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Is the Economic Case for a Policy of Free Trade “Of Recent Vintage”?

Here’s a letter to a new reader of my blog:

Mr. Z__:

Thanks for your e-mail.

I can’t tell from your note just what Oren Cass has written that has convinced you that “the captivation of today’s economists for free trade is of recent vintage.” It’s true that the great British economist who Cass is now fond of quoting, Alfred Marshall (1842-1924), indicated in his academic work theoretical exceptions to the economic case for free trade. But Cass reads far too much into these academic passages from Marshall, who was famously diligent at dotting all of his theoretical ‘eyes’ and crossing each of his technical ‘tees.’ As I noted in my Law & Liberty response to Cass’s original essay in that forum, when it came to endorsing policy, Marshall and other economists of his era – like economists earlier and later – understood that theoretical curiosities should not blind us to practical likelihoods. And as a practical matter, free trade is the best policy if the goal is widespread prosperity and amity among nations.

Consider that in August of 1903, when Joseph Chamberlain was leading a charge against free trade in the United Kingdom, fourteen of that country’s most prominent economists signed a powerful letter that was published in the London Times in support of free trade. (Two other economists later added their names to this letter.) The original signers include some of the most famous economists in history, such as Charles Bastable, Edwin Cannan, Francis Edgeworth, A.C. Pigou, and Alfred Marshall. Let me share with you a core passage of this letter:

But a return to Protection would, we hold, be detrimental to the material prosperity of this country, partly for reasons of the same kind as those which, as now universally admitted, justified the adoption of Free Trade – reasons which are now stronger than formerly, in consequence of the greater proportion of food and raw materials imported from foreign countries, and the greater extent and complexity of our foreign trade. The evil would probably be a lasting one, since experience shows that Protection, when it has once taken root, is likely to extend beyond the limits at first assigned to it and is very difficult to extirpate. There are also to be apprehended those evils other than material which Protection brings in its train, the loss of purity of politics, the unfair advantage given to those who wield the powers of jobbery and corruption, unjust distribution of wealth, and the growth of ‘sinister interests.’

If Cass has convinced you that economists’ strong endorsement of a policy of free trade “is of recent vintage,” you are misled. The facts run strongly against Cass’s history, which isn’t so much revisionist as it is plainly wrong.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030