FREE TRADE. This term, when used so late as 30 years ago, expressed a disputed proposition, and was the badge of a political party; it now expreves the most important and fundamental truth in political economy. From its simplicity, it affords, to those who expect to make political economy an exact science, the, hope that they have obtained at least one axiom. But it has in reality been established as the result of a double expe rience—the one being the failure of all deviations from it, the other the practical suc cess of the principle during the short period in which it has been permitted to regulate the commerce of this country% Trade consists In buying and selling. There is F. T. where there is no interference with the natural course of buying and selling, if such interference be intended to improve or otherwise to influence trade. It is necessary to keep this distinction in view, because there are many laws not contrary to the spirit of F. T. which interfere with buying and selling; for instance, in this country, it is unlawful to deal in slaves, because we do not acknowledge the right of one human being to be the owner of another; it is unlaw ful to sell intoxicating spirits without having obtained a license, because the tax for the license brings revenue to the exchequer, and intoxicating liquors are a commodity which it is advisable to tax, in preference to the common necessaries of life, or even harmless luxuries. There are many of these last which cannot be sold into this country without paying customs duty, but this is for the purpose of revenue merely, not as a restraint trade.
The many attempts made by governments to regulate trade for the purpose of bene fiting the communities over which they ruled, may be divided into two great classes: the one prohibited the exportation of commodities, the other encouraged exportation, and prohibited or discouraged importation. The former was the old rule in this and in other countries. It was supposed that the wealth of the country depended on its retain ing within itself certain productions of native growth or industry, and their removal out of the country was prohibited or restrained. Until a late period, the exportation of machinery was prohibited; but this was an exceptional remnant of the old principle, which had yielded to its. converse, in which it was maintained that exportation is the source of wealth, and importation is a wasting of a nation's substance. On this theory
the great body of British commercial and financial legislation, which received its death blow in 1846, was founded. By it, a commercial community was then likened to an isolated human being possessed of a certain fund which he must of course spend, so as to become so much the poorer, if he buys commodities, which to him is equivalent to a nation's importing them. The notion was founded on the analogy of the miser, who will, of course, increase his store by restricting his purchases. Communities, however, are not in the position of the miser, possessing separate capital, which he can protect and increase; they rather resemble merchant who buys and sells, making a profit on what passes through his hands. Whatever communities import, they pay for by exports. This can beshown by analysis in any class of national transactions. If we pay for the goods we import by bills of exchange, these bills represent goods exported, otherwise they would not be paid. See EXCIIANGE. if we pay for goods in bullion, it is the same thing; gold does not grow in this country, and every sovereign we send abroad to pay for goods has been got as the price of goods exported, unless it have been brought by any of our own people from the gold districts, and then it is virtually a prod uce of British industry. It is, in fact, a sort of dynamic law that importation causes exportation, just as a vacuum in physics is filled up by air, or the other nearest fluid.
As applied to the individual inhabitants, and not to the nation, F. T. is the right of every man to do as he pleases with his capital and abilities; and as the general desire of mankind is to improve their condition, and, in fact, the greater portion of them are thoroughly devoted to this pursuit, the interests of the nation at large cannot be in better hands than iu those of men who, by increasing their own wealth, are increasing the wealth of the public. The progress made by this country since 1846, has afforded a wonderful experimental illustration of this truth, since the exports have been tripled. They were, in round numbers, 40, and are now 120 millions. For more particular facts and circumstances connected with the establishment of F. T., see ANTI-CORN-LAW LEAGUE, CORN LA.TS, CUSTOMS.