Clinton touted trade liberalization as an engine growth and globalization that could lead to enduring peace. Intellectuals, pundits, and lookers-on were prone to more prosaic pronouncements: the end of history was nigh, the world was flat, the future had arrived. Capitalism and liberal democracy had triumphed over the planned economies socialist states—state-appointed tsars of communist simply couldn't keep up with the West's free flow of goods, people, and information. This well-worn Cold War narrative claims free trade as an American school of economic thought often associated with right-leaning advocates of free market economics. But this Cold War narrative obscures a much more interesting history.
Enter Marc William Palen, a historian at the University of Exeter who studies empire, globalization, and economic thought from the 19th century to the present. Palen's new book, Pax Economica: Left-Wing Visions of a Free Trade World, traces how ideas about free trade shaped and were shaped by nineteenth-century liberal radicals, socialists, feminists, and Christian pacifists in the British, American, Spanish, German, Dutch, Belgian, Italian, Russian, French, and Japanese empires. These movements used free trade to critique imperialism, militarism, and war while celebrating the possibility that trade could create a prosperous and peaceful world order—a "pax economica." As the rise of economic nationalism at home and abroad threatens to upend free trade, Palen's history challenges us to rethink what being a free trader meant in the past and our shared present.
— Jacob Bruggeman
Jacob Bruggeman: Pax Economica traces how arguments for free trade took different shapes in a global context. One way to begin unpacking this history might be to ask, if we were to sketch a picture of a “free trader” in, say, the 1890s, who might appear on the sketchpad?
Marc-William Palen: In the 1890s, the left-wing free trade movement was still largely a Euro-American phenomenon. If you were to dig into a lot of the historiography around this, what you'd end up with is a lot of studies about how free trade underpinned liberal imperialism, especially within the context of the British Empire. Indeed, some free traders were staunch defenders of the British Empire, or at least certain practices of the it. But what I show is that there's a much richer left-wing history of the anti-imperial dimensions of free trade in the 1890s and beyond. Understanding these left-wing dimensions forces us to rethink how we understand the global economic order of the late 19th and early 20th centuries. And that's why I start chapter one by setting up the economic nationalist imperial order. Because without understanding the economic nationalist dimensions of the global order of the late 19th century, it would be impossible to understand how so many left-wing internationalists subscribed to different variations of free trade. So, we've got the liberal radical center-left free trade radicalism of the anti-imperialists that associate themselves more with capitalism like Richard Cobden, and then the offshoots that come from that via a new generation of what we call Cobdenites or Manchester Liberals that gets an injection of motivation when Henry George, the American political economist, comes on the scene. George puts forward the idea of a single tax on land as a way of getting rid of all other forms of taxation, including all tariffs, even tariffs for revenue purposes only. Tariffs were the main way that governments obtained their finances back then, even in a free trade nation like Britain, which implemented tariffs for revenue. So free trade meant something different to people. There was the orthodox camp of people who supported tariffs for revenue only, and then free trade took on newer and more absolutist dimensions after the arrival of Henry George’s single tax movement. You've also got the cooperative movement that takes root in the Manchester area in England at around the same time as Richard Cobden's free trade movement, introducing a moderate, socialist, nonprofit version of free trade that cooperativists continue to advocate for across the late 19th and 20th centuries. So, by the turn of the century, we can understand left-wing free traders as divided into socialist variants, capitalist variants, and the book’s free-trade feminists and Christians fall into both camps.
The late-nineteenth century saw a flowering of free-trade thought that was generally opposed to economic nationalist, and perhaps neo-mercantilist, policy. One way your book helps us understand what — or who — free traders opposed is by pitting Richard Cobden against Fredrich List. Can you put a finer point of the differences between, Cobden, the liberal internationalist, and Friedrich List, who would become something like the epitome of an economic nationalist?
In the book, I draw out the global ideological conflict between the Cobdenites, as they were called at the time, and other varieties of Cobdenism, and what I call Listian nationalism. Cobden and List are both characters who have, by and large, been marginalized in the decades since their global ideological conflict played out in the 1840s, when Britain started liberalizing its trade policies unilaterally. At that time, Richard Cobden leads this middle-class movement, the Anti-Corn Law League, and overturns the protectionist Corn Laws, or highly protective tariffs on foreign grain, in Britain. In doing so, he ushers in an era of trade liberalization in Britain, and for a brief period, cultivated Euro-American trade liberalization. Importantly, while Cobden’s middle-class movement for free trade is largely about cheap food for the British working classes, there's also a really strong foreign policy component to it, what we might now refer to as “capitalist peace theory” or “interdependence theory.” Broadly, this was the idea that the more nations trade with one another, the less likely they are to go to war. Through this process, goods became a lot cheaper. And so it's that anti-imperial and pacifistic aspect of free trade that’s motivating Richard Cobden and his disciples in the 1830s and 1840s: food security alongside a very strong critique of war and a very strong critique of imperial politics. The German-American economic theorist Friedrich List responded to this moment in a very powerful way. List was a very important nationalist thinker who leaves Germany and moves to the United States in the 1820s, and becomes embroiled in Pennsylvania’s protectionist politics. And this is where this idea of the “American System” of protectionism is starting to establish itself. And Friedrich List takes his German experiences and mixes them with his American experiences. Building on the economic nationalist ideas of Alexander Hamilton, List develops a new, as you put it, neo-mercantilist critique of what was becoming a modern globalized order, thanks to railways, the telegraphic cable, steamship lines, etc. The economy was becoming connected, in ways that we would find familiar today, in the mid 19th century, and both Cobden and List were responding to it in very different ways. List was also responding to Britain’s embrace of trade liberalization, by attempting to warn the rest of the industrializing imperial world away from copying the British. In The National System of Political Economy, published in 1841, List lays out a provocative critique of the free-trade idea emanating from Britain. Instead, List argued that the imperial rivals of the British, the Germans, the French, the Americans, should instead do the opposite and embrace economic nationalism: high tariff and subsidies for manufacturers to spark industrial innovation and to catch up to the more advanced British. But to catch up, countries would need to procure proper colonies and become colonizers in their own right. The crux of List's counter to Cobden’s economic cosmopolitanism is this idea about strengthening the nation-state through industrialization and imperial expansion. From 1870 onwards, it's List's ideas that are by far more prevalent and influential than Cobden's. So, List calls, in many ways, for a perpetual system of colonial exploitation in what we might now call the Global South. These colonies would then provide raw materials for European and American industrial cores and outlets for surplus capital. Cobden’s free trade would continue to influence the international peace and anti-imperialist movements, but Friedrich List’s brand of economic nationalism won the battle of ideas among Britain’s imperial rivals.
I’d like to better understand how the Cobdenite and Listian schools of thought interacted with one another and evolved throughout this period in history. We could put the question abstractly, as if we were searching for a theory of change: How did certain ideas about free trade emerge from this community, and not that one?
The late 19th and early 20th centuries was a period some have described as imperial globalization. This is not to say that all aspects of globalization were happening because of imperial expansion. But imperialism was a major driver of globalization at this point, whether that was through just straight up colonialism, thereby formally prying open markets, or more informally, as in the case of, say, the British Empire and the Opium Wars in China. And so, whether it's within that nexus of liberal free trade and empire on the British side, or if it's from economic nationalist imperial policies coming out of, say, the United States, Germany, France, Russia, Japan, and so forth from from the late 19th century onwards, either way, these trends, flows of information, and trade are happening under the auspices of imperial expansion in a very, very big way. And so in that sense, I don't think the anti-imperialists and the peace activists had much of a choice but to work within the imperial networks that they were trying to undermine. They made good use of the new technological tools of imperial globalization, of steamships, cables and railways, to help spread the very ideas that would hypothetically undermine the imperial system that helped create them.
It seems there’s some historical irony at play: anti-imperial and left-wing veins of free trade thought were stuck in feedback loops with empires themselves. To what extent did the theories offered by liberal internationalist thinkers on free trade require an empire or, if we want to sugarcoat it, economic hegemon?
Let’s start by looking to how economic nationalist ideas manifested themselves in the colonial sphere. Let’s start with the imperial powers. By around 1870, aside from the British, most empires enacted protectionist policies in their colonies and against the rest of the imperial powers. In Britain, ideas about “free trade” were being enforced in their so-called “less civilized” colonies like Ireland and India. Nationalists in the British colonies take up Listian ideas after seeing that the protectionist policies of the United States, Japan, and Germany are working quite well in “catching up” to the British. Nationalists in the British colonial world use List’s works to help come up with an anti-colonial nationalist policy. In these rather rare instances in, say, Ireland, India, and China, economic nationalism became an anti-imperial tool for cultivating a state’s industrial power and for undermining British free trade imperial machinations. And so this is why you have these grassroots economic nationalist policies, as in India’s 1905 Swadeshi movement, a national policy of boycotting British goods in the hopes of revitalizing India's ancient industries. You find something similar with the rise of Sinn Féin in Ireland, as well. In his 1905 speech launching the Sinn Féin party, Arthur Griffith explicitly identifies himself as a disciple of Friedrich List. Grassroots anti-imperialist versions of economic nationalism crop up in the relatively rare instances where free-trade policies were being coercively implemented by the British Empire. Conversely, anti-colonial nationalists within the American Empire following the Spanish-American War and the formal U.S. acquisition of the Philippines, Puerto Rico, and Cuba informally. Thanks to the Republican Party, the United States was very protectionist and walled its new colonies off with tariffs on trade with the world and even the U.S. itself. This was partly to inhibit competition with, say, domestic US sugar growers, but also to limit immigration from the Philippines, and Asia broadly, into the mainland United States. The US colonial tariff policy was turbocharged with xenophobic and anti-immigrant sentiment at the time. But what that meant, at the time is that, in contrast to British-controlled Ireland and India, anti-colonial nationalists in Puerto Rico, Cuba, and the Philippines were free traders. They wanted free access to the world’s markets, especially the U.S. market. These colonies were also quite poor after so many years of war, and desired cheap imports.
Let’s stick on the U.S. for a moment. Later chapters in the book chart how ideas about free trade were reinvented in the late twentieth century as the Cold War waned, the Washington Consensus emerged, and politicians from Ronald Reagan to Bill Clinton embraced free trade as the symbol of a peaceful world order. These changes styled America as the leader of a world order built on free trade. You suggest this is something of an invented tradition that Cold War ideology has obscured from our rear view mirrors. In fact, the U.S. had bootstrapped itself, a century earlier, by wholeheartedly embracing the Listian program of economic nationalism. Explain why you see the U.S. as the paradigmatic example of List’s protectionist and national economic policies.
Let’s pick up on where we left off with Friedrich List and the National System of Political Economy, which he publishes in 1841. List commits suicide not that long afterwards, but his ideas live on and he was instrumental in the growing popularity of the American System of protectionism in the 1800s. First the Whig Party took his ideas up, then the Republican Party. Abraham Lincoln exemplified how this Whig protectionist strain took over the Republican Party. In contrast to the Democratic Party, which was the party of free trade in the early to mid 19th century, and often still closely tied to the defense of slavery. But as I show in this book and in my previous book, too, in the northeastern United States there's also a left-wing abolitionist strand of free-trade ideology working behind the scenes within both the Republican and Democratic parties. But the point here is that, yes, the Republican Party was the party of antislavery, but once slavery comes to an end in 1865, they rebrand themselves as the party of protectionism. Republican economic nationalism has been written out of our history books in fascinating ways in ways I still can't quite understand, I can only speculate on them. But domestic histories, foreign relations histories—they all deserve part of the blame for how we’ve forgotten that the Republican Party, and thus the United States itself, was fervently protectionist in the late 19th and early 20th centuries. The US Empire became a protectionist model for rival imperial powers to follow. The American System of protectionism was thus far more influential in shaping the imperial economic order of this era than British free trade. We can’t point to many places outside of Britain itself where the free traders were successful in spreading trade liberalization as ideology and policy, aside from the international grassroots anti-imperial and peace movements. This economic nationalist backdrop is essential for understanding how the US undergoes an economic revolution in the 1930s and 1940s when it turns towards free trade.
So by the turn of the twentieth century, when the US was an exemplar of protectionism. As protectionism proliferated and the US made efforts to establish dominance, especially in the wake of World War I, new social movements and intellectual communities came to understand free trade as a tool that could reshape the world. These groups included early feminists and the resurgent Christian pacifists. How did these communities appropriate discourse about free trade?
I’d begin in Britain, which is the starting place of what becomes the socialist free-trade activism. Karl Marx himself, who was living in England, endorsed free trade in the 1840s. Marx argued that socialists the world over should all be free traders, because free trade was clearly the next small-p progressive step in capitalist development. Free trade, Marx thought, would bring the world closer to the brink of a socialist revolution, even as the independence markets would connect the workers of the world. But Marx’s halfhearted endorsement of free trade would largely disappear by the First World War, at which point a new generation of socialist internationalists became persuaded that only a free-trade order could avoid another world war. Among feminist free traders and Christian pacifists—some of whom were socialists, but others were capitalists—peace activism was supplemented with the goal of reforming the economic order and making it more interdependent through free-trade policies. Jane Addams, the famous Chicago social reformer, became the figurehead of free-trade feminism when she became the leader of the women's peace movement during and after World War I. Free trade was a way to provide cheap food and keep women and children from starving, and first-wave feminist peace workers like Addams were pragmatic in using free trade ideas to advocate for issues like food security. A shared left-wing desire for a world connected through free trade reflected the variety of thinking about free trade at the time. There’s the international cooperative movement, alongside some more radical Marxist variants, and classical liberal variants that are still very much at play in the interwar years. And Marxists and capitalist free traders start working together to create their Pax Economica. There was also a democratization element to left-wing free trade. In 1830s Britain, aristocratic landed elites were the ones that were growing all the grain and gaining financially from the artificially high prices on foreign grain through the Corn Laws. By promoting free trade in grain, activists were undermining the economic power of the aristocratic landed elites, who were often the main loudest defenders of the British empire’s militaristic state. They thought if you could weaken the economic power base of the protectionist aristocracy, you could eventually democratize foreign policy. Left-wing free-trade advocacy was deeply tied to hopes for political democratization, democratic reforms that would be enticing for first-wave feminists, as well.
And this is where your book dives into the connections between free trade and the emergence of individual rights, or what will become “human rights.” Rights, as legal codes and social norms, seem to follow the spread of liberal economic cosmopolitanism in some significant ways.
Right, and this is also where you see the close association between women's empowerment and freeing world trade as a way to end hunger and world hunger, to end the starvation of women and children, either in wartime or outside of it. Economic justice overlapped with social justice within the left-wing free-trade movement, foreshadowing the enshrinement of the concept of universal human rights later in the 20th century. So, when Jane Addams is going on her inaugural tour of Eastern Europe as the international president of this new organization called the Women's International League for Peace and Freedom just after the First World War, she witnesses mass starvation. The war was over, but women and children were still starving. Addams blames “hyper-nationalism” for postwar food insecurity. The newly independent Eastern European states, many rising from the ashes of those empires defeated in First World War, embraced what Addams considered to be the worst aspects of imperial politics: extreme economic nationalism. Tariff wars among these new states, she argued, led to starving mothers and children across Europe. This is just one example of how left-wing free traders like Addams connected women's rights, democratization, and food security in fascinating ways. At the same time, the mid-19th-century’s new technological tools of globalization sparked a millenarian spirit amongst Christian internationalists. Finally, they could build the world the way God had intended it. Christian pacifists argued that natural resources were spread all over the world because God wanted people to trade peacefully with one another. After the First World War, Christian pacifist movements fused classical liberal and radical socialist ideas to advocate for a free-trading system maintained through a supernational organization. But these were not just left-wing ideas. At the same time, right-wing free traders like Friedrich Hayek were arguing that humanity could only maintain a truly interdependent and peaceful economic order through supranational regulation.
Let’s pivot to the late twentieth century. What causes the decline of liberal internationalist thinking on free trade?
The Cold War certainly deserves most of the blame. But movements for decolonization worked in tandem. The Cold War isn’t just about a political shift from left to right and the growing influence of Hayek and Friedman’s “neoliberal” ideas. It’s also about the United States shifting from multilateralism to unilateralism, from military non-interventionism to military and covert interventionism, and, more broadly, a shift to a permanent wartime footing. A divided world economy gave rise to renewed protectionism in the capitalist West at the same time it advocated for “the rest,” so to speak, to open up their markets. What followed were scathing critiques of what will become the New International Economic Order (NIEO), as the non-aligned movement and the decolonizing world tries to come up with an alternative economic order to a Cold War order that was increasingly antagonistic to them. At the United Nations Conference on Trade and Development in 1964, you've got the likes of Che Guevara sounding like a mid-19th-century Cobdenite when critiquing Western protectionist practices like the Cuban embargo. The American System, of using protectionism as a tool of imperialism, thrived in the Cold War atmosphere. Indeed, when you dig into the UNCTAD and the NIEO debates, they're far more critical of the capitalist West’s protectionist politics.
What shifted with the end of the Cold War?
When the Cold War finally fizzles out at the tail end of the Reagan Administration and the early years of the George H. W. Bush Administration, a lot of people got very heady, especially on the Right, that this was a moment when “neoliberal” free market capitalism could become the global ideology of the day. The Washington Consensus comes into being, and people started predicting the end of the nation state and the end of history. But the US response to the 9/11 attacks demonstrated that nationalism remained by far the most powerful ideology of the modern era, whether its political nationalism, ethnic nationalism, or economic nationalism. At first, economic nationalism was lingering on the outside of American politics. But when the Great Recession hit in 2008, it started moving towards the center from both the far Right and the far Left. You now had the Tea Party movement and the Occupy Wall Street movement both lambasting NAFTA and the WTO. Granted, you already had those rumblings at the Seattle WTO protest in the late ‘90s, but by the 2010s, we witnessed the swift return of economic nationalism to mainstream American politics, and, more broadly, across the globe. Distrust of multilateral institutions like the World Trade Organization and the United Nations have duly followed. This economic nationalist trend went into fourth gear in 2016 with the Brexit referendum and the election of an avowedly protectionist Republican president, and then fifth gear during and after the pandemic. From the left-wing free traders’ perspective, our current economic nationalist moment is not an anomaly; it’s a return to the status quo.
Historians are always uncomfortable leaning back in the armchair predicting the future. But I wonder what the events of the early 2020s signal to you about the fate of free trade in the century to come.
Predicting the future is not something we're good at. But it might help if we look further back than the rise of right-wing free market ideas in the 1920s and 1930s. The fact that Donald Trump was recently referencing the McKinley tariff of 1890, a key imperial policy of the Republican protectionist system, signals that we might need to look back to the protectionist system that the GOP built in the Gilded Age to understand what happens next. In that instance, the book’s left-wing free traders would argue that the protectionist order culminated in the First World War. So I suppose some left-wing internationalist pessimists might predict that a new era of free trade and multilateralism will likely need to follow another world war, assuming that we’re able to pick up the pieces and create the required foundations for a long-lasting Pax Economica. But others in my book might have cause for cautious optimism. After all, left-wing internationalists searching for an alternative vision for world organization, for a world that is interdependent along ethical and equitable grounds, have had some success in the last 50 years. You still have trace elements of it with, say, the Fair Trade movement, the cooperative movement, the single tax movement, and the existence of feminist free-trade organizations such as the Women's International for Peace and Freedom and the YWCA. Even though these movements lost some of their infatuation with free trade as a result of the neoliberal ‘90s and early 2000s, they do persist. Perhaps, then, my book might also offer inspiration for the century to come through its its recovery of how, in a different economic nationalist era that is looking more and more like today’s, left-wing free traders successfully formed a big-tent coalition that got surprisingly close to obtaining their long-sought Pax Economica.
Jacob Bruggeman is the associate editor of FUSION and a Ph.D. candidate in history at Johns Hopkins University.