In a speech in 1848 titled “On the question of free trade,” Karl Marx concluded with this remark (bold emphasis added).
But, in general, the protective system of our day is conservative, while the free trade system is destructive. It breaks up old nationalities and pushes the antagonism of the proletariat and the bourgeoisie to the extreme point. In a word, the free trade system hastens the social revolution. It is in this revolutionary sense alone, gentlemen, that I vote in favor of free trade.
This same observation is often brought up men such as Vox Day regarding free trade versus protectionism.
I do not deny that free trade benefits certain parties, the point is that it also harms other parties whose costs are never factored into the equation. The point that I was making when I referred to the maximum efficiencies provided is that the argument for economic efficiency to which free traders so often appeal – free trade is good for the economy – necessarily and intrinsically includes the free movement of labor and capital. If one is going to appeal to the good of the economy as a whole without considering the costs to various elements of the economy, then it is every bit as reasonable to argue for the free movement of labor combined with restricting the movement of goods as it is to argue the reverse.
Like Marx, Vox argues that free trade undermines nations. The difference is that one of them thinks this is good, the other does not.
So my question is this: Why did a communist like Marx think free trade was a good thing, and were his reasons based on an accurate assessment of the net effect of free trade on a nation?
Before anyone asks, no, this is not me opposing “free trade,” though I would want to qualify what that means exactly.
I think in this discussion it is good to start with that: What do you mean by free trade?
The problem is, libertarians often dwell in the hypothetical. Free trade in which two parties exchanges goods and services without any state involved is both laudable and perfectly libertarian, but wholly removed from reality. Governments exist and regulate these matters. So what is the ideal situation, and are there any countries out there with a trade policy that best reflects free trade as envisioned?
And concerning issues such as NAFTA and the EU, “free trade agreements” are like born-again virgins: self-contradictory terms.
I don’t unilaterally and unconditionally support government policies just because it benefits one group. Like Vox Day, I’m interested in the full picture. It’s also why I don’t unconditionally support tax cuts and deregulation that give one group a financial advantage over their competitors purely due to tax code preferences.
What this also is, is me not being a hypocrite. I’ve taken open border libertarians to task for completely ignoring the fact that their immigration stance is aligned or fits within the agenda of globalists.
Now, it is my turn to adhere to my own standards. The fact that Marx supported free trade deserves investigation, at the very least.
One Marxist site discussing the speech offers this explanation for his position (obviously their words, not mine):
Marx said he voted for free trade as opposed to protectionism because in most cases this would be the quickest path to capitalist development and thereby the revolutionary class struggle to overthrow capitalism. But Marx also pointed to examples of where the bourgeoisie cleared away barriers to its development by utilizing protectionism. So Marxism hardly obligates one to declare for any free trade measure nor any protectionist measure. In fact, the whole issue of whether capitalist development would go faster under this or that policy is always a big issue for the bourgeoisie, but not the proletariat.What the proletariat must always do is maintain its independence from both the free-trade and protectionist wings of capitalism.
In other words, Marx didn’t favor free trade for ideological reasons. As he put it, “in this revolutionary sense alone” did he support it. His stance was more practical or pragmatic in nature. He had an end goal, and free trade achieved that faster than protectionism. The fact that he held a similar policy as genuine free traders was a coincidence, at least in the minds of Marxists.
However, this doesn’t evade the question I have, and I’m sure you do, too: Does free trade actually produce the kind of outcome Marx describes in the closing part of his speech?
I fully admit I don’t have solid rebuttal to offer, but that has more to do with my limited knowledge of economics.
However, it is sad to see the irony that libertarians and marxists hold the same view on trade appears to be lost on many, including one writer at the Foundation for Economic Freedom (FEE).
It is a shame, that even when virtually all intellectuals, from F.A. Hayek and Milton Friedman to Karl Marx and Keynes, have agreed that free trade is the best, there are those who would still defend protectionism.
Surely that should raise questions, since they agreed for entirely different reasons. Marx saw destructive tendencies in free trade, whereas libertarians see prosperity. Marx saw a path toward abolishing capitalism, while libertarians consider it a path to economic freedom.
Like with borders and immigration, pro-open border libertarians and globalists support it for entirely different reasons and envision totally separate outcomes.
Only one side can be right for the right reasons.