The Eden Treaty, named after the British negotiator William Eden, was signed in 1786 between France and England. It is notable for a few reasons. One is it reflected the new ideas from the Physiocrats, who promoted a more liberal trade policy between countries. Adam Smith was not technically a Physiocrat, but he aggressively argued against Mercantilism. In fact, he coined the term “Mercantilism” in the 18th century, to describe the prevailing polices of the time.
That’s the other notable thing about this deal. France and Britain were longtime rivals and both countries were committed to Mercantilism, yet they struck one of the first “free trade “deals or at least the first deal premised on philosophy of free trade. Even today, many free market types will argue that trade can overcome even the bitterest of rivalries. People like making money more than they like making trouble, so the theory goes. This trade deal is proof of that.
The most notable part of the deal is that it was a disaster for France. Soon after the deal was signed, there was a flood of British manufactured goods into France. Importation of British goods doubled. This put enormous pressure on the already distressed French industries, setting off riots and revolts. Naturally, this put pressure on the already strained relations between the provinces and the crown. Most historians count the Eden Treaty as one of the contributing factors leading up to the French Revolution.
What the French government did not understand when negotiating the treaty is that trade is not a static thing. Even if the French could vastly increase their sale of wine and linens to Britain, in order to offset the import of British manufactured goods, there would still be significant economic dislocation in the French economy. The wine merchants would be happy, but the French cotton mills in Normandy would be devastated, which is why riots broke out there soon after the deal was implemented.
Trade between nations can be a very good thing for both nations. It can be a terrible thing too. It’s not always easy to know in advance. World trade rapidly expanded in the 19th century as shipping costs plummeted and trade barriers fell. Not only did European economies boom, the quality of life for their citizens rapidly increased. In 1870, British life expectancy was 41. In 1913 it was 53. Food prices plummeted by 80%, thus eliminating malnutrition for most of Europe.
It was not just economics that changed with the global trade boom in the 18th century. Cultures changed too. Close to half a million foreign-born laborers worked in the heavy industries of French Lorraine and Germany’s Ruhr. It’s impossible to overstate the radical nature of this. For most of human history, the mass movement of people meant war. Suddenly, it was encouraged. Trade was so good that smart people were convinced it had made war impossible.
Of course, not long after publication of The Great Illusion, war broke out in Europe. Over the next five years the industrial powers of the world tried very hard to exterminate one another. Was trade the cause of war? Not exactly, but trade was not a magical solution to the age old problems of the competition between peoples. No matter how much commerce there was between the Germans and the French, the Germans, as sensible people, would still hate the French.
The topic of trade is a good place to start when wondering about what went wrong with American conservatism. One of the foundation stones of Anglo-Saxon conservatism is the understanding that there must be a balance between tradition and progress. Another is the understanding that 2+2 always equals four, for all values of two. Trade that benefits one part of the nation’s economy, will be balanced out by some detriment to another part of the economy, or even the culture, which always has to be put into the balance.
It is not zero sum game, but close enough to assume so. Therefore, trade policy is about picking winners and losers.This is where libertarians lurch into fantasy. They argue that “free trade” gets the state out of the business of picking winners and losers. In reality, it amplifies the state’s role in that process. The reason is, all trade deals are negotiated by men with agendas, friends, and selfish reasons to want some things and reject others. Men are not angels and neither are their governments, so neither are their trade deals.
Modern American conservatives took a long drag from the libertarian bong, with regards to trade, and came away believing all the fantasies about free trade. Worse yet, they have made global trade a totem. Anyone that questions the wisdom of anything related to global trade is labeled a heretic. The result is we have chubby nihilists at the flagship publication of American conservatism, cheering the destruction of large swaths of American society, all in the name of free trade and other economic fantasies.
Trade, like every other public policy, is about trade-offs. The point of popular government, however structured, is to debate these polices in public. While never perfect, it reduces the chances of trade-offs that benefit the few at the expense of the many. Trading citrus products to Canada for hockey pucks and beaver hats is good for both sides. Giving Ford a free pass to avoid US labor, tax and environmental laws by moving their plants to Mexico is an entirely different discussion.
It is what makes popular government fundamentally conservative. Pubic debate over public policy is not about protecting the poor from the predation of the rich. It is about protecting the powerful from one another and limiting their natural inclination to consume that which supports their position in society. The managerial authoritarianism of modern conservatism insulates the powerful the consequences of their behavior. The lesson of history, the lesson of Burke, is that this always ends in blood.