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22.03.2021

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Free trade

Free trade (English free trade “free trade”), Manchester (by the name of the school) – a trend in economic theory, politics, and economic practice, proclaiming the freedom of trade and non-interference of the state in the private sphere of society.

In practice, free trade usually means the absence of high export and import duties and non-monetary restrictions on trade, such as import quotas for certain goods and subsidies for local producers of certain goods. Free trade is supported by liberal parties and movements; opponents include many left-wing parties and movements (socialists and communists), human rights and environmentalists, and trade unions. [source did not specify 4276 days]

One of the earliest theories of trade was mercantilism, which emerged in Europe in the 16th century. In the 18th century, protectionism was heavily criticized in the writings of Adam Smith, whose teachings can be considered the theoretical basis of free trade. In the 19th century, Smith’s views were more fully developed in the writings of David Riccardo. The logical completion of the concept of economic liberalism, coverage of the practices of its modern application took place in the Manchester school.

The main message of the development of “free trade” was the need for the sale of excess capital imported into the economy by developed countries (England, France, hereinafter the USA) in the 18th century in order to avoid the depreciation of money, inflation, as well as for the export of manufactured goods to the participating countries and colonies.

Story. Early era

The concept of a free trading system, encompassing many sovereign states, originated in its infancy in the Spanish Empire in the 16th century [1]. American lawyer Arthur Nussbaum noted that the Spanish theologian Francisco de Victoria was “the first to formulate the concepts (though not terms) of freedom of trade and freedom of the seas.” Victoria did this work in accordance with the principles of jus gentium. However, it was the first two British economists, Adam Smith, and David Riccardo, who later developed the idea of ​​free trade in its modern and recognizable form.

Free trade economists believed that trade was the reason for the economic prosperity of some civilizations. For example, Smith pointed to the rise in the trade as the reason for the flourishing not only of Mediterranean cultures such as Egypt, Greece, and Rome, but also Bengal (East India) and China. The great prosperity of the Netherlands after the rejection of Spanish imperial rule and the pursuit of a free trade policy made the free trade/mercantilism dispute the most important economic issue for centuries [3]. Free trade policy has fought for centuries against mercantilist, protectionist, isolationist, socialist, populist, and other politicians.

By the 18th century, the Ottoman Empire pursued a liberal free trade policy, which began with the capitulations of the Ottoman Empire, starting with the first trade treaties signed with France in 1536 and continued by capitulations in 1673, in 1740 when import and export duties were reduced only up to 3%. The Ottoman free trade policy was highly praised by British pro-free trade economists such as John McCulloch in his Commercial Dictionary (1834). However, she was criticized by British anti-free trade politicians such as Prime Minister Benjamin Disraeli, who cited the Ottoman Empire as “an example of the damage done by unbridled competition” in the 1846 grain law debate, claiming that she destroyed that,

Trade-in colonial America was regulated by the British trading system through navigational acts. Until the 1760s, few colonists openly advocated free trade, partly because the rules were not strictly enforced (New England was famous for smuggling), but also because colonial merchants did not want to compete with foreign goods and shipping. According to historian Oliver Dickerson, the pursuit of free trade was not one of the reasons for the American Revolution. “The idea that the basic trading practices of the eighteenth century were wrong,” Dickerson wrote, “was not part of the thinking of revolutionary leaders.”

Free trade came to the United States as a result of the Revolutionary War. After the British Parliament passed a prohibitive act blocking colonial ports, the Continental Congress responded by effectively declaring economic independence by opening American ports to foreign trade on April 6, 1776. According to historian John W. Tyler, “The RI trade was imposed on the Americans, whether they like it or not.”

In March 1801, Pope Pius VII ordered some trade liberalization to counter the economic crisis in the papal provinces with the help of the motu proprio Le più colte. Despite this, the export of national corn was prohibited to provide food for the papal states.

In Britain, free trade became one of the central principles practiced after the abolition of the Corn Laws in 1846. Large-scale campaigning was sponsored by the Anti-Corn Law League. Under the Treaty of Nanjing, China opened five treaty ports for world trade in 1843. The first free trade agreement, the Cobden-Chevalier Treaty, was concluded in 1860 between England and France, leading to successive agreements between the rest of Europe.

In free trade, the seller is the master and the producer is the slave. Protection is just a law of nature, the law of self-preservation, self-development, ensuring the highest and better destiny of the human race. They say that protection is immoral. After all, if protection accumulates and elevates 63,000,000 [US residents] people, then the influence of those 63,000,000 people elevates the rest of the world. We cannot take a single step on the path of progress without bringing benefit to all of humanity. Well, they say, “buy where you can buy the cheapest”…. Of course, this applies to work, as well as to everything else. Let me give you the maximum, which is a thousand times better than this protection: “Buy where it is easiest for you to pay. And it is on this piece of land that labor receives its highest awards.

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