World History

Gary Galles draws attention to writings that heavily influenced 18th century American politics.

The historical record shows that commercial freedom is the best policy in peace and war. Cooperation is more fruitful than coercion. And if one wants the friendship or assistance of others it is better to appeal to their interests instead of their fears.  Above all, foreign trade should be as free and unrestricted as trade within a nation.

Those of us who know some economics are used to wincing when the typical clergyman makes a pronouncement on political economy. So it comes as a bit of a shock to read Late Medieval religious figures, avowedly concerned with justice and morality, and find that not only are they economically literate but that in many cases their economic theory was far more advanced than many professional economists who came after them.

A broader understanding of "Say's Law" would assist those who continued to be puzzled by macroeconomic questions, but even better would be to understand the context in which this Law was formulated. Say not only built a case for the essential stability of a free market (in contrast to the instability of the present mixed economy) but also made the case for the free society against every alternative.

The journalist's skill as an observer can only take him so far, if he is observing with the wrong theory in mind. As Thomas Friedman's "Theory of Everything" shows, without the distinction between power and market—the very core of the libertarian idea—a theory of everything can easily turn into a theory of nothing. 

In the games planners play, the model builder wins by outsmarting an opponent programmed to react in predictable ways. The conclusion is decided by the assumptions built into the system. If this is true in peace, it is all the more true in war. The game called "war" is no better at preparing central planners for real life than the game called "market."

Ah, the simplicity of demagogic populism, especially that of Bill O'Reilly and Stephen Moore. They haven't even bothered to notice that Dannon yogurt produces products in three U.S. plants (in Ohio, Texas, and Utah) and distributes them from five U.S. facilities (in Texas, California, Ohio, Florida, and Pennsylvania).

The idea that commerce and war are allies is a complete perversion of the old liberal tradition. The first theorists of commerce from the 16th through the 18th centuries saw that a most meritorious aspect of commerce is its link to freedom and peace, that commerce made it possible for people to co-operate rather than fight. It made armaments and war less necessary, not more.

Those who claim that government is the source of social order say that in its absence there would be violence, chaos, and a low standard of living. But medieval Iceland illustrates an actual and well-documented historical example of how a stateless legal order can work and it provides insights as to how we might create a more just and efficient society today.