Free Trade,unfounded Anglo-Saxon Myth I.
Free exchange of goods is presented by the US,the UK and all the international trade organizatons in which they have a say in (IMF , WB, WTO) as the panacea,a universal medicine, stimulating the economy in development .The history,however,proves that free trade is an illusion.The main protagonists of the free exchange of goods,the US and the UK, have built up their economy on the hard measures of protectionism which they are now demonizing … The collapse of the communism opened new markets for free exchange of goods , significant regional trade agreements were concluded in the 1990s,e.g. on the free trade between CAN,US and Mexico and this development was crowned by the fact that the Uruguay Round of GATT, closed in Marrakesh in 94 , resulted in the establishment of the WTO in 95 …
When the crisis over the irrecoverable endebtment of the developing countries burst out at full in 1982 with the Soviet block with Brezhnev´s death already in agony, the IMF and the WB were threatening the developing countries either to liberalize their trade drastically or else they would not lend them a cent any more …The developing countries (whose governments, sadly, mostly work for the profit of the government members´clans only ) could not other but to follow the „recommendation „ .
The Anglo-Saxon allies are deeply convinced that they are acting properly in line with the progress and in harmony with the history believing or pretending that the free trade was one of the pillars of their successful economic development … Actually,they have very bad memory : the US and the UK at the stage of development did not follow any single rule they are today imposing on others …
The UK is no historical example of free exchange of goods, just the contrary : it made use of every directivist policy which was advantageous for its industry ,protecting it and sponsoring it … In nearly forgotten book of Daniel Defoe, the author of Robinson Crusoe,titled A Plan of the English Commerce from 1728,the author comments on the British directivist economic strategy which was also used in the 14th cent. by Edouard III,and especially in the 15th cent. by the Tudor Henry VII (1485-1509) and ElisabethI (1558-1603) who by toughly protectionist decrees equipped Britain with the most powerful wool industry in the world (England in this time was happy only to export raw wool to Netherlands ) .These monarchs in order to strengthen the local manufactures imposed high customs on the raw wool export and at the same time they launched a powerful campaign to make Netherlands skilled wool experts to emigrate to Britain …
In the period between 1721, when Robert Walpole, one of the first British prime ministers who started the reform of the British economy policy,and the year 1846,when the British Corn Laws were cancelled , the UK carried out an especially voluntarist trade policy – customs protectionist measures , subventions of the export by reducing the export customs fees and the state control of the quality of the exported goods … the measures which the Anglo-Saxons now reproach to Japan and other Asian states.
1846 Britain made the first yet inconsistent step towards the free exchange of goods when it cancelled Corn Laws adopted in 1815 under the pressure of the landlords despite the protests of the industrial oligarchy which imposed high import duties on the import of corn from the Continent. The cancellation of the Corn Laws killed mercantilismus and opened the door for the policy of classical liberalism … However, historian Charles Kindleberger in his book Germany´s Overtaking of England 1806-1914 (Harward U.Press 1978) asserts that on the Britain´s part there was no question of adopting a progressive principle but a free-exchange imperialism only with the aim to stop the industrialisation of the Continent by enlarging the market for its raw materials and agricultural products which was the argumentation of the Anti-Corn Law League representatives. It was also the opinion of German economist Friedrich List who in the 19th cent. wrote that
„Britain´s preaching about the advantages of free trade makes rather impression of kicking away the ladder for those trying to climb it to reach the rung at which we are sitting…“ To sum it up ,the technology advance of Britain which made it to adopt free trade and throw off protectionism was reached through longtime ultrahigh protectionist customs barriers .
While Britain was the first state to adopt the state protectionism, the US is the homeland of the modern protectionism which was promoted by its first minister of finance Alexander Hamilton as the free exchange of goods met the needs of Britain but not those of the US, and forgotten economist Daniel Raymond.Fridrich List which is mistaken for being the Father of modern protectionism got familiar with it during its stay in the US in 1820 .
The American politicians understood well that the US was not prepared for a free trade although the prominent economists of that time as British Adam Smith or Frenchman Jean-Baptiste Say were discouraging them from the protectionist measures to protect the US industry (again it looks like kicking away the ladder) and to develop the agriculture instead … The Americans, however, did not listen to the world economists and during the whole period from 1830 to 1945 its customs tariffs on the import of industrial goods were the highest in the world (on average 48%) …
Here it is necessary to state that the main stake in the American Civil War
1861-65 when 11 southerner states seceded from the Union in protest against election of Abraham Lincoln the US pres. was not the abolition of slavery on whose labour their plantations lived on but the customs tariffs because AL was also a hardline promoter of the state protectionism …
Lincoln was no human rights fighter,considering the blacks „ for an inferior race“ but the slavery obstructed the economic development …
Lincoln wrote „ If I could save the Unie by not liberating the blacks, I would do it …“ (book History of the US ) which means that his Declaration on the Slavery Abolition from 1863 was no moral matter but only a political strategy how to win the war … ( the Southenrs stopped to behave like slavers as late as in 1970´s , it took them 110 yrs to get used to the idea ) … The slavery issue split the Americans as early as in 1850, and only the negotiations led by Henry Clay stopped the Americans to start the civil war ten yrs earlier …
Because of the customs tariffs which they considered to be advantageous only for the industrial north the southerner states threatened to secede as early as in 1833 …The protectionism relay took over charismatic Henry Clay ,four times unsuccessful presidential candidate, who is the Father of the idea from 1820 to repatriate the ex-slaves to later Liberia .
Only as late as after the WWII when its industrial superiority had been unmatched with Britain heavily economically weakened and deeply endebted by the US , the US began very slowly liberalize its aggressively protectionist business strategy (less slowly than Britain of 19th cent.) and slipped into the role of the chief free trade promoter … After the UK, the US proved the accuracy of the metaphor of F.List and the affirmation of the Ulysse Grant, the hero of the CW and a US pres. „ England had lived on the protectionism for two centuries and applied it to the extremes. When it had exploited it to the last bit, it adopted a doctrine of free trade .When the US in 200 yrs will have exploited the protectionism to the last bit, it also will adopt the doctrine of free trade … „
Therefore it is sweet to know that the aggressive protectionism were applying Britain and the US, considered to be the strongholds of economic liberalism, and not Germany,France or Japan considered to be the strongholds of the state interventionism …
The exception from the historical model represents the Netherlands and Helvetian Rep. which had reached their technology superiority ( based in NL on the previous state protectionism) as early as by the end of the 17th cent.so they did not need any protectionist barriers any more .Switzerland had no law on the patents and inventions until 1907 laughing in this way at the current orthodoxy of the intellectual property rights protection … the Netherlands abolished its law on the patents and inventions from 1817 in 1869 claiming that it is the monopol created by the state not in accordance with the principle of free trade which the anglo-saxon countries may have overlooked because they are supporting the WTO´s Agreement on the intellectual property rights connected with the business activities …
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