September 2, 2015

The Humanity of Trade

By In Blogs, Brian Jacobson
As You Can Tell All Great Libertarians Smoked
As You Can Tell All Great Libertarians Smoked

Frank Chodorov (February 15, 1887 – December 28, 1966), like Murray Rothbard, was the son of Jewish immigrants to lower west-side New York. He was to many the last of the Old Right greats. The Old Right was an incredibly free-market yet non-interventionist anti-war movement within Republicanism in the early parts of the 20th century. He taught at and later directed the Henry George School of Social Science and edited the School’s paper, The Freeman. In Chodorov’s circle of friends were such characters as Albert Jay Nock, H.L. Mencken, and in 1947 he met Murray Rothbard at a dinner party. According to Rothbard “Frank was sui generis,” and from early days to late Chodorov “saw the State as a profoundly anti-social institution, the canker in the heart of any attempt at peaceful cooperation by free individuals in society.”

Chodorov’s chapter “The Humanity of Trade” in his book The Rise and Fall of Society is one such example of his view on how the State prohibits cooperation, promotes prejudice, and is truly the anti-social institution of society. The free-market, to Chodorov, was the great system of channelling goods and services in which men could interact and cooperate “to diffuse satisfaction.” Our recent podcast gives some of the economic reasons for free-trade so I will leave those out here. What’s even more important, as the title of Chodorov’s title suggest, is the very human and very social aspect of free trade. Free trade of goods means free interactions of individuals. It destroys “the narrow prejudice of provincialism.” On the other hand, the blockades, sanctions, propaganda, and UN resolutions encourage us to hate our international neighbor and engender ignorance and suppress any mercy we might have for other image bearers of God. Here is Chodorov:

“Wherever two boys swap tops for marbles, that is the marketplace. The simple barter, in terms of human happiness, is no different from a trade transaction involving banking operations, insurance, ships, railroads, wholesale and retail establishments; for in any case the effect and purpose of trade is to make up a lack of satisfactions. The boy with a pocketful of marbles is handicapped in the enjoyment of life by his lack of tops, while the other is similarly discomfited by his need for marbles; both have a better time of it after the swap.

In like manner, the Detroit worker who has helped to pile up a heap of automobiles in the warehouse is none the better off for his efforts until the product has been shipped to Brazil in exchange for his morning cup of coffee. Trade is nothing but the release of what one has in abundance to obtain some other thing one wants. It is as pertinent for the buyer to say “thank you” as for the seller.

The marketplace is not necessarily a specific site, although every trade must take place somewhere. It is more exactly a system of channeling goods or services from one worker to another, from fabricator to consumer, from where a superfluity exists to where there is a need. It is a method devised by man in his pursuit of happiness to diffuse satisfactions, and operating only by the human instinct of value.[…]

Living without trade may be possible, but it would hardly be living; at best it would be mere existence. Until the marketplace appears, men are reduced to getting by with what they can find in nature in the way of food and raiment; nothing more. But the will to live is not merely a craving for existence; it is rather an urge to reach out in all directions for a fuller enjoyment of life, and it is by trade that this inner drive achieves some measure of fulfillment.[…]

The marketplace serves not only to diffuse the abundances that human specialization makes possible, but it is also a distributor of the munificences of nature. For, in her inscrutable way, nature has spread the raw materials by which humans live over the face of the globe; unless some way were devised for distributing these raw materials, they would serve no human purpose. Thus, through the conduit of trade the fish of the sea reach the miner’s table and fuel from the inland mine or well reaches the boiler of the fishing boat; tropical fruits are made available to northerners, whose iron mines, translated into tools, make production easier in the tropics. It is by trade that the far-flung warehouses of nature are made accessible to all the peoples of the world and life on this planet becomes that much more enjoyable.

We think of trade as the barter of tangible things simply because that is obvious. But a correlative of the exchange of things is the exchange of ideas, of the knowledge and cultural accumulations of the parties to the transaction. In fact, embodied in the goods is the intelligence of the producers; the excellent woolens imported from England carry evidence of thought that has been given to the art of weaving, and Japanese silks arouse curiosity as to the ideas that went into their fabrication. We acquire knowledge of people through the goods we get from them. Aside from that correlative of trade, there is the fact that trading involves human contacts; and when humans meet, either physically or by means of communication, ideas are exchanged. “Visiting” is the oil that lubricates every marketplace operation.

It was only after Cuba [he wrote before the revolution] and the Philippines were drawn into our trading orbit that interest in the Spanish language and customs was enlivened, and the interest increased in proportion to the volume of our trade with South America. As a consequence, Americans of the present generation are as familiar with Spanish dancing and music as their forefathers, under the influence of commercial contacts with Europe, were at home with the French minuet and the Viennese waltz. When ships started coming from Japan, they brought with them stories of an interesting people, stories that enriched our literature, broadened our art concepts, and added to our operatic repertoire.

It is not only that trading in itself necessitates some understanding of the customs of the people one trades with, but that the cargoes have a way of arousing curiosity as to their source, and ships laden with goods are followed with others carrying explorers of ideas; the open port is a magnet for the curious. So, the tendency of trade is to break down the narrowness of provincialism, to liquidate the mistrust of ignorance. Society, then, in its most comprehensive sense, includes all who for the improvement of their several circumstances engage in trade with one another; its ideational character tends toward a blend of the heterogeneous cultures of the traders. The marketplace unifies Society.[…]

The isolationism that breeds an ingrown culture and a mistrust of outside cultures melts away as faster ships, faster trains, and faster planes bring goods and ideas from the great beyond.

The perimeter of Society is not fixed by political frontiers but by the radius of its commercial contacts. All people who trade with one another are by that very act brought into community.

The point is emphasized by the strategy of war. The objective of a general staff is to destroy the marketplace mechanisms of the enemy; the destruction of his army is only incidental to that purpose. The army could well enough be left intact if his internal means of communication were destroyed, his ports of entry immobilized, so that specialized production, which depends on trade, could no longer be carried on; the people, reduced to primitive existence, thus lose the will to war and sue for peace. That is the general pattern of all wars. The more highly integrated the economy the stronger will be the nation in war, simply because of its ability to produce an abundance of both military implements and economic goods; on the other hand, if its ability to produce is destroyed, if the flow of goods is interrupted, the more susceptible to defeat it is, because its people, unaccustomed as they are to primitive conditions, are the more easily discouraged. There is no point to the argument as to whether “guns” or “butter” is more important in the prosecution of war.

It follows that any interference with the operation of the marketplace, however done, is analogous to an act of war. A tariff is such an act. When we are “protected” against Argentine beef, the effect (as intended) is to make beef harder to get, and that is exactly what an invading army would do. Since the duty does not diminish our desire for beef, we are compelled by the diminished supply to put out more labor to satisfy that desire; our range of possibilities is foreshortened, for we are faced with the choice of getting along with less beef or abstaining from the enjoyment of some other “good.” The absence of a plenitude of meat from the marketplace lowers the purchasing power of our labor. We are poorer, even as is a nation whose ports have been blockaded.

Moreover, since every buyer is a seller, and vice versa, the prohibition against their beef makes it difficult for Argentineans to buy our automobiles, and this expression of our skills is constricted. The effect of a tariff is to drive a potential buyer out of the marketplace. The argument that “protection” provides jobs is patently fallacious. It is the consumer who gives the worker a job, and the consumer who is prevented from consuming might as well be dead, as far as providing productive employment is concerned.

Incidentally, is it jobs we want, or is it beef? Our instinct is to get the most out of life with the least expenditure of labor. We labor only because we want; the opportunity to produce is not a boon, it is a necessity.[…]

Just as trade brings people together, tending to minimize cultural differences, and makes for mutual understanding, so do impediments to trade have the opposite effect. If the customer is always “right,” it is easy to assume that there is something wrong with the nonbuyer. The faults of those who refuse to do business with us are accentuated not only by our loss but also by the sting of personal affront.

Should the boy with the tops refuse to trade with the boy who has marbles, they can no longer play together; and this desocialization can easily stir up an argument over the relative demerits of their dogs or parents. Just so, for all our protestations of good neighborliness, the Argentinean has his doubts about our intentions when we bolt our commercial doors against him; compelled to look elsewhere for more substantial friendship, he is inclined to think less of our national character and culture.

The byproduct of trade isolationism is the feeling that the “outsider” is a “different kind” of person, and therefore inferior, with whom social contact is at least undesirable if not dangerous. To what extent this segregation of people by trade restrictions is the cause of war is a moot question, but there can be no doubt that such restrictions are irritants that can give other causes for war more plausibility; it makes no sense to attack a good customer, one who buys as much of our products as he can use and pays his bills regularly. Perhaps the removal of trade restrictions throughout the world would do more for the cause of universal peace than can any political union of peoples separated by trade barriers; indeed, can there be a viable political union while these barriers exist? And, if freedom of trade were the universal practice, would a political union be necessary? […]

The myth of “protectionism” rests on the notion that the be-all and end-all of human life is laboring, not consumption — and certainly not leisure. […]

Yet, if we base our thinking on the natural urge of the individual to better his circumstances and widen his horizon, operating always under the natural law of parsimony (the most gain for the least effort), we are compelled to the conclusion that effort which does not add to the abundance of the marketplace is useless effort. Society thrives on trade simply because trade makes specialization possible, specialization increases output, and increased output reduces the cost in toil for the satisfactions men live by. That being so, the marketplace is a most humane institution.” (from The Rise and Fall of Society)

Far more important than any economic point made by Adam Smith, Frederic Bastiat, Ludwig von Mises, or Murray Rothbard is that any law against free-trade is a violation of scripture’s command “you shall love your neighbor as yourself,” (Mark 12:31) and that “whatever you wish that others would do to you, do also to them, for this is the Law and the Prophets,” (Matt 7:12). In fact God explicitly forbid having one set of laws for the native and another for the strangers who sojourns among you (Ex. 12:49) which is exactly what tariffs are. It frankly doesn’t even matter whether free-trade is “good” or “bad” for the U.S. or if China is “killing” us in trade. Tariffs are simply a violation of the eighth commandment; stealing from your international neighbor. We have no authority to stop poor people from other countries from participating and selling in our markets. If other countries are becoming more productive and if impoverish Chinese individuals and image bearers of God who suffered for years under the brutality of communism are being given jobs, then we should rejoice with them.  Complaining on Facebook about Mexicans, Chinese, and other poor countries getting job is not just bad economics its hatred for your neighbor, and its sin.

Written by Brian Jacobson

Brian Jacobson works as a quality technician for a manufacturing company in St. Louis, Mo where he lives with his new bride. He studied biblical and theological studies at Reformation Bible College under R.C. Sproul in Orlando, FL. He’s an Old-School Presbyterian who enjoys the simple means of grace, Machen, and living the high life on a budget. Follow him @briankjacobson on Twitter.
  • Jim Carroll

    Very nice post. And given Sanders and Trump and even the noises Hillary is making (since she seems to be a shallow reflection of the current poles), also very timely.

    “Our recent podcast gives some of the economic reasons for free-trade …” I’m hoping you have one coming out soon. It’s currently my favorite podcast and I’ve sent links to several episodes to friends of mine.

    • Brian K. Jacobson

      It’s recorded, being edited, and will be out shortly. C Jay had some technical difficulties. Great to hear though.