SMITH-RICARDIAN ‘FREE TRADE’ JUSTIFIED SLAVE TRADE

Bro. Erle Frayne Argonza

To continue on the theme of laissez faire, a doctrine started by the French physiocrats and systematized further by the Scots, let it be known that the principle of ‘free trade’ generated by physiocracy was largely a doctrinal defense of slave trade. [Physiocrats were philosophers who focused on economic problems, while philosophes who focused on political, ethical, and epistemological problems.]

I already elaborated in a previous briefer that Adam Smith was an ‘intellectual prostitute’ whose services were procured by the British East India Company, precisely for the purpose of crafting in theoretical form the ‘free trade’ doctrine that was to justify, though subtly, the slave trade of that historic juncture. I gained the information about this rather shady background of Smith from a fellow political economist, Butch Valdez, a Fellow in the defunct Independent Review circle of 1990s Manila.

The physiocrats were already quite sophisticated in their modeling of economic reality then existing, and from out of that physiocratic subculture emerged Adam Smith whose synthesis of the existing doctrines of his time produced the Wealth of Nations. In the same book and related philosophical writings, Smith discoursed both on micro and macroeconomics, explaining in physiocratic terms the source of national income (termed ‘wealth’ at that time) from out of domestic engagements by landlords, capitalists and laborers, as well as international operations notably those accruing from overseas colonies’ operations.

It was from the latter that David Ricardo, disciple of Smith, took off to articulate the principle of ‘comparative advantage’. In the writings of Ricardo, the discipline of political economy moved much closer to empirical science, a feat that I myself had come to admire. David Ricardo was hardly any ‘intellectual prostitute’ to reckon with, but rather was he a financier who engaged in the evolving bourse and speculative pursuits of his own time. But slave trade was very much alive during his time, and there could be no doubt on his part that his theory of international trade served in no small measure to justify the conduct of slave trade.
In my youth yet did I come to learn, from the likes of Alejandro ‘Ding’ Lichauco, a Harvard-schooled economist and corporate executive, that free trade couldn’t be enforced without imperialism. It was a perfect income-generating strategy for Britain particularly since this world power had an entire empire to manage. Absent that Empire, and free trade will collapse. (Ding Lichauco was later a leading Fellow of the Independent Review in the 1990s.)

However, it was only much later that I was able to connect free trade directly to slave trade practices, thanks to my Fellows in the Independent Review, notably Butch Valdez. Slave traders were legion around the years 1700-1850, or up to the decade preceding the US Civil War and China’s Taiping Rebellion, and at one time British traders alone owned over 20,000 ships plying the oceans to market African slaves. Within America, Portugal and Spain both engaged in the same trade, though including Indians aside from Blacks, often with the blessings of the Vatican. It was huge bucks, this slave trade, more so that the bourses began to factor slave availability and chattel quality in the valuation of certain cash crops, which then factored in the valuation of main stock trading articles and nascent insurance forms.
The very same slave traders had in their employ not only those early stock traders in London and elsewhere, but also lobby groups and journalists whose tasks included bribing legislators and bureaucrats to keep them blind about the noxious trading of human chattel. There was no way that slave trade could survive in a policy environment of high regulation, more so in a context of ‘activist state’ intervening so heavily in investment areas (dirigist development).

It was only in a state with least regulations did slave trade flourish, the only regulations it seems coming from God Almighty (who would punish the traders for their sins post mortem). But even God Almighty had a long-drawn policy of non-interventionism in the physical plane, a laissez faire attitude that favored the physiocrats and their notorious slave trader sponsors. As far as Earth was concerned, it was the oligarchs who are gods till now, and so they define which doctrine to advance at every turn of epochs, historic periods and cyclical episodes.

Since the slave traders then had to reckon with powerful mercantilist doctrinaires such as Colbert, whose writings influenced France’s intellectual and governance circles and US’ policy makers notably A. Hamilton, there was no way that slave trade would fail to catch the eyes of politicians and libertarian groups, and before long the same trading ‘best practices’ would be criminalized as malpractices. The same mercantilist policy makers, who were dirigists and regulationists, swarmed the Kings’ courts everywhere, who didn’t mince words in attacking slave trade and slandering the traders before the nobles and mediocre bureaucrats (who always needed some godfather thinkers as mentor-guides for their actions).

That was why physiocracy failed to gain foothold in its own home ground of France, and had to be exported to the neighboring British Isle where it obtained further fertilization. Finally, upon the further expansion of the British Empire, physiocracy caught the eyes of the nobles, politicians and bureaucrats. At that moment of convergence of interests for laissez faire, Smith was already ripe for the picking, via the British East India Company, whose satisfactory work was vigorously propagandized by the coteries of doctrinal converts.

Smith gained not only fame but also great following, and among his followers emerged David Ricardo and Thomas Malthus. The works of Smith and his contemporaries, five to seven decades later, inspired another coterie of philosophers, the Classical Evolutionists (Darwin, Spencer, Morgan, Tylor, Frazer, etc), whose theories of ‘natural selection’ (Darwin’s) and/or ‘survival of the fittest’ (Spencer’s) were defended via the physiocratic principles of scarcity and competition.
With a fairly equal number of free market-free trade theorists at hand, promoted in public and private circles by an emerging financier class that was awash with money and enjoyed wide social networks among the elites, free trade came to challenge and demolish mercantilist doctrines in shock waves of mighty discourses. Needless to say, for a certain period, the slave traders celebrated to the highest heavens their shallow victory for seeing their candidate doctrine ascend the intellectual pinnacle, their intoxication behooving them into believing perhaps that they were Gods of Olympus, a deluded image inherited by their financier pedigrees of today.

That was then. Till slavery in its old form eroded. Free trade declined at the inception of the 20th century, but was later revived by the Chicago school and its adherents. Are we then ready to slide back into another round of slavery? What would be the forms of slavery this time, if the old form refuses justification and public acceptance? Isn’t the trading of human labor overseas a mere disguise for slave labor? Isn’t the privatization of jails—currently being experimented in the USA—an undisguised slavery as the prisoners will be considered chattel of Big Business, the same corporate groups that fund the purses of ‘corporate social responsibility’?

I’d end this piece right here. A pleasant day to everyone.

[21 August 2008, Quezon City, MetroManila.]