US Founded Upon Free Trade

Going all the way back to the earliest days of the Great Depression we have had an ongoing debate about free trade and whether or not it is beneficial to our economy and harms our domestic labor market and thus the middle class.  Employment for our lower and middle classes is important to our economy and for the social well being of the nation and therefore it is an area of legitimate concern.   In any economy the market for any product or service will always seek out the least expensive of these.   Thus it has ever been and will always be.   Over restrictive regulations or taxes on any particular product will certainly diminish the importation of that product and will in theory increase the likelihood of more employment domestically to produce that same product.   Unfortunately, history would show that it doesn’t work on a one to one ration that simply.

So often we find that for every job saved by trade restriction we lose another because we face retaliation from foreigners who restrict the import of our products and services.  There is also the problem that other nations may not have the same restrictions we do and continue to import products we restrict and such importation bolsters their economies and make them more competitive with us.   For the last five centuries at least the great struggles of the European powers has been over disputes regarding trading rights and the access to raw materials or resources.  You all remember your world history lessons about the European nations seeking to find access to the resources of the East.  That quest is what lead to all the great explorations starting with Maro Polo, Magellan, Columbus and all the others great seekers and explorers of that age.  They all wanted free trade but each sought to have an advantage over the others by getting there first and controlling areas through Mercantilist policies.

Early American history is all about trading rights and access to resources.  Likewise most of our early conflicts with England and other nations, notably France, was caused by friction from trading and free access to the ocean and international markets.  The early colonialists were mad at the Mother Country because England wanted to keep a strangle hold on the triangle of trade that ran from England to the Caribbean to the Colonies then back to England.  England prevented “American” ships from being involved in this trade.  The New England seafarers wanted in on this lucrative trade.   We wanted to be able to build our own manufacturing base and transport rum from the Caribbean islands.  If England had allowed completely free trade to the Colonies then likely the Revolution would have been at least delayed.  The taxes paid and the lack of representation in Parliament would have been somewhat assuaged by the profits from that trading enterprise.   A strong argument can be made that our revolution was really based upon the desire for free trade more than for political freedoms.  Those sugar, stamp and tea taxes were used to restrict our trading ability more than to control our political aspirations.

When the Dutch Colony of New Netherland received its first charter it went to New Amsterdam which became New York and it explicitly allowed and encouraged free trade. That early Dutch colony was based upon trade with the local Indian tribes for fur.  Beaver and other pelts were transported back to Holland by the thousands.  The Indians would bring the pelts to Albany or even Manhattan in the earliest days for trade. Most folks forget but tobacco was also a valuable commodity of that early day even in that region.  Even today tobacco is grown in Connecticut.   The Dutch wanted free trade for that area because the recognized that it would encourage growth and commerce for New Amsterdam and produce profits for the Dutch West Indies Company back home.   That policy lead to the growth and vigor of New York for over a generation until the English finally acquired New York in one of the several wars between Great Britain and the Dutch during the 17th century.  Those wars were all about trade and each trying to gain an advantage for themselves.  The British finally took New Amsterdam in 1664 during one fo those wars.  Interestingly, the Dutch actually took over again for a very brief time in 1673 during another of the wars but ceded it back to England as part of the peace treaty bringing that war to a close.

One of the world’s most famous streets is Downing in London.  It is named for an Englishman but one born in the American Colonies and a member of the first graduating class from Harvard in 1642.   He moved to  England and became politically wired in with the new royals after the return of Charles II after the death of Cromwell.  Downing was particularly close to the Prince, James Stuart, the Duke of York and got the appointment as ambassador to the Hague in Holland.  It was his idea along with the Duke that specifically lead to the British expedition that seized New Amsterdam in 1664.  Because of the Duke’s involvement and encouragement in this enterprise the city was renamed in his honor.   Thus we have our modern New York City.  Downing for his efforts at thwarting the Dutch came to have his name placed on the street that became the residence for all the future Prime Ministers of Great Britain.  The last Dutch connection came when William of Orange (or Willem) became the King of England in 1688 after the Glorious Revolution to depose James who had converted to Catholicism and because of that the country rebelled.  William was “invited” to take the throne but he arrived with 20,000 Dutch troops on his march to London.  But he was Protestant and that was critically important at the time.

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Filed under business, Economics, Foreign Affairs, history

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