Trade, Nations, and War in an Enlightened Age

Once a relatively shared commitment across mainstream Western political opinion for several decades, free trade is now a point of fracture on the right and left. That owes something to disputes about its economic effects upon particular communities. But the fight about trade also reflects broader disagreements about the nation-state’s place in a more economically-integrated world, related questions concerning sovereignty, and, ultimately, where people’s loyalties lie.

One assumption characterizing this argument is that support for free trade goes hand-in-hand with support for global governance schemes or even a borderless planet. In such a world, nation-states would, at best, become a level of government subordinate to supranational organizations like the European Union. At worst, they would be considered atavistic expressions of tribalism destined for oblivion as an ever-extending economic integration brings universal peace in its wake.

You don’t have to look far to see how variants of these positions now define what many people associate with expressions like “liberalism” or “international liberal order.” The irony is that some of the leading thinkers of the movement most associated with the rise of classical liberalism and free markets—the Scottish Enlightenment—weren’t interested in transnational governance agendas. Nor did they desire or envisage the disappearance of nations. They were also skeptical about strong correlations between free trade and a more peaceful world.

Enlightenment in a Time of War

It’s easy to forget that the tremendous intellectual creativity flowing from the Scottish Enlightenment occurred against a background of war. These included Britain’s participation in the War of the Spanish Succession (1701–1714), the War of Austrian Succession (1740-1748), the Seven Years War (1756-1763), the American War of Independence (1775–1783), the French Revolutionary Wars (1792-1802), and the Napoleonic Wars (1803-1815). Between 1776 and 1815, Britain was at peace for just 10 years.

It’s therefore unsurprising that Scottish Enlightenment luminaries like Francis Hutcheson, David Hume and Adam Smith were very attentive to international relations. Much of their commentary focused on Britain’s relationship with its American colonies. But their starting point on these matters was always nation-states—not aspirations towards some pan-European federation of the type sketched out in 1713 by the Abbé de Saint-Pierre in his Projet pour rendre la paix perpétuelle en Europe and developed by Immanuel Kant in his 1795 Perpetual Peace: A Philosophical Essay.

Hutcheson, Hume and Smith were part of the Enlightenment’s transnational world of letters. By the standards of the time, they lived cosmopolitan lives. But they did not develop cosmopolitan affections, let alone sympathy for global governance-like projects. Instead their approach to international relations is marked by an attention to principle and deep realism about human nature.

When Francis Hutcheson examined questions of international order in the last chapters of his Philosophiae moralis institutio compendiaria (1747), he thought in terms of sovereign-states interacting with each other according to natural law principles and the ius gentium: the law of nations which all eighteenth-century European rulers and thinkers took deadly seriously. While he wasn’t an aficionado of war, Hutcheson regarded many wars as just from the standpoint of natural law and the nation’s “common safety.” He also praised people’s willingness to die for their country.

A similar importance was attached by David Hume to the law of nations. Yet Hume explored international affairs primarily through the prism of a balance of power between nations. This was the best basis, he believed, for a relatively peaceful world.

I say “relatively” because Hume held there would always be war-like conflicts between nations because people were imperfect. “[T]heir selfishness and ambition,” he states in his Treatise of Human Nature, “are perpetual sources of war and discord.” Establishing a balance of power was the most realistic way of limiting the tensions flowing from this fact and help prevent military conflict from escalating to the global proportions that he and other Scots witnessed during the Seven Years War.

Hume also doubted that the growth of free trade—for all its benefits which he highlighted on numerous occasions—would always facilitate greater peace. After all, he reasoned, increasing numbers of nations would become wealthier through free trade. More governments could therefore expand and maintaining larger armies and navies and absorb the costs of war for longer periods. It’s not difficult to see there might be cases in which such factors could tilt the balance towards governments deciding that a war might be the more optimal way of resolving a dispute with other states.

Smith the Realist

Adam Smith’s views on these matters aren’t that far removed from Hutcheson and Hume. He too attached value to the law of nations insofar as he thought it permitted some degree of justice to shape international relations and ameliorated war’s effects. In his Theory of Moral Sentiments, Smith didn’t argue that our sympathy for others stopped at borders.

Smith did, however, believe that sympathy became much feebler once it moved beyond the national level. Empathy for the human race and love of country weren’t, to Smith’s mind, incompatible. Yet he viewed patriotism as more instinctive. “The love of our country,” Smith wrote, “seems not to be derived from the love of mankind. The former sentiment is altogether independent of the latter, and seems sometimes even to dispose us to act inconsistently with it.”

Our nation, according to Smith, is simply more part of our everyday cultural, historical and linguistic reality than humanity as a whole. Placing your country’s well-being before that of other nations was to be expected, even natural. Though Smith was no jingoist, he regarded fighting and dying for one’s country as deeply honorable. The patriot who does so acted, Smith comments, “with the most exact propriety.”

Nor did Smith portray war as always the worst choice. In his Lectures on Jurisprudence, Smith even suggests that preemptive strikes against those intent upon attacking your country can often be legitimate. He cites Frederick the Great’s 1756 invasion of Saxony as an instance in which the roi-philosophe rightly undertook military action against foreign powers poised to launch a war whose object was Prussia’s destruction.

That said, like Hutcheson and Hume, Smith wasn’t enthusiastic about war. Part V of his Wealth of Nations describes the significant economic burdens which it imposes on nations. Nonetheless Smith agreed with Hume that conflict was part of the human condition. There was no reason to imagine that international relations could be immunized from this reality.

Trade doesn’t necessarily promote peace

Part of Smith’s critique of the mercantilist economic system which dominated the eighteenth-century European world was that it exacerbated the potential for international conflict. Thanks to its beggar-thy-neighbor conception of wealth, mercantilism encouraged nations to think that their prosperity could only come at others’ expense. This mindset stimulated national rivalries, whether it concerned territory in Europe or colonies and trading rights in the Americas.

To the extent that free trade undermined many of these sources of conflict by letting nations discover their comparative advantages and realize a transnational division of labor, Smith thought that it could encourage peace among nations. Nevertheless he didn’t imagine it would render war or nations obsolete.

In the first place, Smith didn’t think that economic integration would gradually neutralize humanity’s propensity for conflict. Trade could ameliorate international tensions associated with cultural and religious differences, but it wasn’t going to lead to a Kantian perpetual peace.

Consider, for instance, the exceptions which Smith—much like Alexander Hamilton two decades later—made to his otherwise comprehensive advocacy of free trade. These include (1) the use of retaliatory trade restrictions during trade wars and (2) protecting industries and technologies essential for the nation’s war-fighting capacities. These aren’t the conclusions of a crypto-pacifist who thought that growing trade freedom would eventually dissolve the likelihood of clashes between countries.

Likewise, Smith’s advocacy in the Wealth of Nations of professional armies wasn’t just a question of him applying the division of labor principle to national security issues. He also thought that professional armies were more effective than militias at conducting war and deterring aggression. Again, the implication is that Smith didn’t believe that war or nations were likely to vanish.

Second, Smith elaborated on Hume’s thesis that the increased wealth generated by free trade allowed countries to enhance their military capacities. Smith’s Wealth of Nations specifies that the growth in a nation’s resources arising from an increasingly efficient “domestick industry, from the annual revenue arising from its lands, labour, and consumable stock” would permit that country to support “fleets and armies in distant countries” and “maintain foreign wars there.”

Perhaps one example of what Smith envisaged is the stupendous generation of wealth which occurred in nineteenth-century capitalist Britain. This accelerated after the repeal of the protectionist Corn Laws in 1846 and successive British governments’ commitment to pursuing unilateral free trade policies.

Without this rise to economic and financial dominance spurred on by free trade, it’s highly doubtful that Britain could have maintained the powerful navy and professional army which enabled it to enforce what was called the Pax Britannica throughout the nineteenth-century. This wealth and military power permitted Britain to engage with relative ease in low-intensity conflicts like the Opium Wars of 1839-1842 and 1856-1860. Ironically, these wars were partly about forcing China to open its markets to foreign products and remove internal Chinese tariffs from foreign imports.

Free trade’s benefits are indeed, as these Scottish Enlightenment intellectuals understood, manifold. They refrained, however, from overstating its positive effects. It’s also fair to say that they would have treated proposals for a globe devoid of borders and military confrontation with deep skepticism. As Western countries debate free trade and the nation-state’s saliency today, such insights are surely worth pondering.