Given the anti free trade sentiment at the moment, we thought this would be worth reprinting.
“… I have never taken a limited view of the object or scope of this great principle. I have never advocated this question very much as a trader.
But I have been accused of looking too much to material interests. Nevertheless I can say that I have taken as large and great a view of the effects of this mighty principle as ever did any man who dreamt over it in his own study. I believe that the physical gain will be the smallest gain to humanity from the success of this principle. I look farther; I see in the Free-trade principle that which shall act on the moral world as the principle of gravitation in the universe,—drawing men together, thrusting aside the antagonism of race, and creed, and language, and uniting us in the bonds of eternal peace. I have looked even farther. I have speculated, and probably dreamt, in the dim future—ay, a thousand years hence—I have speculated on what the effect of the triumph of this principle may be.
I believe that the effect will be to change the face of the world, so as to introduce a system of government entirely distinct from that which now prevails. I believe that the desire and the motive for large and mighty empires; for gigantic armies and great navies—for those materials which are used for the destruction of life and the desolation of the rewards of labour—will die away; I believe that such things will cease to be necessary, or to be used, when man becomes one family, and freely exchanges the fruits of his labour with his brother man. I believe that, if we could be allowed to reappear on this sublunary scene, we should see, at a far distant period, the governing system of this world revert to something like the municipal system; and I believe that the speculative philosopher of a thousand years hence will date the greatest revolution that ever happened in the world’s history from the triumph of the principle which we have met here to advocate.”
It is certain that ‘free trade’ has brought prosperity to many different countries. High exchange rate economies diversify into investing in lower exchange rate economies bringing both rewards. However, Richard Cobden’s statement about free trade was made when Britain was the world’s foremost exporter. After 1870 Britain suffered from adopting an unfavourable exchange rate versus the German Mark when both countries were on the Gold Standard, adversely affecting Britain’s economy.
Countries are no longer on the Gold Standard but on sliding exchange rates. Large exporters try to keep their exchange rates low by maintaining low interest rates, but America needs high interest rates to maintain the value of the Dollar so a measure of protection to preserve its vital industries is understandable.