Creeping Capitalism: Is Free Enterprise Coming Back?
OCTOBER 01, 1972 by EDWARD P. COLESON
Dr. Coleson is Professor of Social Science at Spring Arbor College in Michigan.
Many of our disillusioned contemporaries have given up on the present. If they have not "dropped out" so completely that they have quit thinking altogether, they are wont to retreat to the past. They like to imagine some golden age long ago when life was lovely and things worked out as they should. If they had just lived back then, think what they could have accomplished. But not today! The present is hopeless. Sad to say, today is all we have. Sad to say also, yesterday had its problems too.
Perhaps the classic example of the "displaced person" in history was Madame Roland who, says Carl Becker,’ often "wept to think she was not born a Spartan or a Roman…." There were no opportunities for heroic action in her little world, "the stuffy apartment of an engraver doing a small business on the Pont Neuf" in the Paris of 1788. But wait — July 14 came next year, the Bastille was taken and she had an opportunity to be part of as stirring events as the world has ever seen. She was unjustly thrown into prison and, as she awaited her turn at the guillotine, she recalled that Socrates had also been a martyr. On her way to the place of execution, as she passed a statue of Liberty, she exclaimed, "Oh Liberty, what crimes are committed in thy name!" Let’s hope that you and I are more fortunate than Madame Roland, but the point is obvious: her age was the "best of times and the worst of times," just as Charles Dickens tells us in the opening lines of his Tale of Two Cities. So was the age of Socrates and that much-maligned era called the present — more precisely, today.
No Instant Answers
A lot of good conservatives have been quite overwhelmed by developments in the last few decades. If they are ancient enough to remember the election twenty years ago — the strong feeling on the part of many that now we could drastically reduce the vast Federal bureaucracy, liquidate the farm program, reduce welfare expenditures to a reasonable figure and get people back to work again, trim the national budget so that no one would recognize it, all this and Heaven too, if we just elected the right president come November — well, such a voter may have given up on the political process some while ago. If the frustrations of the ‘Fifties didn’t do it, surely the conservative debacle of 1964 did. But such a political dropout fails to understand the historical process. There are no instant problems or instant solutions.
As Walter Lippmann2 wrote during the Second World War, "the movement of history is massive, and the mills of the gods grind slowly…." We need to learn to look far in the past to see the beginnings of the present, and to peer down into the tomorrows to try to see where we are going. Free enterprise did not spring full blown from the mind of Adam Smith in 1776, nor did the "New Deal" arise by spontaneous generation in the spring of 1933: both had their roots far in the past. If Socialism has been creeping up on us as far back as any of us can remember, this is the way Capitalism came into being in the early decades of the last century. The seeds of tomorrow are sprouting today, but it isn’t easy to guess what the flowers and fruit will be like afterward. We human beings are notoriously poor prophets.
One reason why the best laid plans of mice and men go awry is that history has a way of doing a dramatic about-face every once in a while and often even a double switch, like the surprise endings of O. Henry’s short stories. Few people could see the threat that Hitler posed even years after he came to power in 1933; and when the Nazi blitz was overwhelming Europe a little later, few could see the possibility of stemming the tide. In the postwar treason trials in France Pierre Laval asked the court how anyone in 1940 could have guessed that Hitler would not win the war. Men like Winston Churchill and General de Gaulle walked by faith, while the quislings and other appeasers walked by sight. If one cannot outguess history, at least he can try to be on the side of right and leave the outcome to the One who inhabits Eternity.
Obviously, there was no use in trying to straighten out the chaotic and decadent world of the Old Regime in France in the middle of the Eighteenth Century, when a few free enterprise philosophers called Physiocrats coined the phrase "laissez faire" and sought to bring order out of chaos. While Adam Smith was visiting France (1764-’66), he got acquainted with the Physiocrats, spent a considerable amount of time with them, and seems to have been influenced considerably by their thinking. But what is incomprehensible is the fact that a handful of French intellectuals and a relatively unknown Scottish professor of moral philosophy should start a revolution which would eventually — long after they were dead — change the whole destiny of the Western World and point the way to freedom.
As is well known, Adam Smith’s Wealth of Nations appeared the same year that Thomas Jefferson penned the "Declaration of Independence." The two were of a kindred spirit too. Both advocated limited government and the rights of the individual. Jefferson’s masterpiece bore fruit rather immediately, but The Wealth of Nations came into its own much more slowly and rather hesitantly too. The book became a best seller and was widely read and highly acclaimed by distinguished people. Edmund Burke3 insisted that "in its ultimate results" the Wealth of Nations "was probably the most important book that has ever been written." Since Burke died in 1797 and did not live to see any very tangible results (although Prime Minister Pitt was strongly committed to Smith’s ideas and was seeking to implement them) one wonders what he meant. Perhaps we may regard this as another of his prophecies, like his premonition that the French were in for real trouble. Burke4 was already deeply concerned about the condition of France, the danger of "some extraordinary convulsion," as early as 1769, although the French Revolution did not come for another twenty years. Did he also foresee what would really happen when men had the courage to actually put Smith’s theories to the test? That day was long in coming and conditions got worse before they got better. No doubt part of the delay was due to the coming of the French Revolution. According to John Chamberlain, "If the shadows of the French Revolution and the long Napoleonic struggles had not intervened, the full Smith doctrine might have become English governmental policy long before 1835 or 1848."
The Complex World of Earlier Periods in History
Before considering the very great impact of the French Revolution and the Napoleonic Wars on the political and economic development of Europe, let us examine briefly what Adam Smith was rebelling against. Since many Americans remember, at least second hand, the rather simple days of the late Victorian period, the "Gay ‘Nineties," it is customary for them to extrapolate backward to even simpler days in the 1790′s or the 1690′s. This view, of course, is completely fallacious. The world that Adam Smith and the Physiocrats knew was an exceedingly complicated affair and had long been that way, although the industrial age, which is supposed to be responsible for our modern complexities and perplexities, was still in its infancy.
Indeed, nearly two centuries before Watt perfected his steam engine and Smith wrote his protests against interfering with the market, the Spanish were developing a very complicated economic code for the management of their new colonies, even before they knew what they had over here. Ten years after Columbus returned from his first voyage, Ferdinand and Isabella created the House of Trade at Seville and put it in charge of the commerce of the colonies. Ultimately every aspect of life in the New World was controlled, presumably to promote the prosperity of the Mother Country. This system, known to history as mercantilism, should not be too hard for us to understand, since it is back with us again.
This Spanish version of the managed economy should also be of great interest to those who question the wisdom of similar attempts today. A few examples should illustrate the nature of the regulations and the severity of the punishment for disobeying them. Vineyards were forbidden in the New World on pain of death. (This was not an early try at "Prohibition" but was an attempt to help the Spanish wine producers at home.) The death penalty was also decreed for anyone in the colonies caught manufacturing any of a long list of articles, including artistic workings of gold and silver by the Indians. Trade with the colonies was strictly controlled also. Only one port in Spain was open to commerce with the New World and only two or three were allowed on this side of the Atlantic.
The easy assumption that freedom grew spontaneously in the virgin soil of the New World does not bear close scrutiny. Certainly this was not true in the Spanish colonies. Freedom is a world view but not a geographic location; we find it in the philosophy book, not the atlas.
Nor was this economic folly confined to the Spanish. The French system of economic controls, well known to Adam Smith through the Physiocrats and his own observations while traveling in France, was also a labyrinth of complexity. It required more than two thousand pages to print the textile regulations alone and, like Draco’s Code, they could be said to have been written in blood. For instance, sixteen thousand people died as the result of the laws governing the production of printed calicoes, either executed by the courts or killed in being apprehended for the violation of these regulations.
The English rulers had never done as badly as those of Spain and France because the political situation was rather insecure during much of this period (Charles I lost his head in 1649 and James II his throne in 1688), but they had done enough to arouse Smith’s wrath. He had a special grudge against monopolies. As Chamberlain6 says, "… his treatment (in the Wealth of Nations) of the monopolies granted to single companies for trade with the Orient — the East India company, for example — are masterpieces of restrained rage." It cannot be stressed too strongly, however, that Adam Smith was no anarchist; he was not out to abolish the Ten Commandments, the laws against murder and theft, but just the innumerable petty economic regulations that kept goods unnecessarily scarce and the mass of the people needlessly poor.
Retreat from Freedom
The French Revolution and the ensuing Napoleonic Wars seemed to push England and Western Europe farther and farther from the laissez faire economic policies advocated by the French Physiocrats and Adam Smith. Part of this seems almost inevitable in war time, at least, the way modern wars are fought. Most of us probably have forgotten both the duration and extent of this conflict: from the Fall of the Bastille on July 14, 1789 to Napoleon’s defeat at Waterloo on June 18, 1815 is almost twenty six years; and, while the war was not continuous during this period, it was always too close for comfort. Furthermore, it was a global conflict, (We sometimes forget that our own War of 1812 was just an extension of the one in Europe.) Needless to say, a war of this ferocity and duration impoverished the participants greatly, and the postwar depression was very severe. Nor is it necessary to point out that freedom was severely curtailed during this quarter-century of conflict, in spite of the early French slogan, "Liberty, Equality and Fraternity."
Both the English and Napoleon whose Empire included most of Western Europe — and even Russia with the Czar’s cooperation for a time — blockaded each other’s coastline, although much of it was a "paper blockade," particularly for the French who lost control of the seas after Lord Nelson’s victory at Cape Trafalgar in 1805. The United States, a young nation heavily dependent on foreign trade, found herself in a most awkward position with both sides preying on her commerce.
With Napoleon his Continental System, as he called it, was a "Co-prosperity Sphere," a managed "European Market" with England excluded, not unlike Clay’s "American System" for the United States a couple decades later. While these blockades can be passed off as war measures, Napoleon’s commitment to his brand of mercantilism seems to be more than mere expediency. After all, an important reason for his costly expedition into Spain was to put down opposition to his Continental System and even his disastrous invasion of Russia was certainly in part to compel the Czar to continue to adhere to his protectionist policies. As an English writer’ of the last century tells us, "It is well known that Napoleon Bonaparte… entertained a rooted antipathy to political economy. It was a saying of his that ‘if an empire were made of adamant, the economists could grind it to powder.’ "
In the meantime, the English were not doing much better. Getting one’s daily bread had always been a great problem for ordinary working people. In 1770 a bushel of wheat cost an English laborer about five days’ pay, but the war with Napoleon and bad harvests drove the price to the equivalent of nearly two weeks’ wages in 1813. With famine upon them Parliament8 met and — you won’t believe it — they increased the import duty on grain even more. The argument of the landed aristocrats who then ran England was that this increase would stimulate domestic production. Evidently, the English ruling class was as far from Adam Smith’s free trade doctrines in practice as Napoleon had been, whatever the former might think of the Wealth of Nations.
Speenhamland Poor Law of 1795
The English also stuck themselves with a disastrous poor law in 1795, a half dozen years after the Fall of the Bastille in Paris and just as Napoleon was emerging as one of the greatest military geniuses of all time. This new welfare arrangement lead to difficulties beyond the maladjustments growing out of the protracted wars. England had had a problem of poor relief ever since the breakup of the medieval manors centuries before (it was local and less obvious then). The Church had tried to care for the needy until the Reformation and then the State was saddled with the responsibility. Elizabeth, whose father Henry had started the English Reformation, made the first systematic attempt to cope with the problem. New poor laws were passed from time to time to correct the maladjustments created by the last ones. One writer in 1622 thought the root of the difficulty was the prevalence of monopolies:
This engrossing of Trade into few men’s hands hath caused our home trades to decay,… to the utter undoing of all sorts of poor people in England, and the great damage of all his Majesty’s loving subjects.9
A common explanation for the woes of the poor of England from the Sixteenth Century to the Victorian era is the enclosure movement, the change from a peasant village-communal type of ownership to the landed estates of the aristocracy. The classic literary work growing out of this social and economic revolution was Goldsmith’s Deserted Village, published in 1770. But there have been dissenters from this view, then and more recently. Probably few knew England at this time as well as John Wesley¹º (he is said to have traveled the equivalent of nine times around the earth during his ministry and mostly on horseback), but he ridiculed Goldsmith and saw considerable progress all around him. It fascinated him.
Chamberlain,11 drawing from Adam Smith’s experience, empha sizes the advantages of enclosure: no one can or will improve his land or livestock until he has a deed to the property and a fence (hedge) around it. These are simply the facts of life. By contrast, the late Wilhelm Roepke12 seems to have regarded the loss of England’s peasantry as a misfortune and an unnecessary one at that. Comparing the decline of English agriculture in the last century with the phenomenal rise of Danish farming during the same period, he comments: "This decay overcame an agricultural system which had lost its strength, its vitality and its social soundness because it had lost its peasantry."
Whatever the cause of widespread pauperization — monopoly, enclosures, or even the rising factory system, as has often been suggested — the English had problems. With the Terror in Paris rising to new heights of ferocity, the English ruling class was profoundly uneasy and looking for instant answers. They thought they had found their panacea in an arrangement worked out by the justices of Berkshire in May, 1795, and generally adopted by the other counties of England, although never enacted by Parliament. The Poor Law of 1795 became known as Speenhaml and, because the initial meeting was held in a village of that name.
The Right to Live
The new welfare system was a wage-supplement plan based on the "right to live" principle. If a family man could earn half a living, the government supplied the other half. If he earned nothing, he was completely on the dole. If he made enough to survive, he got nothing from the government. Details varied across the nation, but it was a comprehensive scheme with a "cost of living" escalator tied to the price of bread, additional benefits with more dependents, and all the rest. It sounds quite modern. As Karl Polanyi¹³ says, "No measure was ever more universally popular."
The "war on poverty" was won — all they needed now was to conquer Napoleon. Actually, the latter proved the easier foe to vanquish. He was defeated at Waterloo in 1815 and sent to Saint Helena. A severe postwar depression then added to the misery and havoc of the war. Poverty was still very much with them. Even those landed aristocrats, who had done well on the high food prices of the war era, now found they were land poor. No small part of the blame for the misery of this period, traditionally heaped on the manufacturers of the early Industrial Revolution, properly belongs to Napoleon — if he was responsible for the war with its destruction and its subsequent economic crisis. Part of the problem also was this unfortunate Poor Law, as will be obvious as we examine its economic consequences.
Renewed Interest in Freedom
Perhaps it was too much to expect anything very constructive to come out of those long weary years of war; but with the return of peace Adam Smith’s ideas began to be taken seriously once more, not just by intellectuals but by practical businessmen, too. In 1820, groups of merchants and manufacturers in both London and Edinburgh petitioned Parliament to remove the many restrictions on trade. A special committee appointed by the House of Commons to study the problem found eleven hundred regulations which hampered trade in various ways and recommended that they be abolished. While this was not done instantly, there were several reciprocal trade agreements negotiated with the neighbors in the next few years. Western Europe was definitely moving in the direction of greater freedom.
Another problem that sorely needed attention in the postwar era was the hopelessly tangled labor situation. Ever since the Speenhamland welfare program was devised in 1795, England had sunk deeper and deeper in a hopeless quagmire. I have found no writer, left or right, who has had anything good to say for this Poor Law, although most everyone seems to have favored it at its inception. Polanyi, an avowed Socialist, expresses amazement that any laborer would work at all when he could get along quite as well without doing so. Evidently, someone worked a little. In practice, great numbers of laborers did a little work for an inadequate pay check which was supplemented by welfare payments, as we would call them. In fact, the employer expected his help to be on the poor rates because he didn’t expect to pay them a living wage; neither did his laborers plan on doing a fair day’s work for him.
The consequence of such a system was almost universal pauperization. Says Polanyi, "In the long run the result was ghastly," and he allows that at least part of the human and social degradation of early capitalism should properly be attributed to the devastation wrought by the Speenhamland Poor Law of 1795. If it was that bad — and even the liberal Encyclopaedia of the Social Sciences" insists that it "demoralized both employer and employed" — surely it should have been no problem to abolish it. Actually, laborers were sure they couldn’t live without it; and employers who were paying taxes to support the system were loath to have the law repealed because, after all, it did help to pay the hired man. Although never established by Parliament, it was finally abolished by Parliament in 1834, after the First Reform Bill had established a more democratic and responsive legislative body.
If people couldn’t live with the Poor Law, they couldn’t live without it. Hardly anyone had ever said a good word for the Speenhamland welfare arrangement, once they had seen it in operation; yet, there were anguished wails that its abrupt termination caused great hardship and unnecessary suffering. Perhaps the testimony of one who was close to the situation at the time may help us understand the problems of transition. Herbert Spencer, whose uncle was deeply involved in the relief problem, before and after repeal, tells us how the change came about in his uncle’s parish:
A late uncle of mine, the Rev. Thomas Spencer,… no sooner entered on his parish duties than he proved himself anxious for the welfare of the poor, by establishing a school, a library, a clothing club, and land-allotments, besides building some model cottages. Moreover, up to 1833 he was a pauper’s friend — always for the pauper against the overseer…. however, the debates on the Poor Law… impressed him with the evils of the system then in force. Though an ardent philanthropist he was not a timid sentimentalist. The result was that, immediately the New Poor Law was passed, he proceeded to carry out its provisions in his parish. Almost universal opposition was encountered by him…. My uncle, however, not easily deterred, faced all this opposition and enforced the law. The result was that in two years the rates were reduced from £700 a year to £200 a year; while the condition of the parish was greatly improved. "Those who had hitherto loitered at the corners of the streets, or at the doors of the beer-shops, had something else to do, and one after another they obtained employment;" so that out of the population of 800, only 15 had to be sent as incapable paupers to the Bath Union… in place of the 100 who received out-door relief a short time before…. some years later…, having killed himself by overwork in pursuit of popular welfare,… the procession which followed him to the grave included not the well-to-do only but the poor.
Several motives have prompted this brief narrative. One is the wish to prove that sympathy with the people and self-sacrificing efforts on their behalf, do not necessarily imply approval of gratuitous aids. Another is the desire to show that benefits may result, not from multiplication of artificial appliances to mitigate distress, but, contrariwise, from diminution of them. [When the Speenhamland system was set up in 1795]… it was not expected that the poor rates would be quadrupled in fifty years, that women with many bastards would be preferred as wives to modest women, because of their incomes from the parish, and that hosts of ratepayers [taxpayers] would be pulled down into the ranks of pauperism…. the larger becomes its extension [the involvement of the State] the more power of spreading it gets. The question of questions for the politician should ever be — "What type of social structure am I tending to produce?" But this is a question he never entertains.15
What makes this quotation so interesting is the fact that, with minor editorial changes, one would assume it had been written last week — except that we haven’t solved our problem yet. For the purpose of the present discussion, it is obvious that England could not have risen to the heights of prosperity and power a little later with a demoralized and pauperized labor force as the foundation of its national life. Certainly not the least of the reforms which led to Victorian greatness was the liberation of the English laborer from a vicious system which destroyed all incentives to work and any reward for so doing. While no doubt the intentions of those who devised the Speenhamland Poor Law were the best, the results over nearly forty years had been, as Polanyi tells us, "ghastly."
The Anti-Corn Law League
The next chapter in the story of England’s economic liberation was the famous "Repeal of the Corn Laws" in 1846. The Corn Laws were England’s "farm program," a very ancient and miscellaneous category of laws passed from time to time to encourage the production of grain. Since bread is the "staff of life," the promotion of a sound agriculture took on the aura of a sacred duty, although opponents of the laws regarded them as a national swindle and insisted that people in general would be better off without them.
In his Wealth of Nations Adam Smith had a lengthy "Digression concerning the Corn Trade and Corn Laws" attached to the end of Chapter V, "Of Bounties." In fact, his digression is longer than the rest of the chapter. As might be surmised, he was opposed to those assorted interferences with the market. Early laws, he said, for bade the activities of what we call the "middle man," still the bane of farmers today, according to popular notions. There was deep public concern lest speculators should take advantage of the hungry masses in times of famine, so official attempts were made to keep this from happening. Smith" was sure that such misguided efforts only made the crises worse: "… a famine has never arisen from any other cause but the violence of government attempting, by improper means, to remedy the inconveniences of a dearth." Whatever he thought, the government had been busy for centuries with its panaceas and would continue its efforts for decades after his passing; the remedy of his day and the next half-century was an import duty on grain.
In the years following the publication of The Wealth of Nations the protection of English agriculture from foreign competition became increasingly unpopular. The landed aristocrats created a national scandal during the famine times of the later Napoleonic War period by increasing the tariff on grain when the price was already prohibitive, as has been mentioned. One would suspect that the general public never quite forgave them for that, and anti-corn law feeling continued in the early decades of the last century. In 1827 Colonel Thomas Perronet Thompson17 published his famous Catechism on the Corn Laws, a series of questions and answers which proved most revealing. Three years later Ebenezer Elliott, "the Bard of Free Trade," came out with his Corn Law Rhymes in which he contrasted the plight of the poor and hungry with the luxury of the "wicked monopolists" who conspired to hold up the price of bread by keeping out foreign grain. As trade was loosening up over those years, the tax on food became more and more odious to a lot of people. Organizations began to be formed to combat the tariff on grain. When a severe financial crisis made a chronic ailment into an acute affliction, the long-standing opposition to the grain duties began to snowball into a national movement: the famous Anti-Corn Law League was founded in Manchester in 1839. John Bright and Richard Cobden swiftly emerged as the leaders of the movement and England was off on another exciting crusade.
To understand the Anti-Corn Law agitation of the next seven years one must know something of the context in which it happened. On the intellectual side it can be said that the seed planted by Adam Smith and nourished by a host of later disciples — scholars, statesmen, the clergy, businessmen, schoolteachers and ordinary citizens — had grown, matured, and was now ready to blossom and bring forth fruit. While a given political or economic arrangement can be imposed by force or fraud, people tend to get about the system they deserve.
Britain had been moving in the direction of laissez faire economics for decades, because a lot of people felt that this system was right in the absolute sense, the same as the multiplication tables or Newton’s Law of Gravity. Still, man tends to let things go if he can and not change unless the situation gets out of hand so that some sort of readjustment must be made. In the next several years a series of calamities provided the motivation for change, and the free traders were there to capitalize on the situation.
The first of these crises was a serious and widespread economic depression. We in America had our share of it too, the famous Panic of 1837, and no doubt we helped to make it happen. Our "wild cat" financing of a host of internal improvement before the crash, projects in which a lot of foreign capital was invested, resulted in severe losses for English investors who bitterly resented the repudiation of American bonds. After the state of Pennsylvania defaulted on her obligations, one wit writing in the Edinburgh Review,18 "… remarked that whenever he met a Pennsylvanian at dinner in London he wondered that nobody carved him up and served him in slices to every Englishman present."
Of course, the depression resulted in widespread unemployment and much suffering, but John Bright, a textile manufacturer, seems to have blamed the English Corn Laws for much of the distress. Even the drastic decline in the sale of flannel to America, which put a lot of English textile workers out of work, Bright blamed on British policy. He said the Americans were just retaliating against British discrimination against grain from the United States. While he allowed that the Corn Laws were not to blame for everything, he insisted that their repeal would go far in solving a lot of other problems. A host of people across the nation shared his views. The problem now was to change the law. Before this was done, however, even worse calamities were to come.
"The Battle of the League"
What Bright’s biographer19 has called the "Battle of the League" is an interesting study in how to win political friends and influence legislators. They tried every legitimate technique known to politics and then available. They distributed literally tons of tracts: "… as many as three and a half tons of tracts were delivered from Manchester in a week."20 The ladies had tea parties, and Anti-Corn Law League bazaars were held which were more of "the character of a great art Exposition than of a mere bazaar;" here customers could buy "free trade handkerchiefs, anti-corn law bread plates and teapots and antimonopoly pin cushions." A great conference of the clergy was held at Manchester and many ministers began to preach that the corn laws were "anti-scriptural and anti-religious, opposed to the law of God."
Since Bright himself was a devout Quaker and thought in Biblical terms, this is just the way he wanted it. It was easy for cynics then and since to see in Bright’s efforts a thinly disguised effort to promote his own interests and those of the business community, but this is hardly fair to him. He was no hypocrite. He could be as staunch for what he believed was right when he had nothing to gain and everything to lose. For instance, he was bitterly opposed to the Crimean War a decade later and on principle, although his stand made him enormously unpopular and caused him to lose his seat in Parliament. He was quite prepared to suffer for his beliefs. When Bright found free trade in the Bible — "As a nation of Bible Christians, we ought to realize that trade should be as free as the winds of heaven" — he meant it, and his own sincerity and deep convictions were convincing:
… he refused to separate the spheres of morality and politics. Moreover, he did all this at a time when the mood of the informed men of the age disposed them to prefer subtle calculations of political expediency to adherence to general principles of conduct.21
The Biblical and moral arguments carried great weight with a lot of people who had helped to abolish slavery throughout the Empire a dozen years earlier, but those who were not swayed by the ethical approach found Richard Cobden’s facts convincing. He also was in Parliament and, if less eloquent than his friend, he was still a formidable foe of protectionism. In March, 1845, Robert Peel, then Prime Minister, was listening to one of Cobden’s long factual speeches when he crumpled up his notes and remarked to a colleague sitting next to him, "You must answer this for I cannot."
Although Peel had greatly liberalized trade three years earlier, this was not enough to placate the League, particularly since the Corn Laws were still on the books. Cobden was now certain that the Prime Minister was quite ready to go the whole way, if he could just find a suitable opportunity. His chance came swiftly in the form of a natural calamity, the tragic Potato Famine in Ireland. That country was seriously overpopulated, desperately poor and excessively dependent on potatoes so when the crop blighted and rotted in the ground in August of 1845, famine was upon them. Estimates have placed the loss of life22 as high as two and a half million people over the next few years. Clearly, limitations on food imports were indefensible in such a situation. Parliament met in special session in January, 1846, and Robert Peel recommended the repeal of the Corn Laws. After months of bitter debate, the bill became a law in June of the same year. As John Bright said, "Famine itself, against whom we fought, took up arms in our behalf." At long last the duty on grain — the tax on bread as the League was wont to call it — was abolished.
While the repeal of the Corn Laws did not result in complete freedom of trade, Britain continued to move in that direction so that by 1860 she had arrived. The Navigation Laws and Usury Laws had also been repealed. "Laissez-faire had reached in Great Britain the culminating point," wrote G.D.H. Cole,23 the Fabian Socialist, and he then proceeds to describe the rapid growth of British trade. Freedom was the fashion and it proved profitable too. Even Lord Keynes24 speaks of the late Victorian era as an "economic Eldorado," an "economic Utopia." Another writer says,25 "In our own unpleasant century we are mostly displaced persons, and many feel tempted to take flight into the nineteenth as into a promised land, and settle there like illegal immigrants for the rest of our lives." While returning to the past is clearly impossible, if desirable — they had their problems and we have some very real advantages too — still the question remains whether we could regain the best of their world and graft it on to the best of our own. Let us examine this possibility.
Return to Freedom
I shall not attempt to predict just how we are going to straighten things out; like Amos of old, I’m "no prophet, neither a prophet’s son." Nevertheless, I think we can get some idea how it might happen from the British transition to free enterprise as described in this article. Of course, it is notoriously hard to turn a nation around once it is launched in a given direction — particularly if it is down hill. Tocqueville26 comments on this tendency: "The machine once put in motion will go on for ages, and advance, as if self-guided, towards a point indicated beforehand." Another Frenchman a little earlier, Louis XV, remarked cynically as the Old Regime of France was hastening to its fall, "Let the good machine run itself. It will last our time. After us, the deluge." Louis XVI was swept away by that deluge, but freedom did not come to France in spite of the slogans of the Revolution. Chamberlain27 remarked a few years ago that, since "politics tends to go by ratchet-action" in a democracy, the time may come when the situation becomes so snarled and tangled that a nation "may be lucky… to lose a total war totally," provided they are conquered by a magnanimous foe and have "a Roepke serving as advisor to the Ministry of Economics, not a John Maynard Keynes." That is a long string of "ifs" and the hazards are great if you are not that lucky. The English escaped the equivalent of the French Revolution nearly two centuries ago but found their way, falteringly but surely, toward the desired goal, a peaceful revolution of freedom. Judging by the British experience, a nation needs an intellectual elite which believes in liberty (let’s hope we are building that now); a general population which is weary of the endless and stifling restrictions of mercantilism (many of our people are getting tired of the pretensions and high cost of big government); and crises which afford the possibility of a choice (and all nations have those, particularly the omnicompetent state which attempts more than anyone can accomplish).
Actually, setting up the free system is remarkably easy, when the opportunity comes. Communists admit they have never even approximated the Marxian blueprint and their government isn’t "withering away" today any faster than ours is. No such difficulty was experienced after 1846 for, as Adam Smith28 says, "All systems either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord" — if people are just wise enough to let it happen. Let us, therefore, be busy at the educational task as our first priority. It is well to remember that it was a familiar maxim in England for two decades before the Corn Laws were repealed that "the schoolmaster now walks abroad in English politics." We then need to seize every opportunity which crises afford and, most important of all, "… let us not be weary in well doing: for in due season we shall reap, if we faint not." (Galatians 6: 9)
1 Carl L. Becker, The Heavenly City of The Eighteenth-Century Philosophers, pp. 151-154.
2 Walter Lippmann, U. S. Foreign Policy: Shield of the Republic, p. 138.
3 George Soule, Ideas of the Great Economists, p. 40.
4 Peter J. Stanlis (ed.), Edmund Burke, Selected Writings and Speeches, p. 418.
5 John Chamberlain, The Roots of Capitalism, p. 23.
7 Henry M. Hoyt, Protection versus Free Trade, p. 72.
8 Robert L. Heilbroner, The Worldly Philosophers, p. 73.
9 Vernon A. Mund, Open Markets, p. 79.
10 Umphrey Lee, The Lord’s Horseman: John Wesley the Man, p. 172.
11 Chamberlain, pp. 12-14.
12 Wilhelm Roepke, The Social Crisis of Our Time, p. 245.
¹³. Karl Polanyi, The Great Transformation, pp. 77-79.
14 Encyclopaedia of the Social Sciences, Vol. 12, "Poor Laws," pp. 230-234.
13 Herbert Spencer, The Man versus the State, pp. 24-32.
16 Adam Smith, The Wealth of Nations Modern Library edition), pp. 492-493.
17 Asa Briggs, The Making of Modern England (1784-1867), The Age of Improvement, p. 313.
18 John Chamberlain, The Enterprising Americans: A Business History of the United States, pp. 70-71.
19 George Barnett Smith, The Life and Speeches of the Right Hon. John Bright, M. P., Vol. I, p. 122.
20 Briggs, pp. 317-318.
21 Asa Briggs, Victorian People, p. 202.
22 Cecil Woodham-Smith, The Great Hunger, Ireland, (1845-1849), p. 411.
23 G.D.H. Cole and Raymond Postgate, The British Common People, 1746-1946, pp. 336-337.
24 John Maynard Keynes, The Economic Consequences of the Peace, p. 10.
25 Briggs, Victorian People, p. 7.
26 Alexis de Tocqueville, Democracy in America (Mentor edition), p. 50.