Trade and the Rise of Freedom, by Thomas DiLorenzo

The freedom to trade with whomever one chooses is as fundamental a right as self-defense or freedom of expression. From Thomas DiLorenzo at

[This speech was delivered at the Mises Institute’s conference on “The History of Liberty.”]

It is not an exaggeration to say that trade is the keystone of modern civilization. For as Murray Rothbard wrote: “The market economy is one vast latticework throughout the world, in which each individual, each region, each country, produces what he or it is best at, most relatively efficient in, and exchanges that product for the goods and services of others. Without the division of labor and the trade based upon that division, the entire world would starve. Coerced restraints on trade — such as protectionism — cripple, hobble, and destroy trade, the source of life and prosperity.”1

Human beings cannot truly be free unless there is a high degree of economic freedom — the freedom to collaborate and coordinate plans with other people from literally all around the world. That is the point of Leonard Read’s famous article, “I Pencil,” which describes how to produce an item as mundane as an ordinary pencil requires the cooperation and collaboration of thousands of people from all around the world, all of whom possess very specific knowledge (of “time and place,” as Mises called it) that allows them to assist in the production and marketing of pencils. The same is true, of course, for virtually everything else that is produced.

Without economic freedom — the freedom to earn a living for oneself and one’s family — people are destined to become mere wards of the state. Thus, every attempt by the state to interfere with trade is an attempt to deny us our freedom, to impoverish us, and to turn us into modern-day serfs.

Mises believed that trade or exchange is “the fundamental social relation” which “weaves the bond which unites men into society.”2 Man “serves in order to be served” in any trade relationship in the free market.3 Mises also distinguished between two types of social cooperation: cooperation by virtue of private contract and coordination, and cooperation by virtue of command and subordination or “hegemony.”4 The former type of coordination is symmetrical and mutually advantageous, whereas the latter is asymmetrical — there is a commander and a commandee, and the commandees are mere pawns in the actions of the commanders. When people become the mere pawns of their rulers they cannot be said to be free. This, of course, is the kind of “cooperation” that exists at the hands of the state.

To continue reading: Trade and the Rise of Freedom


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