Through a global system of commerce many nations have been enriched, and life has become better for many peoples. The developed world has had the greatest advantage because European history bequeathed to certain countries the legacy of Greece and Rome, and what sociologist Max Weber called “the Protestant ethic.” From Great Britain in particular, there grew up a philosophy of freedom and morality which led to an economic flowering. The advantages of freedom should be obvious to everyone, but there are leaders in the world today who would like to say that the commercial system is immoral, as the President of Iran suggested in a recent speech. President Mahmoud Ahmadinejad spoke of the West’s responsibility for the global recession and social inequalities. All those who dislike freedom tend to characterize commercial activity as immoral. They blame the poverty of mankind on the very system that has uplifted mankind from poverty. When there is recession they say capitalism has failed.
Adam Smith was famous for his Wealth of Nations, yet he was a moral philosopher who concerned himself with the question of a better society. He suggested that a wealthier society would be less warlike. It would be more humane. This established itself firmly, and was eloquently advanced by the British historian, Thomas Macaulay. In his History of England, Macaulay commented on the cruelty of human beings who suffer under poverty. When England was poor, he explained, the favored entertainments included hangings and beatings. As England grew in wealth, people no longer enjoyed the suffering of others. That is to say, comfortable people are more humane. Adam Smith’s notion that an Epicurean state was more humane has been proven by the history of the last 235 years.
Commercial civilization is not a zero sum game. The freedom to buy and sell adds to the general welfare. The countryside advances and grows richer through commerce, and the town accelerates this growth and all of society profits. In a commercial society the gains of one section do not impoverish the others. As President Kennedy once said, “A rising tide lifts all boats.” Such has been the tide of our commercial civilization, which now suffers global recession and is blamed and maligned. The commercial power has uplifted a portion of mankind from disease and want, yet some would openly resist this power and deny its advantages for all mankind.
The success of commercial civilization depends on the maintenance of peace and order, together with the freedom to buy and sell. “When the German and Scythian nations over-ran the western provinces of the Roman empire,” wrote Smith, “the confusions which followed … lasted for several centuries. The rapine and violence [of the barbarians] interrupted the commerce between towns and the country. The towns were deserted, and the country was left uncultivated, and the western provinces of Europe, which had enjoyed a considerable degree of opulence under the Roman empire, sunk into the lowest state of poverty and barbarism.”
It has been argued by historian Bryan Ward-Perkins that the barbarian invasions brought a generalized economic collapse. As Adam Smith noted above, that collapse “lasted for several centuries.” In our time, such a disaster could only be comparable to a nuclear war. Modern society is so well organized and efficient, that even the massive destruction that characterized the Second World War was not sufficient to bring about such a collapse. And yet, if we abandon the idea of economic freedom, collapse will come without war. It will come because we cannot maintain an advanced civilization without freedom. We cannot keep several billion human beings fed without the persistence of the “developed world,” which is also known as the “free world.”
There is no coincidence in the association between the word “developed” and the word “free.” Sometimes we hear politicians talking about freedom. Sometimes they suggest limits on economic freedom. They suppose that the state must regulate commerce, and intervene in the economy, in order to uphold the dignity of the poor – in order to guarantee social justice. We must be wary of such words, because the limitation of commerce in the name of justice tends to block economic progress. Wealth is not created but lost in futile egalitarian efforts. Opportunity is thereby limited, and growth is halted. Today the government intervenes to lessen the impact of a recession and the recession is extended. The recession becomes permanent.
The state helps by establishing a peaceful and ordered playing field for commerce. The state does not help when it hampers commerce and redistributes wealth.
