Why Trade Is the Pathway to Peace, Not Just Prosperity

“If soldiers are not to cross international boundaries, goods must do so. Unless the shackles can be dropped from trade, bombs will drop from the sky.”— Otto T. Mallery

The fundamental reality of the world is disagreement. Everyone disagrees with everyone about the value of everything. Even something so elementary as an ounce of gold is valued differently from one person to another, and the range of values can be large. If we think about, these differences of opinion are what make the world interesting. But the real question to be addressed in such a world of clashing views is how to achieve peace and prosperity. The answer is free trade—the voluntary exchange of goods and services among people.

Freedom to Trade Empowers and Liberates

In every free trade, the exchange results in the traders on each side of the trade receiving more than they give up. Take the simple case of an exchange at the grocery store. Mr. Customer prefers the cereal box on the shelf to a certain amount of money in his pocket. Mr. Grocer prefers that amount of money to the cereal box he put on the shelf. How do we know these two different valuations are simultaneously true? Mr. Grocer lets his customer walk out of the store with the cereal box so long as the customer willingly leaves the grocer’s asking price.

Now it was to be the sovereignty of each person that made the world better, and it became government’s only duty to assure citizen sovereignty.

This was the chief insight of Adam Smith’s The Wealth of Nations, published on March 9, 1776. Less than four months later, the American colonies of England adopted a document of independence insisting that government protect life and property and the interest of every person to improve his or her life through the acquisition and trade of property. It was, as the inscription on the Great Seal of the United States reads, a new order of the ages (Novus Ordo Seclorum). Rule by a king and aggression against foreign nations had been the recipe for so-called national greatness. Now it was to be the sovereignty of each person that made the world better, and it became government’s only duty to assure citizen sovereignty.

More Government Means Less Freedom—and Less Peace

Yet today, the U.S. government keeps detailed records on how Americans trade with the rest of the world and even among ourselves. We should wonder why that is so. It can be entirely proper if the government inspects the things imported into this country for the purpose of national defense—we don’t want the import of dangerous weapons and materials that would be used to kill Americans and commit other acts of aggression.

It is a fundamental duty of limited government to strictly protect the right of its citizens to make their own economic choices.

However, the trade information collected by the government does not go to the Department of Defense but to other federal agencies that have usurped control of our economy. It is unfitting for a free people to allow their government to control, direct, distort, forbid, or otherwise engage in economic decision-making. It is a fundamental duty of limited government to strictly protect the right of its citizens to make their own economic choices.

If we allow government to interfere with the economic desires of every human in the free market—to interfere with the right to free trade—we will have pretty much conceded all power to the government. That leaves liberty forever in jeopardy and severely compromised.

Every free trade is a fair trade—a willing exchange of two parties where both benefit. Both parties benefit, as do many potential third parties who will consequently have better terms to trade their own wares and who will benefit directly from the peaceful activity of trade rather than face the collateral damage of hostility and war. Otto Mallery had it right when he wrote, “If soldiers are not to cross international boundaries, goods must do so. Unless the shackles can be dropped from trade, bombs will drop from the sky.” 1

Every tariff is an act of usurpation. It is the abominable master-slave relationship imposed by government on what it considers its subjects. That is not the “new order of the ages” envisioned by the founders of America, where government’s duty is to protect the rights of free and sovereign citizens.

1. Mallery, Otto T., 1943, Economic Union and Durable Peace (Harper and Brothers).

Further Reading

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