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Tuesday, October 26, 2010

If Goods Don’t Cross Borders…

The quote “When goods don’t cross borders, soldiers will” is often attributed to the 19th century French Liberal economist Frederic Bastiat. Bastiat was a man with a talent for the written word, and we have countless great quotes from his pen (amazing considering his life was so short and the majority of his writing was only in the last few years of his life). Economist Joseph Schumpeter even called him one of the great economic journalists in his famous book on the history of economic thought (though he also put him down in the same breath, calling him no theorist). And this quote is certainly something Bastiat would have believed. There is, however, little to no evidence he actually said these words.

Still, even FEE has long given Bastiat credit for the quote. In today’s document Leonard Read writes, in a September 16, 1952 letter, to Rose Wilder Lane, one of the great classical liberals of the 20th century herself, asking her for the source. It is doubtful she found it. Still, while it is still possible Bastiat is the originator, we do know there is a quote from Otto T. Mallery, a late 19th century liberal, in his “Economic Union and Enduring Peace” which states, “If soldiers are not to cross international boundaries, goods must do so. Unless the Shackles can be dropped from trade, bombs will be dropped from the sky.” So, the question remains, are we falsely attributing Mallery’s words to Bastiat? Or did Mallery get it from Bastitat or somewhere else?

Regardless of its source these words ring true. The idea can be traced back even further to the 18th century in Montesquieu’s 1748 work L’esprit des Lois or the Spirit of the Laws. In this work Montesquieu discusses the civilizing effect commerce has upon societies. Further, in a more modern context, Ludwig von Mises in Human Action discusses the importance of social cooperation, which Henry Hazlitt also uses as the foundation of his book the Foundations of Morality; trade has the effect of increasing social cooperation by allowing us to specialize and expand the division of labor. This is beneficial for everyone in society because it allows us to do more than is possible if everyone was in isolation. In other words, trade allows us to work together for our own benefits. We become dependent, in a good way, upon each other, which allows for greater cooperation and wealth. Take this away and conflict is the likely alternative outcome.

So irrespective of who said it, the lesson is clear and important: free trade not only increases the wealth of different societies, it might also be necessary for peaceful interaction.

  • Nicholas Snow is a Visiting Assistant Professor at Kenyon College in the Department of Economics, and previously a Senior Lecturer at The Ohio State University Economics Department. His research focuses on the political economy of prohibition.