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The Rise of Free Trade in Western Europe

Introduction

Charles P.Kindleberger, a leading economic historian, examines the process by which mercantilist trade restrictions were dismantled and evaluates several of the best-known theses concerning the ascendance of free trade in Western Europe. Presenting a domestic society-centered argument, Kindleberger contends that free trade in many instances arose as individual entrepreneurs pressured their governments to lift restrictions on international trade and finance so that they could pursue overseas business opportunities.

Yet Kindleberger points out that political activity by entrepreneurs cannot explain the rapid expansion of free trade in Europe after 1850. He suggests that this “second wave” of free trade may have been motivated by ideology rather than by economic or political interests. This important article offers a persuasive explanation of how and why the market principle gained dominance within the international economy during the nineteenth century.

Commissions of inquiry in 1828 and 1834 recommended modifications in duties, especially to enlarge supplies that local industry was not in a position to provide, and to convert prohibitions into tariffs. A tumult of conflict broke out in the Chamber among the export interests of the ports, the textile interests of Alsace and Normandy, the maîtres de forges, and the consumers of iron, with no regard, says the protectionist Gouraud, for the national interest. The Chambers were then dissolved by the cabinet, and tariffs adjusted downward, in coal, iron, copper, nitrates, machinery, horses. Reductions of the 1830s were followed in the peaks of business by similar pressure for reductions in prosperous phases of the cycle of the 1840s and 1850s.

A troubling question that involved conflicting interests in this period was presented by sugar, for which it was impossible to find a solution agreeable at the same time to colonial planters, shipowners, port refiners, consumers and the treasury. Colonial supply was high cost and a 55 francs per 100 kilograms duty on foreign supplies was needed to keep the sugar ports content.

This, however, made it economical to expand beet-sugar production, begun during the Continental blockade, and the sugar ports turned to tax this domestic production, less heavily at first, but with full equality in 1843. By this time it was too late, and with the freeing of the slaves in 1848, French colonial sugar production no longer counted

The free-trade movement in France had its support in Bordeaux, the wine exporting region; Lyon, interested in silk; and Paris, producer of so-called Paris articles for sale abroad (cabinet ware, perfumes, imitation jewelry, toys, and so on). Later Norman agricultural interests in the export of butter and eggs to London teamed up with Bordeaux in wine to resist the attempts by textile interests to enlist agriculture in favor of higher tariffs.

Last word

Intellectual support to free trade led by Bastiat from Bordeaux, and with Michel Chevalier as its most prestigious member, is dismissed by Lévy-Leboyer as unimportant. Nonetheless, Chevalier had an important part in the negotiation of the treaty, and in persuading Napoleon III to impose it on France in the face of the united opposition of the Chamber of Deputies. Some attention to his thought is required.

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