How Free Trade Changed

the Enlightenment World

Andrew J. Hamilton / History News Network @myHNN

Dec. 12, 2016

Universal Images Group / Getty ImagesAn 18th-century illustration of Adam Smith (1723-1790),
Scottish philosopher and economist.

A relatively unknown Enlightenment writer has emerged as an

important contributor to this chapter in the history of political economy

This post is in partnership with the History News Network, the website that puts the
news into historical perspective. The article below was originally published at HNN.

As Europe grapples with Brexit and America faces a president-elect promising to wall
off-off its neighbors and raise tariff barriers, we might recall how these questions of
borders and the limits of international cooperation were approached by eighteenth-
century thinkers. One of the Enlightenments great innovations, laissez-faire economics,
systematized in Adam Smiths Wealth of Nations, was promoted on claims that it
transcended national borders and was an international, cosmopolitan arrangement.
Well-known members of the Enlightenment writers like Adam Smith and David
Hume in Scotland, and the French philosophes Voltaire and Montesquieu promoted
the new system of open trade, making the case for the civilizing, humanizing effects of
laissez-faire economics, a connection which has been implicit ever since.

Recently, a relatively unknown Enlightenment writer has emerged as an important

contributor to this chapter in the history of political economy. Benjamin Vaughan was a
well-connected Anglo-American merchant and writer. He played a significant (though
secret) role in the peace deal to end the American Revolution, serving as go-between for
British Prime Minister Shelburne and the American statesman, Benjamin Franklin, at
the Paris peace negotiations in 1782-3. Vaughan was a student of Smiths economic
theory and he used that knowledge to recommend a novel relationship between Britain
and the newly-independent America. Moving beyond the hierarchy of imperial rulers
and subjects, Vaughan urged the two sides to establish a transatlantic partnership based
on free, open trade. In suggesting that international relationships be based not on self-
interested politics but rather on mutually-beneficial trade agreements, Vaughan was
making a very modern argument.

Five years after Paris, in 1788, Vaughan published his chief contribution to the field of
political economy, New and Old Principles of Trade Compared. It was an unabashed
celebration of the economic principles found in The Wealth of Nations, designed to
amplify Smiths argument for free and open trade as the only reasonable basis upon
which to build peaceful international relations.

Vaughan framed his discussion in terms of what the economist Albert Hirschman
identified as the doux-commerce thesis. This was a set of arguments that promoted free
trade based on the premise that unhindered commercial development would bring with
it important side benefits, including social harmony and international accord. In this
vein, Vaughan promised that in addition to the commercial benefits of free trade, a
country embracing the new, liberal system stood to benefit from a variety of non-
material advantages, or what Hirschman called an external economy. In particular,
Vaughan made the case that laissez-faire economics would have civilizing effects upon
social manners and international relations. Vaughan made a clear connection between
free trade and international accord. Peace, he wrote, [is] the best friend both of
commerce and mankind, while protectionism leads to animosity and bloodshed.

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Vaughan did not imagine that wars could be completely eliminated, even in a situation
of free and open international trade, but he reasoned that the logic of the easy system
might compel states reciprocally to allow a mutual freedom to commerce during the
very period of hostility. Vaughan insisted that if commercial ideas of a proper kind
could be introduced among turbulent and martial neighbors, they would clearly
contribute to soften and dispose them to tranquility.

And Vaughan pushed his argument further, suggesting that the very geography of the
globe seems to reflect the Creators favorable view of laissez-faire economics. For
example, he pointed to the fact that different trade items are found in disparate
locations, not equally dispersed throughout the world. Clear evidence, he reasoned, that
God is motivating us towards international trade and cooperation. Referring to such
providential diffusion of goods around the globe, Vaughan surmises that these
commodities have been distributed in such a way as to compel nations to engage in open
commerce with one another, and to acknowledge their common humanity:

In seeking national opulence, we must not entirely lose the idea of men being of one
race, and of men and animals and the great globe itself belonging to the common
Creator of them all. [W]e must avail ourselves of that mutual aid which nature has
provided for man, when she allows different places abounding in different commodities
and different wants, to have the means of a mutual intercourse.

By Vaughans reasoning, free trade becomes not just the most rational, efficient
economic policy, but a powerful social system that promotes the values of modern
civilization, which he takes to include civility, peace, and international harmony.
Vaughan concluded his text with a cosmopolitan pledge, quoted from Hume: [N]ot
only as a man, but as a British subject, I pray for the flourishing commerce of Germany,
Spain, Italy, and even France itself. Historian Anthony Pagden used this same quote to
exemplify the shift from ancient attitudes of imperial competition towards more modern
postures of international cooperation centered on commerce. Pagden employed the
quote to defend his assertion that for modern theorists like Hume (and Vaughan),
commerce replaces conquest; conversation and the voluntary exchange of goods are
substituted for war. This is all taken to be part of a more general civilizing process, the
development of rule of law, and what have come to be known as open, market societies.

Here we can make a connection to contemporary strategies of international cooperation.

Historians of the European Union have suggested that the ideological roots for such a
federation can be traced to the Enlightenment. For example, Sebastiano Maffetone has
reminded us that Kants 1797 treatise, On Perpetual Peace, identified three principles
that would address the woes then afflicting Europe. Kants key postulate was the
creation of an international community based on commerce and free trade. In this
regard Vaughan seems to have anticipated Kant by almost a decade.

It is clear that in Vaughans essay the focus has, in the words of J.G.A. Pocock, shifted
decisively from the political and military to that blend of the economic, cultural and
moral which we call the social for short. Here again is the pivot from notions of empire
to ideas of federation, from conquest to commerce, the very shift that Vaughan had seen
first-hand at the Paris peace negotiations as America broke free from the British
Empire, and reformed itself as a republic.

Reflecting upon these eighteenth-century arguments in favor of increasing

internationalism is important today because they inform our notions of modernity and
remain implicit in much of our political and economic discourse. The Enlightenment set
the terms for the bulk of our contemporary conversation about how states should
interact in the world. If we are now reconsidering that understanding, it is important for
us to comprehend exactly what it is that we are reconsidering. It is also worth noting
that just as Vaughns ideas about cosmopolitanism developed in the context of Britains
reconceptualization of itself as it lost its American colonies, so now Britain must again
reconsider its sense of self in a world where it has separated from the European Union.
Should America decide to go down the same path, further isolating itself from its
southern neighbors and others in the global community, these precursors are surely
worth taking into consideration.

Andrew Hamilton is Associate Professor of History and Chair of the Department of

History and Philosophy at Viterbo University. His publications include Trade and
Empire in the 18th-Century Atlantic World (2008) and, most recently, the biographical
essay on Benjamin Vaughan in the Bloomsbury Encyclopedia of the American
Enlightenment (2015).

Further reading:

Scott Breuninger and David Burrow, eds., Sociability and Cosmopolitanism: Social
Bonds on the Fringes of the Enlightenment (London: Pickering and Chatto, 2012).
Pankaj Mishra, Down with Elites! Rousseau in the age of Trump and Brexit, The New
Yorker, August 1, 2016, pp. 68-72.

Andrew Hamilton, Trade and Empire in the Eighteenth-Century Atlantic

World (Cambridge: Cambridge Scholars Press, 2008)

Felix Gilbert, To the Farewell Address: Ideas of Early American Foreign

Policy (Princeton: PU Press, 1961).

Albert O. Hirschman, The Passions and the Interests: Political Arguments for
Capitalism before its Triumph (Princeton: Princeton University Press, 1977).

Benjamin Vaughan, New and Old Principles of Trade Compared; or a treatise on the
principles of commerce between nations, with an appendix (London, printed for J.
Johnson and J. Debrett, 1788).

Jacob Viner, The Role of Providence in the Social Order (Princeton: Princeton
University Press, 1972).

Anthony Pagden, Lords of All the World (New Haven, London: Yale University Press,
1995).

Sebastiano Maffetone, The Legacy of the Enlightenment and the Exemplarity of the EU
Model, in The Monist, vol. 92, no. 2 (2009), pp. 230-257.