October 4, 2013 at 11:26 am #18016samghebParticipant
In my International Studies classes I often hear a barrage of objections to free market economics. One of the best objections I have heard is that in order for global free trader we need a “liberal hegemon”. They will tend to use the period known as the Belle Epoque or the Gilded Age(America) as a period of free trade but that it was only due to the influence of the free trading Great Britain and her power overseas. Suppose Britain had been a mercantalist nation then perhaps we wouldn’t have seen the economic integration that we saw pre-1914. ‘Likewise they argue that free trade on a global scale only recontinued after WWII because America as a superpower could impose it. Is there any truth to this?
I know this is more political economy rather than pure economics so perhaps this is not your fieldOctober 4, 2013 at 2:35 pm #18017jmherbenerParticipant
International trade began to flourish in the West during the 13th century. The medieval fairs brought traders together with goods acquired from around the world. There was no hegemonic power protecting this trade.
Even after the rise of the nation states, international law as formulated by Hugo Grotius gave protection to trade. There was no hegemonic power protecting this trade either. In fact, in the age of mercantilism, England was chief among the mercantilist nation states.
After the age of mercantilism, trade restrictions were relaxed in the 19th century. The reason for this was that classical liberal ideas became more widely accepted. The political winds in Western nations blew in favor of free trade. But nation states persisted in their interference with international trade. Where is the evidence that England protected free international trade in the 19th century? In fact, England moved unilaterally toward freer trade in the first half of the 19th century without regard to what other countries did. What English sea power did to open up the Chinese markets in the late 19th century is called imperialism, not free trade. Moreover, it’s a non-sequitur to argue that because the English political class desired freer trade and England had the most powerful armed forces in the world they must have enforced freer trade on all other countries of the world.
Nation states destroyed international trade and disintegrated the world economy during the First World War. Things remained the same until after the Second World War when nation states partially rolled back their interventions into international trade. The reason for this was that politicians throughout Western nations desired a return to normalcy in international relations. Freer trade was part of their vision to avoid another world war. But nation states still managed international trade instead of making it completely free. Where is the evidence that America protected free international trade in the 20th century? Again, it’s a non-sequitur to argue that because the American political class desired freer trade and America had the most powerful armed forces in the world they must have enforced freer trade on all other countries of the world. I wonder if Iranians or Syrians think that American power has generated free international trade in the 21 st century.
All the world needs for free trade is international law based on private property and contract. Nation states, however, will not allow us to have free trade. They persist in their interventions. You might take a look at some of the works of Ludwig von Mises on free trade. He discussed both the theory and the history of international trade. One example is chapter 9 of Money, Method, and the Market Process:
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