Karl Marx Goes to Davos

Free trade was central to the Manchester School of nineteenth-century British political economy. Associated with the reformers Richard Cobden and John Bright, it challenged protectionist and mercantilist economic policies, most notably the Corn Laws that the Tory party implemented in the wake of the Napoleonic Wars in 1815. The Corn Laws imposed tariffs on imported grain, raising food prices and maintaining the value of agricultural land, which benefited a small and politically powerful aristocratic elite.

Anti–Corn Law campaigners called for tariff reduction to lower food prices and boost competition and trade. These anti-protectionist arguments were embraced by a rising class of Victorian industrialists and manufacturers, concerned that higher food prices meant paying higher wages to workers. The struggle for free trade against the vested interests of the landowning class would shape the ideological foundations of Britain’s nineteenth-century Liberal Party. Through both informal and often violently enforced formal imperial expansion, Britain exported low tariffs throughout the nineteenth-century global economy.

While Britain promoted an “empire of free trade,” its imperial rivals and anti-colonial nationalist movements looked to protectionism. In the early nineteenth century, the United States raised tariffs on international trade and maintained high land prices as part of the “American System” of economic nationalism. In Germany, the economist Friedrich List argued that high tariffs were essential to nurture developing industries, a position advanced in his country’s own protectionist “National System.”

By the end of the nineteenth century and beginning of the twentieth these ideas had spread: anti-colonial nationalist campaigns, from the Indian “Swadeshi” movement to Ireland’s Sinn Fein, deployed boycotts and encouraged domestic production to promote economic self-sufficiency. During the interwar period W. E. B. Du Bois, influenced by protectionist German economics, developed a “pan-African Marxist/Listian framework” which promoted trade barriers for colonized states as a tool of resistance against European imperialism. For both rival empires and anti-colonial nationalists, protectionism and economic self-sufficiency offered tools of resistance to British imperial and economic domination.

In contrast to both the coercive nineteenth century “empire of free trade” and protectionist campaigns to resist it, Pax Economica delves into nineteenth-century political economy to recover a third socialist, internationalist, and anti-imperialist free trade tradition. While free trade may have been the gospel of nineteenth century liberalism, it was also embraced by its socialist critics. For Karl Marx and Friedrich Engels, whose ideas were formed against the same protectionist background as Cobden’s critique of the Corn Laws, free trade was not a goal in itself, but “a progressive condition of industrial capitalism, moving it a step closer to socialist revolution.” Though the liberal radicals of the Manchester School sought a freer capitalism, and the socialist internationalists inspired by Marx and Engels sought its replacement, both traditions viewed free trade as a counterweight to nationalism and militant imperialism.

Another International

The mid-to-late-nineteenth-century free trade and peace movement that Palen describes was large and internationalist in orientation. Its members included the British Cobden Club, the French Ligue internationale et permanente de la paix, the Spanish economistas, the American Free Trade League, and the liberal anti-colonialism of the Indian nationalist and member of parliament for the London constituency of Finsbury, Dadabhai Naoroji. A central influence in Palen’s account of nineteenth-century free trade and peace campaigns is the American “single-tax” movement, spearheaded by the economist Henry George, which called for the state to tax land rather than labor — discouraging land monopolies and eliminating the need for other forms of taxation or tariffs.

The single-tax movement, Palen shows, had a global reach, inspiring the land reform proposals of the Chinese nationalist leader Sun Yat-Sen and the Russian writer Leo Tolstoy. In Edwardian Britain, Cobdenite and Georgist ideas were central to “New Liberal” challenges to Tariff Reform, which advocated for preferential tariffs to turn the British Empire into a trading bloc and influenced the Liberal chancellor David Lloyd George’s proposals to raise taxes on land in his 1909 “Peoples Budget.”

The Labour Party continued to defend free trade over protectionism in the interwar period; when the British Conservative prime minister Stanley Baldwin sought to revive preferential tariffs for countries in the British Empire in 1923, the Labour Party condemned “the Tariff policy and the whole conception of economic relations underlying it” as “an impediment to the free interchange of goods and services upon which civilised society rests.”

After World War I, the free trade and peace movement placed its hopes in the League of Nations. These hopes were dashed by interwar acts that increased tariffs on international trade, like the American Hawley-Smoot Tariff Act of 1930 and the British Import Duties Act of 1932, as well as the economic nationalism of the rising Third Reich in Germany. But the ideals of the free trade and peace movement were kept alive throughout the interwar period and mid–twentieth century by transnational feminist campaigns and the international Christian peace movement.

Feminist organizations like the Women’s International League for Peace and Freedom, Women’s Peace Party, and Women’s Peace Society united around a “Marx-Manchester commingling of liberal radicalism, democratic socialism, and grassroots cooperativism” in campaigns to combat child hunger and advance women’s economic empowerment. During the interwar period, Christian peace organizations like the YWCA, YMCA, and World Alliance for Promoting International Friendship Through the Churches responded to the rise of fascism, economic nationalism, and colonialism with a “Christian cosmopolitan resolve that economic interdependence and international fraternity must underpin a peaceful world order.” These activist coalitions would influence postwar American trade policy through Franklin Delano Roosevelt’s sympathetic secretary of state, Cordell Hull, and help lay the foundations of the 1947 General Agreement on Tariffs and Trade (GATT), which, in 1995, became the World Trade Organization.

Palen’s transnational history of economic thought is deftly executed, traversing a global web of anti-colonial movements, metropolitan politicians, and activist networks. Along the way there are surprising revelations about the left-wing free trade origins of familiar consumer objects and institutions: the board game Monopoly, for instance, was conceived as a tool to teach the evils of land monopolies by the American Georgist feminist Elizabeth Magie; and airport duty-free shops were the brainchild of Irish anti-colonialist Brendan O’Regan, who conceived of tax-free zones as a means to overcome the legacies of British colonial exploitation, promote trade with Northern Ireland, and offer a model for developing economies.

Sometimes this story, littered with appearing and disappearing characters and institutions, can become dizzying. The sixty-nine abbreviations listed in the front matter of the book give some indication of what the reader will contend with. This slight disorientation is a small price to pay for a transnational account spanning two centuries of economic thought.

From Idealism to Neoliberalism

Pax Economica, though undeniably fascinating, impressively researched, and lucid, also prompts questions. Can a political movement that aims to unfetter capitalism really be left wing? While there is no denying that many of the activists and organizations profiled in the book positioned themselves on the political left, early twentieth-century progressive movements in Western Europe and the United States — like those of today — were ideologically capacious big tents, bridging socialist and liberal commitments.

As is the case today, certain goals of economic elites — tariff reduction in the nineteenth century, support for green industries in this era — can coincide with those of progressive forces not strong enough to be in the driving seat. An account that traces an intellectual line between Marx and Engels, Edwardian liberalism, the Roosevelt administration, and the World Trade Organization invites the question of just how left-wing a vision is being reconstructed.

The book also engages only lightly with organized labor — one of the constituencies most concretely affected by and vocally opposed to late twentieth-century multilateral approaches to free trade. Palen’s focus on intellectuals and campaigning groups, as opposed to trade unions and more mainstream economic policymakers, risks overstating the influence of the left-wing free trade tradition he describes.

The final chapter of Palen’s book highlights the unintended consequences and ambiguous afterlives of the left-wing free trade tradition in the latter half of the twentieth century. Free trade pacifists initially embraced the GATT but grew disillusioned as the Cold War reestablished new barriers to economic cooperation. In the face of Cold War retrenchment, left-wing free traders turned to regional trade liberalization, embodied in institutions like the European Economic Community or the African Continental Free Trade Area. In response, the idealistic, pacifist, Christian, and feminist free trade movements refocused their campaigns on fair rather than free trade — a legacy visible in the coffee and chocolate aisles of supermarket shelves today.

While the Christian and feminist movements Palen describes were motivated by democratic idealism, the globalized financial institutions of the late twentieth century that they helped shape, like the GATT and subsequently the WTO, were captured by a neoliberal project devoted, as Quinn Slobodian has shown in Globalists: The End of Empire and the Birth of Neoliberalism, to making markets safe from democracy.

Palen is persuasive in his insistence that while the left-wing “economic peace movement may have unintentionally helped pave the way for neoliberalism’s right-wing ascendancy . . . they should not be conflated with one another.” But the book also highlights the failure of idealistic left-wing free trade movements to safeguard the global economic institutions that they helped create from their neoliberal counterparts.

Last week the Washington Post reported that the World Trade Organization “wasn’t quite dead,” but was “sliding towards uselessness.” Member states, reacting to the United States’ retrenchment from free trade during both the Trump administration’s trade war with China and the Biden administration’s more recent use of domestic subsidies in the 2022 Inflation Reduction Act, have failed to reach agreements and restore the organization’s trade dispute mechanism.

In telling the story, then, of a distinctive, global, and explicitly left-wing free trade tradition, Palen’s book, whose publication coincides with a year in which a possible Republican presidency is set to outline an even more economic nationalist agenda, couldn’t be more timely. It is less clear, however, whether the dreams of nineteenth- and twentieth-century economic cosmopolitans offer a blueprint for today’s left.