Classical Liberalism, Free Trade, and Accelerating Change

The 2016 election was a victory for the Republican party but it was hardly a resounding one for classical liberalism at least as historically defined. Classical liberalism, for instance, has reflected an enthusiasm for free trade along with other free markets. But Donald Trump ran the most aggressively anti-free trade platform of any major party nominee Democratic or Republican in the last century.

But rather than simply bemoaning the fact, classical liberals need to take account of it, because the anti-trade turn is a part of the greatest challenge classical liberalism has ever faced: how to address the ever faster rate of social and economic change. The freedom to make such transformations through technology and trade creates very substantial wealth but it disrupts people’s lives, making them less liberal and more eager for state protection than before.

There can be no doubt that such disruption was at the heart of Trump’s victory. ​Studies have shown that much of his strongest support came in counties where foreign trade, particularly from China, led to layoffs. And there can also be no doubt that trade has swifter and more disruptive effects than before.  In an interesting new book, The Great Convergence: Information Technology and the New Globalization, Richard Baldwin shows that the ability of information to travel instantaneously from nation to nation allows foreign competitors to combine first world know-how with third world wages in unprecedentedly effective ways.

The happy result is cheap clothing and other human staples that have made the rate of inflation much lower for those of modest means than wealthier people who buy bespoke goods.  But the unhappy one is communities where workers face huge difficulties in finding new jobs that are nearly as remunerative as the old.

And technological change is likely to be even more disruptive as computation moves rapidly to automate jobs. Self-driving cars and trucks will arrive in the next decade or so and save tens of thousands of lives now lost in accidents.   But currently three million people in the United States drive for a living.

How can classical liberalism itself adapt to this faster rate of change?  Was this political philosophy dependent on a slower rate of change in previous centuries?  It is easier for children to adapt to a new world than their parents and thus trade and technological change that forces the next generation to change its way of life even fundamentally is much less destabilizing than a rate of change that disrupts the current generation. It is striking in this respect that Trump’s appeal was much less strong to the young than to the old.

Michael Oakeshott famously thought any ideology was secondary to felt experiences of the current world. It was those experiences rather than principles that were the basic stuff of politics. I believe that the principles remain relevant through the ages, but Oakeshott is right to recognize that principles become irrelevant unless they take account of relevant facts of the age. And the speed of change is the most important fact of our contemporary world that many libertarians and classical liberals have largely ignored. In a subsequent post, I will discuss how classical liberalism can be refurbished for an age of accelerating change.