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The American Revolution Was a Free-Trade Revolution

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Tags Protectionism and Free TradeU.S. History

07/04/2019

In 1765, a writer at The Boston Gazette complained about the seemingly endless stream of protectionist laws imposed on the colonists by the British Empire:

A colonist cannot make a button, a horseshoe, nor a hobnail, but some sooty ironmonger or respectable button-maker of Britain shall bawl and squall that his honor's worship is most egregiously maltreated, injured, cheated, and robbed by the rascally American republicans.

In other words, if a colonist attempted to export any manufactured goods that might compete with tradesmen back in England, Parliament was sure to get an earful from local protectionists about "unfair" trade.

And Parliament was often happy to oblige.

Setting the Stage for Rebellion

Beginning at least as early as the seventeenth century, Parliament had placed a wide variety of restrictions on what the colonists could trade, and where. The British state limited both imports and exports. Under these "trade laws," Americans had to ship tobacco, pitch, tar, turpentine, masts, and other specified items to England only. According to Charles Beard in The Rise of American Civilization, "commodities of ...manufacture, as a rule, they could buy only through English factors. — the idea being to add to the prosperity of English merchants."

Other regulations put restrictions on colonial manufacturing: "woolen goods and hats could not be made for the general trade; mills for slitting and rolling iron and furnaces for making steel were forbidden."

These laws were, according to Beard, "the result of specific protests made by interested parties [in England]."

And then there was the hated Molasses Act of 1733 which was a protectionist measure designed to drive up the price of foreign-made molasses. It was passed at the insistence of wealthy owners of plantations in the West Indies, many of whom were said to be sitting members of Parliament at the time.

The Act was a grave threat to the standard of living in New England, where a large rum-production industry thrived. The Act led to widespread smuggling and opposition from colonists, which eventually led to nullification of the law. Historian John C. miller writes in Origins of the American Revolution:

Against the Molasses Act, Americans had only their smugglers to depend upon — but these redoubtable gentry proved more than a match for the British. After a brief effort to enforce the act in Massachusetts in the 1740s, the English government tacitly accepted defeat and foreign molasses was smuggled into the Northern colonies in an ever-increasing quantity. Thus the New England merchants survived—but only by nullifying an act of Parliament.

In many ways, the opposition to the Molasses Act would prove to be a sort of rehearsal for the acts of disobedience that would lead up to the American revolution decades later.

And when revolution finally did come, trade would indeed be in the forefront of the debate over British abuses of power.

After all, with every tariff and with every trade restriction must also come enforcement.

In a lecture on the American Revolution, Lord Acton noted how the British, in the name of protectionism, slowly tightened the screws on the Americans. Faced with such relentless smuggling and flouting of the Empire's tariffs and trade controls, the monarchs took to ever greater interventions:

The right of searching houses and ships for contraband was conveyed by certain warrants called writs of assistance, which required no specified designation, no oath or evidence, and enabled the surprise visit to be paid by day or night. ... [I]t was now intended [under George III] that they should be efficacious, and should protect the revenue from smugglers...

Acton tells us the American jurists argued vehemently that the writs were an abuse of power, but eventually,

The court decided in favor of the validity of the writs; and John Adams, who heard the judgment, wrote long after that in that hour the child Independence was born.

Modern Protectionists As Heirs of British Mercantilists

Unfortunately, when the war of Independence ended years later, the revolution was followed by the counter-revolution: American nationalists like Alexander Hamilton and John Adams wanted revenue for a large and powerful central government of their own. And they got what they wanted, over the protests of the Anti-Federalists — and the taxpayers.

As a result, in the early years of the Republic — much like today — protectionists would "bawl and squall" about supposedly unfair trade, as did the whining English tradesmen in the days of yore. Then as now, American protectionists think themselves "egregiously maltreated, injured, cheated, and robbed" by foreigners who dare to sell trinkets or tools to willing American buyers. Often, the tactic has worked to gain government favors for certain influential industries.

And with protection must come taxation and enforcement. Thus, the protectionists tacitly or explicitly approve of fines and prison terms against their own fellow Americans who might be so bold as to disobey the authorities in the tradition of the American revolutionaries. And, of course, protection means higher taxes for everyone.

Indeed, modern protectionists have returned many Americans to the status of the colonists of the eighteenth century. Today, a distant government hundreds or even thousands of miles away in Washington, DC can impose tariffs and quotas and restrictions of enormous variety. These protectionist measures might benefit only a tiny number of industrialists of farmers living halfway across the country. All at the expense of everyone else.

To justify this, the protectionists invent fantasies, such as the one in which all taxation is now justified because there is "representation." This is, of course, a fantasy based on an absurd notion that a few hundred millionaires in Congress could possibly "represent" 320 million Americans spread across a varied geography of more than three-and-a-half million square miles.

In practice, however, the reality of protectionism today is little different from what it was in the days of the Revolution: as freedom to trade is restricted, human freedom is likewise restricted. Thus, as Thomas DiLorenzo observed "whenever human freedom advances, as it did with the growth of trade, state power is threatened. So states did all they could then, as now, to restrict trade."

Ryan McMaken (@ryanmcmaken) is a senior editor at the Mises Institute. Send him your article submissions for Mises Wire and The Austrian, but read article guidelines first. Ryan has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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