In the August 2001 Freeman I argued that knowledge of history supports and deepens the economist’s understanding that trade is an indispensable source of prosperity and cultural enrichment – and that those who restrict trade are agents of barbarism. My column is below the fold.
Economics is the discipline that I loved first and that I continue to love above all. The economic way of thinking – as the late Paul Heyne called it – is a potent solvent for cutting through the nonsense and irrelevancies that typically loom large in policy discussions. No one lacking a solid grasp of economic principles can understand social reality well enough to offer sensible opinions on policies. This grasp of economic principles might be formally learned (as it was for me), or it might be acquired along life’s way through experience, reflection, and careful observation—but it is certainly necessary. Anyone without it is far too likely to speak baloney when discussing public policies.
But economics is not sufficient for sound thinking about the social world. History, more than any other discipline, is a necessary complement to economics. By detailing the human past, history gives perspective and supplies wisdom about human potential and limits.
One of my all-time favorite history books is Fernand Braudel’s The Structures of Everyday Life (1981). In this work, Braudel documents the appalling poverty that marked the life of nearly every European prior to the industrial revolution. Our European ancestors of just a few generations ago were filthy, starving, disease-ridden, ignorant, and superstitious slaves to the soil. It was only after commerce and industry burst forth in the eighteenth century – and only where commerce and industry burst forth – that the world as we know it today began to take shape. Those who romanticize our pre-industrial past ought to read Braudel.
Another favorite history book of mine is Will Durant’s The Life of Greece (1939). Throughout this book, Durant makes clear that the unprecedented culture, liberty, and prosperity of ancient Greece grew from commerce and trade. First in Crete, later in Miletus and, most spectacularly, in Athens, ancient Greek achievements go hand in hand with commerce. Discussing fifth-century B.C. Athens—the century of Pericles, Socrates, Aeschylus, Sophocles, Euripides, Aristophanes, Herodotus, Thucydides, and the construction of the Parthenon—Durant says that
Greek states have learned the advantages of an international division of labor. . . . In one century Athens moves from household economy—wherein each household makes nearly all that it needs—to urban economy—wherein each town makes nearly all that it needs—to international economy. . . .
[I]t is this trade that makes Athens rich, and provides . . . the sinews of her cultural development. The merchants who accompany their goods to all quarters of the Mediterranean come back with changed perspective, and alert and open minds; they bring new ideas and ways, break down ancient taboos and sloth, and replace the familial conservatism of a rural aristocracy with the individualistic and progressive spirit of a mercantile civilization. . . . In the end it created a commercial empire whose thriving interchange of goods, arts, ways, and thoughts made possible the complex culture of Greece.
The economist understands part of the reason why this is so. Trade promotes specialization, which promotes wealth, which makes possible leisure as well as philosophical, scientific, and artistic endeavors. But the historian grasps another vital part of the explanation of why trade promotes cultural advancement. Here’s Durant again: “The crossroads of trade are the meeting place of ideas, the attrition ground of rival customs and beliefs; diversities beget conflict, comparison, thought; superstitions cancel one another and reason begins.”
And reason begins! Reason itself is the product of trade. If this proposition is true – and the evidence supporting it is gargantuan – it follows that to oppose trade is not only to oppose people’s freedom to spend their money as they see fit. It is also to do nothing less than to oppose reason. And to oppose reason is truly to advocate barbarism. In Durant’s words, for citizens of ancient Greece “a barbarian was a man content to believe without reason and to live without liberty.”
It’s easy to know what the ancient Greeks would think of today’s self-described “progressive” opponents of trade. These anti-traders do not understand the enormous debt that they owe to trade. They do not understand just how many of the very sensibilities that spark them to oppose trade exist only because of trade.
This fact holds for that most patent modern sensibility: affection for nature. Our appreciation today for beautiful vistas, wildlife, and time spent with nature is almost exclusively the result of trade.
Consider, for example, what the incomparable Thomas Babington Macaulay wrote, in his History of England, about the nineteenth-century Englishman’s deep affection for the beauty of the Scottish Highlands. Macaulay informed his English contemporaries that their affection for the Highlands was new. It emerged only after commerce and civilization tamed the Highlands and made them accessible to civilized people.
Indeed, law and police, trade and industry, have done far more than people of romantic dispositions will readily admit, to develop in our minds a sense of the wilder beauties of nature. A traveller must be freed from all apprehension of being murdered or starved before he can be charmed by the bold outlines and rich tints of the hills. He is not likely to be thrown into ecstasies by the abruptness of a precipice from which he is in imminent danger of falling two thousand feet perpendicular; by the boiling waves of a torrent which suddenly whirls away his baggage and forces him to run for his life; by the gloomy grandeur of a pass where he finds a corpse which marauders have just stripped and mangled; or by the screams of those eagles whose next meal may probably be on his own eyes. . . .
It was not till roads had been cut out of the rocks, till bridges had been flung over the courses of the rivulets, till inns had succeeded to dens of robbers . . . that strangers could be enchanted by the blue dimples of lakes and by the rainbows which overhung the waterfalls, and could derive a solemn pleasure even from the clouds and tempests which lowered on the mountain tops.
An unmistakable lesson from a study of the past is that wealth, peace, security, culture, civilization, appreciation for nature, and even reason and knowledge develop from trade. Trade is the great civilizer. History, along with economics, tells us that those who would prevent or restrict trade are truly barbaric.