Against the Tide: An Intellectual History of Free Trade.

• Author: Leef, George C.

In medieval times, men devoted great efforts to the search for a formula to turn lead into gold, but the endeavor proved futile. People eventually learned they could not turn the trick and stopped trying. Unfortunately, people continue to seek another road to easy riches--trade restrictions.

Since the rise of the European nation-state, many arguments have been advanced purporting to show that a nation can make itself wealthier by restricting trading between its own citizens and others. Tariffs or quotas of the right sort can give a nation a "favorable" balance of trade, protect its "infant" industries, improve its terms of trade, give it a more prosperous industrial mix, protect the high wages of its workers or, in some other way, make it better off than it would be under free trade.

In Against the Tide, Douglas A. Irwin investigates the intellectual history of the debate over free trade. "With uncanny regularity," he writes, "a major theoretical argument for protection surfaces every few decades and sparks controversy among economists about the strengths and weaknesses of the case for free trade" (p. 4). In view of the tendency of Americans to engage in bouts of protectionist rhetoric and policy, one welcomes a book that reaffirms the value of free trade and debunks the arguments against it.

Irwin first leads the reader through the origins of the free trade doctrine--the idea that government interference with trade necessarily reduces economic efficiency and lowers the standard of living. This doctrine took a long time to develop. The ancient Greeks and Romans generally did not advocate trade with foreigners, mainly because they feared that contact with outsiders would contaminate their societies. The early Catholic Church condemned trade because it encouraged avarice and the pursuit of worldly gains. Notwithstanding a few earlier dissenting voices, not until the rise of natural law philosophers such as Suarez and Grotius in the seventeenth century did a confident argument appear in favor of allowing people to trade freely. This argument, however, rested on ethics rather than economics and failed to convince other natural law theorists, such as Emerich de Vattel, who wrote, "Every nation may decide upon what conditions it will receive foreign goods, and may even refuse to receive them at all" (p. 24). This passage demonstrates a great failing in the trade debate--and many other public policy debates--the tendency to speak of the rights and...