In the year 1750, the greatest philosopher in the world was the Scotsman, David Hume.
Toward the end of the century, the philosopher who replaced him as the greatest philosopher in the world was Immanuel Kant. Yet, Kant wrote the following: “I freely admit that it was the remembrance of David Hume which, many years ago, first interrupted my dogmatic slumber and gave my investigations in the field of speculative philosophy a completely different direction.” David Hume was the heavy hitter, philosophy wise, in the middle of the 18th century.
In 1752, Hume wrote an essay defending free trade: “On Commerce.” A quarter of a century later, his close friend Adam Smith wrote The Wealth of Nations, which was basically an 800-page extension of David Hume’s original essay.
Most economists today favor free trade. There are a few exceptions, and there have always been exceptions. In contrast, in their judicial capacity as voters, the general public has never been persuaded of the free trade position. Even among the voters who claim to be defenders of the free market, when push comes to shove, they are still mercantilists. They still hold the economic position defended by the early economists of the late 17th century, against whom David Hume and Adam Smith directed their intellectual firepower.
We get back to the bedrock reality of human thought, namely, that most people cannot follow long chains of reasoning. Only a relatively small group have this ability, and only within their specialties. Even they get sidetracked when it is in their economic self-interest to stop following a particular chain of reasoning.
FREE TRADE AND FREE MEN
The touchstone of whether a person really believes in the free market is his attitude on free trade. This has certainly been true since 1776, when Smith wrote his book. The basic arguments in favor of free trade have not changed since 1776, or even 1752. The basic arguments for mercantilism have not changed since about 1670. We can find defenders of both positions among professional economists.
American manufacturers are almost instinctively mercantilists. They don’t want competition from abroad, and they scrounge around in search of any kind of argument to defend the imposition of federal sales taxes on imports, which is what all tariffs are. It has nothing to do with logic. It has everything to do with pocketbooks.
We find that there are few defenders of free trade among American textile manufacturers. We find that special interest groups in the manufacturing sector hire professional economists to defend the special interest group’s call for tariffs, import quotas, and other restrictions on competition from outside the borders of the United States. They always find economists who are willing to abandon their commitment to free market principles for the sake of a high salary. These economists journey to Washington to testify before congressional committees, and they present graphs, arguments, and even equations in favor of government restrictions on imports.
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