The Right likes to make bold claims about free trade and laissez faire capitalism but these claims rest entirely on false premises. Below are some of the frequently-used defences of laissez-faire capitalism.
Free markets create more wealth than any other system.
This is one of the biggest myths of all. The simple truth is that wealth is concentrated in a small number of hands. I had one free marketeer tell me that workers in the 19th century were “richer” (that was the word he used) in the 1890’s than they were at the beginning of the century. What he was trying to prove by this statement is unclear and I don’t think he’d even thought about it for a moment. Rising costs meant that, in real terms, the working classes were no better off than they were in the 18th century. Working class people could not hope to move up the social ladder in the 19th century. They were stuck where they were. The idea was that wealth will ‘trickle down’ to those below. It didn’t work then and it doesn’t work now but the Right continue to repeat the lie.
The free exchange of goods between nation will lead to world peace
Classical liberals like Adam Smith and Richard Cobden believed that free trade would magically lead to the abolition of war. However in order for the British Empire and other similar free trade empires like the French Empire, there was a constant need to invade other countries, enslave their peoples and cart the resources (booty) back to the home country – without resources in the form of raw materials, they would have nothing to manufacture and therefore have nothing to trade. Local rebellions against colonial rule were crushed with extreme brutality and the colonizers divided the people according to ‘ethnicity’ and would install one group as the political elite, often with dire consequences. This is what the Belgians did in Rwanda when it created artificial divisions between the Tutsis and the Hutus. The tensions between these groups came to a head in the late 1990’s when Western news media reported it as a recent phenomenon. Belgium was a free trade nation.
Free trade nations don’t go to war with each other.
Another lie. Britain went to war against the US (a free market country) in 1812. It also went to war against Germany in 1914. German military power had been on the rise since the creation of the German Empire in 1871. This worried Britain who had been the pre-eminent military power in the world. The assassination of Archduke Franz Ferdinand in Sarajevo in 1914 provided the perfect pretext to challenge German power.
Things work best when the state doesn’t intervene.
Between 1845 and 1852, the Irish Potato Famine devastated the country. Lord John Russell’s Whig government, which was committed to laissez-faire capitalism, refused to intervene to relieve the suffering. As a result over 1 million people lost their lives through starvation and disease. Many more emigrated. Ireland was part of Britain, it had been forced into union in 1801 and yet, it was left to its own devices when the famine struck. The Whigs further justified their inaction by using Biblical interpretations drawn from Deuteronomy. Laissez faire capitalism is barbarism.
It’s better for all of us when nations open up their markets
The First Opium War (1839 – 42) is instructive because this is how self-described free market nations behave when they don’t get what they want. Opium had been a social problem in China for a number of years and the Empress wanted to stamp it out. But the British wanted to pay for Chinese silk in opium rather than silver. The Chinese refused and destroyed the opium, so Britain attacked China on the pretext that it was seeking compensation for the opium that had been destroyed.
The Second Opium War (1856 – 60) saw the British and French Empires uniting to attack China. With opium as a convenient pretext, the British and French sought to open up China’s markets through the use of military force. The subsequent British and French victory over the Chinese opened the way for other nations to follow and soon, the US, Russia and even Germany moved in to China to claim their share of the country’s resources. This war also led in the indentured servitude of millions of Chinese (Coolies)who were carried in British ships to the US and elsewhere to work on the railroads and the plantations of the Caribbean.
Free trade is a the guarantor of liberty.
History tells us that it is only those who enjoy great economic power who will also enjoy greater liberty. All one has to do is examine the social history of Britain, the US and other so-called free trade nations to see this. Workers in the 19th century were often forced to buy their necessities from the company they worked for. If workers organized themselves into unions and took industrial action, they were set upon by the state’s thugs.
Free trade means freedom for the rich and powerful and servitude for the rest of us.