Mises Daily Articles
Thomas Paine on Commerce
Thomas Paine is primarily remembered for his fiery rhetoric in favor of American revolution and independence. But in The Rights of Man, in which he tries to "establish a system of principles as a basis on which government ought to be erected," he shows that commerce, or free trade, is not only deducible from those principles, but interference with such commerce impoverishes the nations involved as well. We would do well to return to that understanding he expressed over two hundred years ago.
- Whatever the form or constitution of government may be, it ought to have no other object than the general happiness. When, instead of this, it operates to create and increase wretchedness in any of the parts of society, it is on a wrong system, and reformation is necessary.
- The inhabitants of every country, under the civilization of laws, easily civilize together, but governments being yet in an uncivilized state, and almost continually at war, they pervert the abundance which civilized life produces to carry on the uncivilized part to a greater extent...It affords to them pretenses for power, and revenue, for which there would be neither occasion nor apology, if the circle of civilization were rendered complete.
- In all my publications, where the matter would admit, I have been an advocate for commerce, because I am a friend to its effects. It is a pacific system, operating to cordialize mankind, by rendering nations, as well as individuals, useful to each other...
- The most effectual process is that of improving the condition of man by means of his interest; and it is on this ground that I take my stand. If commerce were permitted to act to the universal extent it is capable, it would extirpate the system of war, and produce a revolution in the uncivilized state of governments.
- The invention of commerce...is the greatest approach towards universal civilization that has yet been made by any means not immediately flowing from moral principles.
- Whatever has a tendency to promote the civil intercourse of nations by an exchange of benefits, is a subject as worthy of philosophy as of politics.
- Commerce is no other than the traffic of two individuals, multiplied on a scale of numbers; and by the same rule that nature intended for the intercourse of two, she intended that of all. For this purpose she has distributed the materials of manufactures and commerce, in various and distant parts of a nation and of the world; and as they cannot be procured by war so cheaply or so commodiously as by commerce, she has rendered the latter the means of extirpating the former.
- As [war and commerce] are nearly the opposite of each other, consequently, the uncivilized state of the European governments is injurious to commerce...Like blood, it cannot be taken from any of the parts, without being taken from the whole mass in circulation, and all partake of the loss.
- When the ability in any nation to buy is destroyed, it equally involves the seller. Could the government of England destroy the commerce of all other nations, she would most effectually ruin her own...She cannot be the seller and buyer of her own merchandise. The ability to buy must reside out of herself; and, therefore, the prosperity of any commercial nation is regulated by the prosperity of the rest. If they are poor she cannot be rich, and her condition, be what it may, is an index of the height of the commercial tide in other nations...
- With respect to [commerce's] operation it must necessarily be contemplated as a reciprocal thing; that only one-half its powers resides within the nation, and that the whole is as effectually destroyed by the destroying the half that resides without, as if the destruction had been committed on that which is within; for neither can act without the other.
- There can be no such thing as a nation flourishing alone in commerce: she can only participate; and the destruction of it in any part must necessarily affect all. When, therefore, governments are at war, the attack is made upon a common stock of commerce, and the consequence is the same as if each had attacked his own.
- The present increase of commerce is not to be attributed to ministers, or to any political contrivances, but to its own natural operation in consequence of peace. The regular markets had been destroyed, the channels of tradebroken up, the high road of the seas infested with robbers of every nation, and the attention of the world called to other objects. Those interruptions have ceased, and peace has restored the deranged condition of things to their proper order...Every nation feels the advantage, or it would abandon the practice...
- Two merchants of different nations trading together, will both become rich, and each makes the balance in his own favor; consequently, they do not get rich off each other; and it is the same with respect to the nations in which they reside. The case must be, that each nation must get rich out of its own means, and increases that riches by something which it procures from another in exchange.
- If a merchant in England sends an article of English manufacture abroad which costs him a shilling at home, and imports something which sells for two, he makes a balance of one shilling in his favor; but this is not gained out of the foreign nation or the foreign merchant, for he also does the same by the articles he receives, and neither has the advantage upon the other.
- The merchants of London and Newcastle trade on the same principles, as if they resided in different nations, and make their balances in the same manner: yet London does not get rich out of Newcastle, any more than Newcastle out of London: but coals, the merchandise of Newcastle, have an additional value at London, and London merchandise has the same at Newcastle.
The principle of free trade is simply that of the freedom to choose for yourself who you will associate with in productive ways, and how you will arrange those associations, without artificial government restrictions to limit those choices. That principle is an essential, inalienable part of having ownership of oneself.
Thomas Paine recognized this, and the same devotion to liberty which helped inspire America's revolution against tyranny in its many forms made him a defender of free trade. And as he pointed out, "the principle of all commerce is the same." That is just as true, and just as important, now.
But few today echo Paine's passion for liberty, resulting in constant attempts, frequently successful, to use political means-i.e., coercion--to advance narrow interests by assailing others' rights to decide for themselves. So limits on the freedom to trade, as well as on other freedoms, persist and grow.
America would benefit from remembering what Thomas Paine warned of as "the greedy hand of government, thrusting itself into every corner and crevice of industry," at the behest of some against others. That is because it would be a return to the principle of liberty on which our nation was founded, from a situation in which many aspects of liberty have been shrunk or eliminated.
And ultimately, the only real impediment to doing so is that too few of us still share Paine's conclusion that "Heaven knows how to put a proper price upon its goods; and it would be strange indeed, if so celestial an article as Freedom should not be highly rated."