Pax Economica: An Interview with Marc-William Palen

In his new book Pax Economica: Left-Wing Visions of a Free Trade World (Princeton University Press, 2024), historian Marc-William Palen offers a counter-history of free trade as an ideology and policy. In the nineteenth century, before it became a cherished possession of the Right, free trade was proudly claimed as their own by Left-wing activists, intellectuals, and politicians, those who were unswervingly committed to equality for all and peace among nations. Palen recovers this forgotten history of the “Left-wing free traders” of the late-nineteenth century, showing how liberal radicals, socialists, feminists, and Christian pacifists all viewed free trade as the key antidote to the social problems they encountered. Palen also upends the conventional understanding of the world of the late nineteenth and the early-twentieth centuries and argues that the fin-de-siècle was not the “Golden Age’ of the First Globalization, but actually the “Iron Age” of market enclosures and imperial competition. In February 2024, I had a great pleasure to discuss Pax Economica with Palen. Below is an edited version of the conversation.

Seokju Oh (Columbia University)

SEOKJU OH (OH): Congratulations on your new book, and welcome back! In 2018, you sat with us to discuss The ‘Conspiracy’ of Free Trade: The Anglo-American Struggle Over Empire and Economic Globalisation (Cambridge University Press, 2016). Back then, you briefly mentioned your new project, which became this book (Pax Economica). You described it as an attempt to transcend the Anglo-American limit of the first book, “to push even further the global dimensions of economic cosmopolitanism and economic nationalism.” Indeed, Pax Economica is just that, but it also seems to have evolved into something more. Could you explain how you now see the two books relating to each other? How did this project emerge?

MARC-WILLIAM PALEN (PALEN): Well, as it often happens, you start seeing things that fall beyond the current project and start thinking, “maybe if I start pulling the strings, it’s going to lead into interesting directions.” That happened when I was doing the archival research for The ‘Conspiracy’ of Free Trade. I realized that these free trade organizations in Boston, New York City, and elsewhere had a very cosmopolitan list of officers, and as I went through their names, the list was basically a Who’s Who of woman suffragists, socialist revolutionaries, liberal radicals, and Christian pacifists from around the world. I instantly felt there was a fascinating story waiting to be told here. Pax Economica is, in a way, a continuation of The ‘Conspiracy’ of Free Trade that broadens out, as you rightly pointed out, a very much Anglo-American story. Pax Economica also encompasses the German, French, Spanish, Italian, Russian, Japanese, and Ottoman empires, and British colonies like Ireland and India feature more prominently.

Besides transcending Anglo-America, Pax Economica also makes a historiographical intervention, that is, an emphasis on the economic nationalist make-up of the late-nineteenth and early-twentieth centuries, and, to an extent, the post-1945 period as well. I push back against the conventional view (many historians, IR scholars, and economists fall into this trap) that depicts the decades leading up to the First World War as a period of laissez-faire and free markets run amok. This view has also been transposed to how we understand imperial economic policies. One of the historiographical interventions that I feel I have developed in a much more comprehensive way with this book is that I portray the imperial economic order as the anti-imperialists and peace activists of the time saw them. For them, the world of the late-nineteenth and early-twentieth centuries was one of extreme economic nationalism and xenophobia, not free trade and cosmopolitanism. In other words, the fin-de-siècle as a golden age of globalization is a myth.

OH: I would like us to first talk about the historiographical intervention you just mentioned. In the book, you say that it was the American system of protectionism, not the British system of free trade, that was “the norm” in the late-nineteenth century.

PALEN: When the British turned to free trade unilaterally in the 1840s with the repeal of the Corn Laws, they ushered in a near-century of British adherence to free trade as ideology and policy. The assumption underlying the aforementioned myth is that this was a free-market path that rival empires followed:  because the British were the dominant industrial, imperial power, it’s commonly assumed that all other empires took a similar course of adopting free trade policies toward their colonies. It was quite the opposite. From the 1870s onward, one Anglophobic imperial power after another, starting with the US, turned to economic nationalism at home and abroad to counteract the more advanced manufacturing power of Britain, and thereby thwart the perceived free-trade threat emanating from London.

OH: On that point, can you explain the fascinating typology (shown in figure 2) you employ in Pax Economica as well as in The ‘Conspiracy’ of Free Trade?

PALEN: (Laughs) It’s fascinating that you picked up on that. The way you described it too. I actually teach a year-long undergraduate class called “Critics of Empire,” and one of the things the students and I do is basically draw this two-by-two table to make sense of different positions taken by groups and actors across the various empires.

The economic nationalist make-up of the US and other empires struck a stark contrast with British free trade imperialism throughout the late-nineteenth and early-twentieth century. The Opium Wars were obviously one of the most violent instances of British free trade imperialism, but also there were coercive enforcements of free trade on its colonies like India, Ireland, and Egypt. It was within these colonial contexts where free trade was coercively enforced (and they’re quite unusual contexts at this time) that the anti-imperialism of economic nationalism emerged in response. The Swadeshi movement in India and Sinn Féin in Ireland are two such examples that I explore in the book. So, I understand the anti-imperialism of economic nationalism for the most part arising within anti-colonial nationalist movements where free trade was being coercively enforced on unwilling participants of the British Empire.

But the far larger grouping would be what I call the imperialism of economic nationalism; pretty much every rival empire of the British falls into this group.

OH: It’s actually interesting that you explain your typology in that way. So, if I understand it correctly, you are employing “the imperialism of free trade v. the anti-imperialism of economic nationalism” divide to explain the intra-imperial dynamics, say, the relationship between the British metropole and its colonies; and for inter-imperial dynamics, you find it more useful to use “the imperialism of economic nationalism v. the anti-imperialism of free trade” divide.

PALEN: Yes, within the context of the British Empire. I also show that within the context of other empires, say, the United States, there’s anti-imperial agitation for freer trade because the US metropole is enforcing economic nationalist policies against the will of the colonized peoples. I suppose it gets more nuanced when I explain the American System of protectionism. It’s a little bit of both, right? The American System was anti-imperial in the sense that it was trying to thwart the free trade imperial machinations of the British. At the same time, it’s an imperial project. Advocates of the American System like Friedrich List called for imperial expansion alongside protection of infant industries, particularly colonial expansion to secure raw materials and export surplus capital and populations for the industrializing imperial center. So, the imperialism and anti-imperialism of economic nationalism are sometimes acting together.

OH: Thank you for the clarification. I found your typology very useful, because in a sense it allows historians to count more than two. I find it particularly useful also because it builds on an older conception of “free trade,” which would have been familiar to your anti-imperialists and peace activists of the late-nineteenth century. How does this older conception differ from a more contemporary understanding of free trade which we usually connect with neoliberalism?

PALEN: Thank you for bringing that up. I think it’s important to appreciate that free trade historically had deep roots within the political Left, and not just an ideology and policy connected to the political Right.

Nowadays, free trade usually means a very low level of tariffs, or even their absence. This has to do, of course, with the fact that governments today rely on direct taxation, say, the income tax, for much of its revenue. Free trade as we know it is very different from free trade in the nineteenth century. Before the 1900s, governments obtained most of their revenue from indirect taxation, particularly tariffs. In this context, free trade meant tariffs for revenue only. You still had tariffs, but hypothetically they should be as low as possible to maintain the revenue stream the government needed but weren’t there to shield the domestic economy from the full force of global competition. There were also anti-imperialist and pacifist elements to this earlier free trade thinking. The logic went: to build a more peaceful and prosperous world, military expenditures had to be downsized, leading to even lower tariffs and cheaper goods for consumers.

Free trade as we know it is very different from free trade in the nineteenth century.

Why is it important to note that the meaning and practice of free trade changed over time? Well, I see free trade as we know it, which contemporary critiques from the Left have focused on, being a product of what we may call the “neoliberal reformation” after the fall of Bretton Woods. Think of the right-wing, free-market economists like Friedrich Hayek and Milton Friedman, who had direct connections to the Reagan administration and Thatcher’s cabinet and who had an ever-increasing scepticism towards democracy. For them, there was little, if any, room within free trade for labor protections, environmental regulations, and the broader concern with inequality and exploitation. Pax Economica tells a different story that doesn’t begin in the 1920s, 30s, or 40s -- when the “neoliberal” intellectuals burst onto the scene -- but in the nineteenth century when free trade was capacious enough to hold a multitude of progressive and reformist ideals that transcended deregulation and protecting private property.

OH: This is a great moment to segue into the contents of the book. The core four chapters of the book introduce four different groups of “left-wing” free traders; liberal radicals, socialist internationalists, feminists, and Christian pacifists. Who were they?

PALEN: To start off with the liberal radicals: they are the ones, I think, most people would probably think of when they think of left-of-center free trade-and-peace activism. One of the main characters here is Richard Cobden, who was the middle-class leader of the Anti-Corn Law League in Britain. The Cobdenites played a prominent role in overturning the Corn Laws in 1846 and ushering in a near-century long British policy of free trade. This is a more familiar story. What I show in the chapter is how Cobden and his transatlantic disciples next threw themselves into other reform movements of the mid-nineteenth century, such as abolitionism, anti-imperialism, peace work, democracy promotion, and (first wave) feminism.

To understand why socialists, feminists, and Christian pacifists embraced free trade, I think it’s useful to first understand why Cobden and his fellow liberal radicals advocated for free trade. It wasn’t just about freeing trade for the sake of freeing trade. Rather, it was a means to solve social problems Cobden and his liberal radical allies witnessed around them. If you think of industrial Britain of the mid-nineteenth century, massive urbanization was coupled with poverty. The working classes were having trouble getting the food on the table. The liberal radicals argued that if only Britain could remove the protective tariff on cheap foreign grain there would be enough bread loaves for everyone. Connected to this argument was that it would also be the aristocratic protectionist land owners of Britain who would be adversely impacted by this policy of free trade. This, in turn, would weaken aristocratic landowners' militant influence over British foreign policy making. So, with free trade, a direct connection was made between cheap food, peace, and democratization.

This view of free trade was picked up by the socialist internationalists, feminists, and Christian pacifists. I start chapter 3 (“Marx and Manchester”) with Marx and Engels, who were living in England during the high point of Cobden’s free trade agitation. It was more than coincidental that Marx gave a speech that socialists of the world must be free traders just after the overturning of the Corn Laws. The rationale was of course different for Marx. He was sceptical about the peace dividend to be gained from free trade, but he made it very clear that free trade was the next progressive step forward in capitalist development. Economic nationalism and mercantilist empires were retrograde; free trade was expected to speed up the process and get us that much closer to socialist revolution. In the other chapters, 4 (“Free-Trade Feminism”) and 5 (“Free-Trade, Fraternity, and Federation”), I show how economic cosmopolitanism was central to the thinking of feminists and Christian pacifists. By the First World War, the liberal radicals, socialist internationalists, feminists, and pacifists were all working together for a shared “left-wing” vision of free trade, a left-wing coalition that might surprise many readers.

OH: It’s very clarifying that you point out free trade was, for the “left-wing” free traders, a means to an end, a means to rectify what they viewed as anachronistic. In the British case, as you just mentioned, this was the imperial state dominated by the militaristic, landed aristocracy. So, are you saying that the “left-wing” free traders were critics of “gentlemanly capitalism” avant-la-lettre? What did the critique look like in empires other than the British Empire?

PALEN: Cain and Hopkins, who coined the term, “gentlemanly capitalism,” were also drawing upon Hobson and Lenin. In my third chapter, there is a section where I show how, by the turn of the twentieth century, Marx’s view of free trade had evolved into Marxist theories of imperialism. Theorists like Kautsky, Bernstein, Hilferding, and Lenin flipped on its head Marx’s original view of free trade as a progressive next step. These Marxist theorists of imperialism looked back at what had happened in the late-nineteenth and early-twentieth centuries and concluded that the imperialism of economic nationalism had been the natural progression of capitalist development. So, yes, my reading of the “left-wing” free traders is connected to the Cain-Hopkins thesis. I would say, though, the book engages more closely with Peter Cain’s work on Cobden and Hobson (he wrote an excellent biography of Hobson), and Hopkins’s work on the American Empire.

How did this play out in other empires? Imperial Germany is perhaps an interesting analogy to what was the case in Britain before the repeal of the Corn Laws. Left-wing German peace activists and free traders similarly tried to undermine the influence of the German landed aristocracy, the Junkers. So, there’s an interesting parallel here. Of course, the German free traders encountered way more right-wing economic nationalist obstacles that tie into the intellectual tradition that I talked about earlier: the German continuation and transplantation of the “American System.”

Also, I want to point out that the control of land by elites continued to be a big deal in the colonies as well as the imperial metropoles. Australia, New Zealand, and India within the British Empire, for example. Even there was a transfer of power from land to finance in Britain, beyond Britain, control of land remained the key issue.

OH: Speaking of land, readers of your book are bound to be pleasantly surprised to find Henry George (1839-1897) occupying a prominent place among “left-wing” free traders! There seems to be a Georgist revival today. Can you tell us briefly about the link between the “left-wing” free traders and Georgism?

PALEN: Absolutely. Great question. That was one of the many things that surprised me while doing research. I did not expect to find Henry George and “Georgism” to be as prominent as it turned out to be. And this is indeed a pleasant surprise, especially when, as you said, there is a growing interest in Georgism today. There is even a movement to implement Georgist policies in Detroit as a way to revive the city center by curtailing land speculation.

Briefly, George was a US journalist political philosopher whose 1879 book, Progress and Poverty, was a massive international bestseller. (People today have forgotten how influential he was!) George was also a devout American Cobdenite. In Progress and Poverty, he built upon the Cobdenite critique of landed aristocracy, calling for the “single tax,” as it was known in America, or “land value tax” as it was better known as outside the USA. The idea was quite simple: if we just tax land based on its estimated value, it would stimulate owners to develop the land to its highest potential – housing, farms, industries - rather than let it go waste. Also, it would become the one tax -- hence, the name “single tax” -- that can provide all the revenue that the government requires.

It was actually a very extreme Cobdenism. George was arguing that this form of direct taxation, taxation on land, would make any form of indirect taxation, including the tariff, unnecessary. Forget tariffs for revenue only. With the single tax, went the argument, you can get rid of tariffs entirely. A new generation of Cobdenites became energized with this radical free trade reforms of Georgism. It was a more absolutist version of the Cobdenite creed that gained left-wing followers in Latin America and Asia as well as Euro-America.

OH: Pax Economica is an intellectual history, a book that examines the ideas about the international political economy and the social movements that harboured these ideas. We see less of the material aspect of the international political economy (the commodities that circulate the world, the carriers that transport them, etc.), which has been at the centre of recent studies. How do you see your book relating to this adjacent literature?

PALEN: Global commodities like grain and cotton are mentioned throughout Pax Economica. You’re right, however, to point out that my focus is more on ideas, with the production, exchange, and consumption of the commodities lurking in the background.

I do think, however, my book speaks to this literature in at least one big way. Going back to the anti-imperialism of free trade, the free trade-and-peace activists believed that the main impetus behind colonialism was the economic nationalist search for markets and access to raw materials [global commodities]. These colonial markets were exclusively closed off for the sole exploitation of the manufacturing imperial metropole. Later, following two global wars, the “left-wing” free traders I look at started believing that the world needed institutions at the supernational level to not necessarily eliminate nation-states, but curb their fixation on self-sufficiency coupled with colonialism. This would help make world trade more peaceful, prosperous, and equitable. So, Pax Economica is in part a book about how left-wing free traders of the past worked to shape supranational institutions to regulate the global commodities trade so as to eliminate the main economic impetus behind colonialism and economic exploitation.

OH: The last chapter of the book is a sweeping summary of the twentieth century, with the title, “Pax Economicavs. Pax Americana.” Could you clarify for us the significance of this juxtaposition?

PALEN: My four core chapters on the liberal radicals, socialist internationalists, feminists, and Christian pacifists all end on a high note. Immediately after the Second World War, and after a near-century of free-trade-and-peace agitation, the left-wing globalists found themselves in a moment when things seemed to be moving in a multilateral direction they had long been working towards. That was because the United States, the birthplace of the nineteenth-century American System of protectionism, finally started to embrace freer trade. FDR’s secretary of state, Cordell Hull, pushed hard for the liberalization of US trade; he overturned, especially with his Good Neighbour policy, what had been a Republican-dominated, imperialistic, interventionist foreign policy; and played a prominent role in the creation of the United Nations. The “left-wing” free traders had a clear understanding of their moment and rallied behind Hull’s program. Fittingly, Hull was nicknamed the “Tennessee Cobden.”

The immediate postwar years were a promising period for the left-wing globalists, but their optimism turned to pessimism with the advent of the Cold War. The imperialism of economic nationalism returned quickly -- in the form of neocolonialism and neomercantilism -- as the world was divided and hypermilitarized. The so-called Pax Americana during the Cold War was increasingly characterized by US unilateralism and military interventionism as well as fears of left-wing democratic movements. It reflected a retreat from the more peaceful multilateralism originally envisioned by Hull and his left-wing globalist allies: their Pax Economica of free trade, non-interventionism, demilitarization, and democratization.

OH: History failed to turn in the late-1940s.

PALEN: Yes. But the anti-imperialism of free trade remained, and not just among my left-wing free traders. This also included the Global South’s effort to rewrite the rules of trade against Western neocolonialism. Until recently, much of the literature on the UN Conference on Trade and Development (UNCTAD) and the New International Economic Order (NIEO) see these efforts mainly as the anti-imperialism of economic nationalism. That is true to a certain extent. However, as I explain in the last chapter, we see how, far more often, Global South leaders were not criticizing the free trade policies of the Global North. Rather, they were criticizing the Global North of hypocritically imposing free trade on the Global South while practicing protectionism at home. They were demanding that the Global North practiced what it preached, and open its markets to Global South products. (The embargo against Cuba becomes emblematic of the Cold War’s imperialism of economic nationalism.) In this wider sense, I see UNCTAD and the NIEO as a continuation of the anti-imperialism of free trade.

OH: I have a closing question for you. It’s quite rare for authors to consecutively publish two books that speaks to their times; your first book appeared in the aftermath of Brexit and Trump; this book in the age of industrial policy and international competition. What kind of timely book are you writing next?

PALEN: When I started writing them, I definitely didn’t expect that the lessons in them would become as portentous or applicable as they turned out to be. Here we are, in 2024, continuing to witness a retreat from globalism and the emergence of a new economic nationalist order, with the USA leading the way. I wrote an article couple years back for Diplomatic History, in which I looked back at the potential connections between the influenza pandemic of 1918 and the US turn to more stringent economic policies after the First World War as a case study. So, my next book might be on how pandemics have shaped global economic ordering and disordering. Here’s to hoping it’s a bit less timely.

OH: We look forward to it! Thank you again for the conversation.