Cobden on freedom, peace, and trade

Abstract

Every student of political economy knows that Adam Smith dealt mercantilist economic ideas a profound intellectual defeat in The Wealth of Nations (1776). The mercantilist had viewed economic interaction as a zero-sum game; that is, the benefit of one party had to come at the expense of the other. Sound economic policy, therefore, involved encouraging a favorable balance of trade (an excess of exports over imports), the acquisition of colonies, and the construction of a powerful navy to secure and maintain access to far-flung markets. Once Adam Smith and the classical economists had overthrown the mercantilist worldview in the eighteenth century, it was entirely natural that classical liberals would have expected peace to triumph to the extent that the new teaching became accepted. A philosophy that had viewed economic affairs as characterized by inherent conflict was increasingly giving way to one that emphasized mutual gain and the large-scale social cooperation of the international division of labor. As the various peoples and places of the world concentrated on producing those goods for which they enjoyed some advantage--or, as David Ricardo observed, even simply where they enjoyed the least disadvantage--the result would be greater wealth and a higher standard of living for everyone, as the entire world reaped the benefits of the particular advantages of a multiplicity of locales. In the nineteenth century, the great classical liberal Richard Cobden, the textile manufacturer and British politician who became famous through his campaign against the oppressive Corn Laws, developed this idea still further. The state's role in the spread of peace and freedom throughout the world was, in his judgment, very minimal. "The progress of freedom," he once said, "depends more upon the maintenance of peace and the spread of commerce and the diffusion of education than upon the labor of Cabinets or Foreign Offices." Cobden's philosophy had its roots in the previous century of European intellectual history. During the Enlightenment, thinkers impressed by the elegant regularity of phenomena and the beautiful order that Isaac Newton had described in the physical world looked in the social world for similar law-like relationships. And indeed, as Ludwig von Mises explains, the founders of political economy perceived "regularity in the operation of the market." People came to realize "with astonishment that human actions were open to investigation from other points of view than that of moral judgment. They were compelled to recognize a regularity which they