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<font face="Verdana" size="2"><font color="#002864" size="5"><strong>Thomas Paine on Commerce</strong></font>
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<font size="4">by Gary M. Galles </font>
<font size="2">[Posted May 26, 2003]
[img][/img] Thomas
Paine is primarily remembered for his fiery rhetoric in favor of American
revolution and independence. But in <em>The
Rights of Man</em>, 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.</font>
<ul>
~ <font size="2">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.</font>
~ <font size="2">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. </font>
~ <font size="2">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...</font>
~ <font size="2">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.</font>
~ <font size="2">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. </font>
~ <font size="2">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. </font>
~ <font size="2">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. </font>
~ <font size="2">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. </font>
~ <font size="2">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...</font>
~ <font size="2">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. </font>
~ <font size="2">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. </font>
~ <font size="2">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...</font>
~ <font size="2">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.</font>
~ <font size="2">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.</font>
~ <font size="2">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.</font></li>
</ul>
<font size="2">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. </font>
<font size="2">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.</font>
<font size="2">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.</font>
<font size="2">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. </font>
<font size="2">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."
<hr align="left" width="33%" SIZE="1">
Gary M. Galles is a professor of economics at Pepperdine University. Send
him </font><font size="2">MAIL</font><font size="2">,
and see his Mises.org </font><font size="2">Daily
Articles Archive</font><font size="2">.</font>
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