Robert Tombs
To a non-economist like me, blind to the subtleties, it seems that the basic debate over trade hasn’t changed for centuries. Today, we are in the middle of a trade war that Louis XIV’s great minister, Jean-Baptiste Colbert, the leading practitioner of mercantilism in the mid-17th century, would have thoroughly understood. Grab for your country a bigger share of world trade, reduce imports and increase exports, and you will be richer and more powerful. There is a brutal common sense to this idea that has enabled it to survive the exhaustive critique of Adam Smith a century later. After all, two of the most powerful men in the world, US president Donald Trump and his counterpart in China, Xi Jinping, remain in the Colbertist camp.
Smith, a far greater intellect, published The Wealth of Nations in 1776 not merely as economic theory, but also as a blueprint for modernity – a ‘commercial society’ superseding feudalism, violence and oppression. Freedom of trade would increase overall wealth, international cooperation, individual liberty and equality. Not least, it would prevent producers’ lobbies from conspiring against the public, including by abuse of political power – as 19th-century French economist Frédéric Bastiat put it, candlemakers would put a tariff on sunlight.
Smith’s view of unlimited expansion of wealth through increasing economic activity from which all could gain was the opposite of the mercantilist assumption of violent competition for limited resources. Mercantilists equated wealth with the accumulation of gold, of which there was a limited quantity. After Smith, this seemed absurd. Perhaps it seems less so today: what if the wealth and power of states in the future depends on the seizure of limited resources, most obviously rare minerals and energy sources?
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