Recovering the Socialist Free-Trade Tradition

Figure 1: Front and back of the cover of the Jan. 1919 issue of the US Communist magazine the Liberator.

Marc-William Palen
History Department, University of Exeter
Follow on Twitter @MWPalen

[The following has been adapted from Marc-William Palen, “Marx and Manchester: The Evolution of the Socialist Internationalist Free-Trade Tradition, c1846-1946,” International History Review 43 (March 2021): 381-398.]

Free trade, or Freihandel, was a hot-button issue at the German Social Democratic Party (SPD) Congress held in Stuttgart in 1898, most notably because of the policy’s numerous advocates. SPD leader Karl Kautsky kicked things off with a resolution denouncing protectionism for counteracting ‘international solidarity.’ Luise Zietz, a German feminist and head of the SPD women’s movement, seconded Kautsky’s call: ‘We have to adopt a principled stance, and that is in favor of free trade and against protective tariffs.’ August Bebel, SPD chairman and longtime pacifist, followed up on Kautsky and Zietz’s free-trade endorsements, and the congress adopted a qualified resolution along these lines. Free trade would receive an even stronger SPD endorsement in 1900 because ‘free international exchange is . . . before all, a working-class question,’ German Marxist revisionist Eduard Bernstein explained in a subsequent letter to London’s 1908 International Free Trade Congress.[1] Their efforts were part of a rich socialist free-trade tradition that began germinating when Friedrich Engels and Karl Marx migrated to Britain in the 1840s, just as the island-nation was embracing free trade as both policy and ideology. The same British free-trade embrace was also giving rise at this time to the Manchester School (Manchester liberalism, Cobdenism), an economic ideology that tied international trade liberalization together with cheap food, democratization, anti-imperialism, and peace – a cosmopolitan concoction that socialist internationalists increasingly imbibed by the turn of the century.[2]

Recovering the free-trade dimensions of socialist internationalism, and the pacific influence of Britain’s Manchester School upon it, upends the commonly held assumption that socialists the world over have supported nationalism and protectionism amid their collectivist opposition to free-market capitalism.[3] Doing so also provides a much-needed prehistory to the growing body of literature on ‘socialist globalization’. This scholarship has focused primarily on socialist attempts to deepen regional and global interdependence through market integration and supranational governance amid the Manichean ideological divide of the Cold War.[4]  By contrast, earlier attempts have received far less attention, and the role of free trade within the socialist internationalist tradition less still. As a partial corrective, this article traces the evolution of socialist internationalist support for free trade across the century before the Cold War, wherein the cosmopolitan subscription to free trade increasingly made strange bedfellows among those capitalists and socialists seeking a more interdependent and peaceful world order.

The global turn to economic nationalism from the late nineteenth century to the Second World War played a crucial role in aligning the ideological schools of Marx and Manchester. By the 1860s and 1870s, many industrializing capitalist states – most prominent among them the United States and Germany — embraced policies of ‘infant industrial’ protectionism and went in search of new colonial markets among the underdeveloped regions of Africa, Latin America, and the Asia Pacific.[5] The close connection between these protectionist and imperial developments helped spark the growth of socialist theories of imperialism and socialist free-trade-and-peace activism.[6] After the First World War, an even stronger global swing towards economic nationalism and imperial retrenchment encouraged the widespread socialist internationalist backing of capitalist supranational initiatives like the League of Nations and European union in the hopes of facilitating free trade, decolonization, and world peace.[7]

Until now, socialist internationalist sympathy for free trade and its close association with anti-imperialism and peace in the century before the Cold War has yet to be collectively examined. Doing so uncovers how this socialist internationalist free-trade tradition evolved alongside and drew inspiration from the Manchester School of economic liberalism. Of course, as with any intellectual tradition, socialist internationalist support for free trade was not static. Turn-of-the-century Marxist theorists of imperialism began reformulating Karl Marx and Friedrich Engels’s mid-nineteenth-century free-trade endorsement. Socialist internationalists during and after the First World War increasingly advocated for free trade as a necessary precondition for a more peaceful world order — an ideological marriage that the Manchester School had so famously wedded together in the 1840s.

[1] Protokoll über die Verhandlungen des Parteitages der Sozialdemokratischen Partei Deutschlands, Stuttgart (Berlin, 1898), 68, 200; Carlton J. H. Hayes, ‘The History of German Socialism Reconsidered’, American Historical Review 23 (1917), 93-94; Cornelius Torp, The Challenges of Globalization: Economy and Politics in Germany, 1860-1914 (New York, 2014), 248; Report of the Proceedings of the International Free Trade Congress, London, August, 1908 (London, 1908), 28.

[2] On the long-term role of Manchester School ideology within Britain and its empire, see especially William Dyer Grampp, The Manchester School of Economics (Stanford, 1960); Anthony Howe, Free Trade and Liberal England, 1846-1946 (Oxford, 1997); Frank Trentmann, Free Trade Nation: Commerce, Consumption, and Civil Society in Modern Britain (Oxford, 2008).

[3] See, for example, Friedrich Hayek, Individualism and Economic Order (Chicago, 1948), 270-71; Michael A. Heilperin, Studies in Economic Nationalism (Paris, 1960), 43.

[4] See, for instance, Humanity’s Spring 2015 special issue ‘Toward a History of the New International Economic Order’; Oscar Sanchez-Sibony, Red Globalization: The Political Economy of the Soviet Cold War from Stalin to Khrushchev (Cambridge, 2014); Johanna Bockman, Markets in the Name of Socialism: The Left-Wing Origins of Neoliberalism (Stanford, 2011); James Mark, Bogdan Iacob, Tobias Rupprecht, and Ljubica Spaskovska, 1989: A Global History of Eastern Europe (Cambridge, 2019).

[5] See, et al., Ha-Joon Chang, Kicking Away the Ladder: Development Strategy in Historical Perspective (London, 2002); Henryk Szlajfer, Economic Nationalism and Globalization, trans. by Maria Chmielewska-Szlajfer (Leiden, 2012).

[6] Bert F. Hoselitz, ‘Socialism, Communism, and International Trade’, Journal of Political Economy 57 (1949), 227-241; Michael Howard and John Edward King, A History of Marxian Economics, Volume I, 1883-1929 (Princeton, 1989), 90-92; Pranab Bardhan, ‘Marxist Ideas in Development Economics: A Brief Evaluation’, Economic and Political Weekly 20 (30 March 1985), 550; Claudio Katz (trans. by Carlos Perez), ‘The Manifesto and Globalization’, Latin American Perspectives 28 (2001), 7-8; Bill Dunn, Neither Free Trade Nor Protection: A Critical Political Economy of Trade Theory and Practice (Cheltenham, 2015), chap. 5.

[7] This line of thought bore more than a few similarities to that of their interwar ‘neoliberal’ contemporaries. See, for instance, Ben Jackson, ‘At the Origins of Neo-Liberalism: The Free Economy and the Strong State, 1930-1947’, Historical Journal 53 (March 2010): 129-151; Quinn Slobodian, Globalists: The End of Empire and the Birth of Neoliberalism (Cambridge, MA, 2018).

[The following has been adapted from Marc-William Palen, “Marx and Manchester: The Evolution of the Socialist Internationalist Free-Trade Tradition, c1846-1946,” International History Review 43 (March 2021): 381-398.]