For a Virtuous Free Trade: Edmund Burke’s Economic Vision

The following excellent piece is by Kai Weiss, a Research Fellow at the Austrian Economics Center.

Download the Study For a Virtuous Free Trade Here

Summary

Edmund Burke is considered the father of conservatism. Yet, little attention has been paid to the economic views of the 18th century Anglo-Irish thinker and statesman. Taking a look at his views on trade and the role of the government in the economy is illuminating for today’s discussions on what conservatives should think on these topics – discussions which have been spurred by the ascendancy of Donald Trump on a protectionist economic agenda. Analyzing Burke’s works and his career in the House of Commons shows that he would have thought little of these protectionist and interventionist policies that are becoming ever more prevalent in both the Republican Party as well as the conservative movement. A good friend of Adam Smith, Burke tried over several decades to enable free trade and saw minimal space for the government to become active. His reasoning for his advocacy of free markets was not based on utilitarian grounds. Rather, his defense of economic liberty was based on a natural rights approach – meaning that every human being had a natural right given by God to own property and trade freely – coupled with a precursory version of the idea of a spontaneous order. The social order would come into being bottom-up, undeterred from the government. The market with its institutions and mechanisms would be a major part in bringing about this functioning order, which would enable a virtuous citizenry. While an overly active government promotes conflict and polarization, the market enables peace among the people. This Burkean case for economic freedom, which goes beyond mere materialism, is one many conservatives need to be aware of once more today.

Introduction

The election of Donald Trump as President of the United States in 2016 has brought much upheaval to both the Republican Party as well as the conservative movement at large. The liberal consensus which was in place since the fall of the Soviet Union in 1989 – based for conservatives on free trade, deregulation, low taxes as well as a support of multilateral cooperation on the global level and an interventionist foreign policy – was replaced within months by a new philosophy based on almost the exact opposite.

A majority of Republican voters today are in favor of Donald Trump’s trade policy which relies on tariffs and other trade barriers and has its basis in protecting domestic businesses and workers from international competition (Watson, 2018). It is not only voters who have changed their views on trade: conservative scholars have been envisioning a more protectionist U.S., too (McCarthy, 2019). On the domestic economy, conservatives have demanded more interventionist policies by the government, some going so far as to embrace the ideas of Bernie Sanders, the openly-socialist 2020 Presidential candidate from the Democrats (Del Mastro, 2019). Gregg (2017) writes that “It’s hardly a secret that free markets have fallen out of favor among conservatives throughout the West in recent years.”

In these times of transition, it may be helpful to look back to the past for wisdom. In this paper, we will take a look at the economic views of Edmund Burke (1729-1797). The 18th century Anglo-Irish political theorist, philosopher and statesman is commonly considered “the father of conservatism” (Matheson Miller, 2013) – or, “indeed, the classic conservative – against whom all other conservatives must measure themselves to prove their authenticity” (Dreyer, 2007). Yet, “Burke’s economic views generally receive sparse attention” (Gregg, 2017). This is despite him being “a great economist,” as another conservative figurehead, Russell Kirk (1981, p. 228), noted. Thus, it might be worthwhile to take a closer look at his thoughts in this field.

Burke and Smith

A first sign of Burke’s economic views can be found in the résumé of Edmund Burke by the founder of modern Communism,Karl Marx, who wrote in Das Kapital (1867) that “This sycophant who, in the pay of the English oligarchy, played the romantic laudator temporis acti against the French Revolution, just as, in the pay of the North American Colonies, at the beginning of the American troubles, he had played the Liberal against the English oligarchy, was an out and out vulgar bourgeois.”

Another famous economist, Adam Smith, had a diametrically opposed opinion to Marx – it is said that the most prominent representative of the Scottish Enlightenment remarked that “Burke is the only man I ever knew who thinks on economic subjects exactly as I do, without any previous communications having passed between us” (quoted in Norman, 2013, p. 199). Smith was much impressed by Burke’s A Philosophical Enquiry into the Origin of our Ideas of the Sublime and Beautiful (Norman, 2013, p. 28).

Indeed, Smith and Burke seemed to have been “personal friends who not only shared a sentimental attachment, but also considered themselves to be in fundamental agreement on most philosophical and political issues.” (Frazer, 2015, p. 1) The extent of their friendship is disputed to this day, however. Kirk (1981, p. 229), for example, argues that while they “occassionally met” in London, Smith hosted Burke in Edinburgh at least once, and “Smith obtained Burke’s nomination to the Royal Society of Edinburgh,” they were still “friendly, in short, but not close collaborators.”

Despite this, mutual agreements extend far beyond Smith’s warm words from above. Burke’s reviews of Smith’s two major works, An Enquiry into the Nature and Causes of the Wealth of Nations and The Theory of Moral Sentiments, were both ecstatic. In the review of the latter book, a copy of which Burke received from their mutual friend David Hume (Burke, 1759a, p. 46), he wrote that “We conceive, that here the theory is in all essential parts just, and founded on truth and nature.” (Burke, 1759b) In addition, he called Moral Sentiments an “excellent book.”

His review of the Wealth of Nations was no less raving: “It is a complete analysis of society, beginning with the 1st rudiments of the simplest manual labor, and rising by an easy natural predation to the highest attainments of mental powers.” (Burke, 1776, p. 241) In a letter to Smith, Burke (1759a) writes that “I am not only pleased with the ingenuity of your Theory; I am convinced of its solidity and Truth; and I do not know that it ever cost me less trouble to admit so many things to which I had been a stranger before.”

This affection, both personally as well as intellectually, between the most notable Laissez faire economist and Burke provides signs of Burke’s own convictions on economics – namely, that the Irish was “a committed free trader, a strong defender of private property, and a skeptic of government economic intervention.” (Gregg, 2017)It is this what Burke would show throughout his life.

The Statesman

To analyze Edmund Burke’s economic views, we need to separate Burke as the thinker and philosopher, with Burke as the politician. That the intellectual and political are two different realms was clear to Burke. In an unusually heated letter to Adam Smith, which was found in the papers of Thomas Jefferson, Burke is supposed to have written, “You, Dr. Smith, from your professor’s chair, may send forth theories upon freedom of commerce as if you were lecturing on pure mathematics. But legislators must proceed by slow degrees, impeded as they are in their course by the friction of interest and the fiction of preference” (Boyd, 1953, p. 59).

Burke, indeed, clearly differantiated between what is true “in theory” and what “in fact,” as  Nakazawa (2010, p. 291) notes: “Burke was far from being a student of the cold logic of metaphysical and dogmatic laissez-faire doctrines. He based his choice of economic policies on prudence, not on principle.”

Despite this, Burke was “From his earliest days in Parliament to his final years […] a firm supporter of commercial liberty, both domestic and foreign.” (Collins, 2017, p. 595)Already in 1772, he was arguing in parliamentary debates that a free market without government intervention is the best way to help the poor (Gregg, 2017). This support for private initiative over government interventions would continue for most of his political career.

“You hope, sir, that I think the French deserving of liberty. I certainly do. It is our inheritance. It is the birthright of our species.”

Edmund Burke

In 1778, he was leading the charge in a successful attempt to make the British government remove obstacles to trade with Ireland (Norman, 2013, p. 90), arguing “That growth required the ability to trade freely, and it should not be begrudged the Irish, for it was a mistake to see trade as a fixed quantity: ‘It is hard to persuade ourselves that every thing which is got by another is not taken from ourselves.’” He proclaimed that “England and Ireland may flourish together. The world is large enough for us both” (quoted in Norman, 2013, p. 90).

Equally, he was arguing that free trade and friendship should reign in the relationship to a United States that had just declared independence from Britain. In AnAccount of the European Settlements in America, his “own position combined free trade with a belief in the social order and an emphasis on institution-building. … The colonies should be encouraged to specialize, and develop competitive advantage where they should” (Norman, 2013, p. 30). And while he did argue in favor of a strong hand from Britain vis-à-vis France during their revolution, this was so because of the revolutionary efforts themselves, which he was famously skeptical of. In general, the French should be free, too, because they are naturally endowed to be so – a consistent theme in Burke, as we will see in chapter 4 – as he wrote to a Monsieur Dupont: “You hope, sir, that I think the French deserving of liberty. I certainly do. I certainly think that all men who desire it, deserve it. It is not the reward of our merit, or the acquisition of our industry. It is our inheritance. It is the birthright of our species.” (Burke, 1920, p. 268)Indeed, the importance of liberty in his conduct with France can be seen in his seminal Reflections on the Revolution in France, where he writes that “It is better to cherish virtue and humanity, leaving much to free will, even with some loss to the object, than to attempt to make men machines and instruments of a political benevolence. The world on the whole will gain by a liberty without which virtue cannot exist.” (Burke, [1790] 1999, p. 201)

Most radical of all is Burke’s handling of a “famine that hit England during the war with France.” (Nakazawa, 2010, p. 285) In his last known work, which was posthumously released, called Thoughts and Details on Scarcity (1795), he argued that the government should not – even now, in this situation of emergency – interfere in the market: “Of all things, an indiscreet tampering with the trade of provisions is the most dangerous.” (Burke, 1795)Furthermore, “To provide for us in our necessities is not in the power of Government. It would be a vain presumption in statesmen to think they can do it. The people maintain them, and not they the people. It is in the power of Government to prevent much evil; it can do very little positive good in this, or perhaps in any thing else.”

What the essay ultimately amounts to is a complete rejection of any government-sponsored welfare: “My opinion is against an over-doing of any sort of administration, and more especially against this most momentous of all meddling on the part of authority; the meddling with the subsistence of the people.” Instead, private charity and the market, through “the laws of commerce, which are the laws of nature, and consequently the laws of God,” would solve the problem. And indeed, Burke led by example, who “had bread made at his own estate and sold to the poor at a reduced price” (Pappin III, 2002).

To provide for us in our necessities is not in the power of Government. It is in the power of Government to prevent much evil; it can do very little positive in this, or perhaps in any thing else.

Edmund Burke

Thus, Burke seems to have followed through with his goal in politics, which he once summed up as, “to which I attached myself the most particularly, was to fit the principle of a free trade in all the ports of these Islands, as founded in justice, and beneficial to the whole,  but principally to this, the seat of the supreme power” (Burke, 1834, p. 377).

However, some scholars, such as Petrella (1963-64, p. 55-56), see “a major contradiction” arising in Burke’s policies: “Although in principle Burke opposed state intervention into the economic order, in fact he advocated it.” Examples are his attempts to abolish slave trade and his fight against the East India Company.

The Thinker

What seems like a contradiction at first sight, does make more sense if we look at the reason why Edmund Burke was in favor of free trade and the market economy in the first place. Burke was not arguing on simple utilitarian grounds. He might have thought that the free market is the economic system which brings forth most material wealth and prosperity – in his Speech on Economical Reform, he stated that “commerce … flourishes most when it is left to itself” (quoted in Nakazawa, 2010, p. 290). But he never thought of this as being a satisfactory argument.

In fact, that economists often argue merely on materialist grounds, only looking at the total gain or loss through cost-benefit analysis, was one reason why he was always skeptical of the discipline. There were other factors that mattered and economics could only be a tool to get there: “Economy in my plan was, as it ought to be, secondary, subordinate, instrumental” (Burke, 1898, p. 14). Indeed, “He rebukes obsession with economic concerns, perceiving that society is something vaster and nobler than a mere commercial contract,” as Russell Kirk (1981, p. 229) notes.

Instead, “In Burke’s thought, free trade was not based upon utility but on justice” (Stanlis, 2003, p. 56). For him, advocating for free trade begins with the individual. Every human is born with certain inalienable rights – given by God Himself, which should always be honored. “The rights of men, that is to say, the natural rights of mankind, are indeed sacred things; and if any public measure is proved mischievously to affect them, the objection ought to be fatal to that measure.” (Burke, [1783] 1814, p. 1315) Among those rights is that men “have a right to the fruits of their industry; and to the means of making their industry fruitful” (Burke, [1790] 1999, p. 150).

This translates into the right of private property (“a right to the fruits”) and the right to trade and interact with others, as if they were not able to do that, they would hardly be able to make fruitiful, i.e., to economize, on their industry. It is here where Burke’s opposition to slavery or the doings of the East India Company are not contradictions, but fit in the picture: even if these “state interventions” weren’t making sense from a purely utilitarian standpoint, he was still in favor of them because both slavery as well as the Company were preventing some from exercising their natural rights.

Men have a right to the fruits of their industry; and to the means of making their industry fruitful. Whatever each man can separately do, without trespassing upon others, he has a right to do for himself.

Edmund Burke

His advocacy for free trade does not stop there, though. For Burke, humans “are social animals heavily driven by instinct and emotion,” (Norman, 2013, p. 28)and “people naturally imitate each other; they cooperate and compete; and they establish practices, habits, rules and codes of behaviour which make this cooperation and competition possible” (p. 207).

Over time – and through a bottom-up process, a social order comes into being. This order, full of institutions, traditions, social mores, rules, and processes, “becomes a repository of shared knowledge and inherited wisdom” (p. 199). Such an order is not designed by a single mind at a single moment in history. It “evolves slowly over time” (p. 200) in the “matter of gradual evolution, a long-term trial and error process” (Levin, 2016). In this regard, Burke can be seen as a precursor to later theories of spontaneous orders, becoming popular in the works of Friedrich A. von Hayek in the second half of the 20th century. It is in this sense also not surprising why Hayek called Burke “the man who to me seems to be one of the greatest representatives of true individualism,” (Hayek, 1948, p. 5)‘true’ individualism being the one based on spontaneous social orders. Habermann (2009, p. 7) also writes that “Hayek was – as a thinker in the tradition of the Old Whigs – heavily influenced by Burke’s writings” and sees many parallels in Hayek’s Constitution of Liberty.

However, Burke was also of the understanding that the social order – which also encompasses the economic realm – should be to the benefit of all (Norman, 2013, p. 13). Yet, this was not an argument against free markets and private organizations, but rather one in favor of it. Levin (2013) writes that“A free economy, as Burke saw it, would help sustain the stability of society and therefore its wealth—some of which could (and should) then be used by the wealthy to help the poor.”

The market economy was then the preferred system for Burke to bring forth both human flourishing as well as a virtuous people. A free economy, for instance, would be a good transmitter of all the knowledge that is dispersed in a society, and could aggregate all the knowledge in a society and actually make it useful (Levin, 2016).

Furthermore, it would make people more virtuous. First, their actions that “make their industry fruitful” would be profitable for the rest of society, which is an argument where he channels Adam Smith and the latter’s metaphor of the invisible hand: “The benign and wise Disposer of all things … obliges men, whether they will or not, in pursuing their own selfish interests, to connect the general good with their own individual success”(Burke, 1795).

Second, a social order based on private intiative would make people more caring for the plight of others. Burke thought that each member of society “has a right to a fair portion of all which society, with all its combinations of skill and force, can do in his favour” (Burke, [1790] 1999, p. 150). This is not an argument for redistributionist policies by the state – which he actively rebuked (Pappin III, 2002), but rather that those that have should voluntarily care for those less fortunate.

The only times the government could intervene – other than finally fulfilling the natural rights of those having seen their rights abused – is if this social order is threatened by the results of the free market (Levin, 2016). One such example is the existence of monopolies, as it perverts the virtuous results the markets should bring about by “permitting egoism to override sympathy,” as Petrella (1963-64, p. 58) puts it.

The second example is that of technological progress. Here, Burked differentiated between reform and innovation. Change in and of itself would neither be right or wrong – it is simply a natural part of our world. But while reform would simply build on the social order, innovation would potentially discard or disrupt the order. Reform, in Burke’s mind, is of no issue and potentially even beneficial. But innovation might be reason to intervene in the market processes to save the social order (Petrella, 1963-64, p. 60). What this formula would mean for today’s world – especially in the wake of discussions around the role of ‘Big Tech’ and social media as well as new biotechnologies and transhumanism – should be investigated further in the future.

For A Virtuous Free Trade

Conservatives have recently turned against free trade and the market economy. Instead, they have embraced a philosophy which is based more on economic nationalism and an active social policy, administered by the central government. Yet, if they were to take a closer look at the founder of modern conservatism – a hero for almost all of them still, they would find a thinker who was fully committed to the principles of economic liberty, trade with everyone, and voluntary charity. Things have changed since the 18th century: in contrast to the British islands back then, ours is a fully globalized world with international trade on a much larger scale. Progress and prosperity have accelerated. Whether Burke would still be the same unabashed free trader, no one knows.

Nonetheless, what we see in Burke is someone who would defend this economic system against any opponents and crises. Surely, he could often be mesmerized by the mechanisms of the market itself, like when he marveled of the price system: “Nobody has observed with any reflection what market is, without being astonished at the truth, the correctness, … with which the balance of wants is settled” (quoted in Petrella, 1963-64, p. 55).

Burke’s argument in favor of economic freedom is more than that, however. It is one which defends freedom because it is a natural right of every human, given by God, to produce and own his products and trade them freely, and one in which an extended order comes into being in a bottom-up process – an order, which, through voluntary cooperation, leads to a virtuous citizenry. Government interventions can’t provide this in Burke’s view: the state divides; the market brings together. It is this lesson from Edmund Burke that conservatives need to bear in mind again today.

Kai Weiss is a Research Fellow at the Austrian Economics Center.

Bibliography

Boyd, J. (1953). The Papers of Thomas Jefferson, Volume 8 (25 February to 31 October 1785).Princeton, New Jersey: Princeton University Press.

Burke, E. (1759a). Letter to Adam Smith, dated September 10, 1759. In Correspondence of Adam Smith(pp. 46-47). Liberty Fund.

Burke, E. (1759b). Review of Adam Smith, Theory of Moral Sentiments. Annual Register, 2, pp. 484-489.

Burke, E. (1776). Review of Adam Smith, An Enquiry into the Nature and Causes of the Wealth of Nations. Annual Register, 19, p. 241.

Burke, E. (1780). Speech on the Plan For Economical Research.Retrieved from https://www.ourcivilisation.com/smartboard/shop/burkee/extracts/chap7.htm

Burke, E. (1795). Thoughts and Details on Scarcity, Originally Presented to the Right Hon. William Pitt, In the Month of November, 1795.Retrieved from University of Michigan Library: https://quod.lib.umich.edu/e/ecco/004903053.0001.000?rgn=main;view=fulltext

Burke, E. (1814 [1783]). Debate in the Commons on the Motion for going into a Committee on Mr. Fox’s India Bill. The Parliamentary History of from the Earliest Period to the Year 1803, Volume 23(pp. 1306-1434). London: Johnson Reprint Company.

Burke, E. (1834). The Works of Edmund Burke, Volume 2.New York: George Dearborn, Publisher.

Burke, E. (1898). Letter to a Noble Lord. Retrieved from Cornell University Library: https://archive.org/details/cu31924031222346/page/n8

Burke, E. (1920). Letter to Monsieur Dupont. In H. Laski, Letters of Edmund Burke: A Selection(pp. 266-279). Oxford University Press.

Burke, E. (1999 [1790]). Reflections on the Revolution in France.Indianapolis: Liberty Fund.

Collins, G. (2017). Edmund Burke on the Question of Commercial Intercourse in the Eighteenth Century. The Review of Politics, 79(4), 565-595.

Del Mastro, A. (2019). The Conservative Case for Bernie Sanders. Retrieved from Arc Digital: https://arcdigital.media/the-conservative-case-for-bernie-sanders-f43fe498b4df?fbclid=IwAR33cJqqGcYOxlu2yW_m44SeWTGquLjfUzDctfrM4DG6KraxOV-4-czx7gQ

Dreyer, F. (2007). Taking the full measure of Edmund Burke. Retrieved from http://www.pressreader.com/canada/national-post-latest-edition/20071116/282059092649099.

Frazer, M. (2015). Seduced by System: Edmund Burkes’ Aesthetic Embrace of Adam Smith’s Philosophy.Retrieved from Harvard Library: https://dash.harvard.edu/bitstream/handle/1/11022236/Seduced%20by%20System%203.0.pdf

Gregg, S. (2017). Edmund Burke’s conservative case for free markets. Retrieved from Acton Institute: https://acton.org/pub/commentary/2017/11/07/edmund-burkes-conservative-case-free-markets

Habermann, G. (2009). Geleitwort. In D. Doering, Freiheit, Tradition, Revolution: Ein Edmund Burke-Brevier(pp. 7-9). Bern: hep verlag.

Hayek, F. (1948). Individualism: True and False. In F. A. Hayek, Individualism and Economic Order(pp. 1-33). Chicago: The University of Chicago Press.

Kirk, R. (1981). Three Pillars of Order: Edmund Burke, Samuel Johnson, Adam Smith. Modern Age, 25(3), 226-233.

Levin, Y. (2013). The Great Debate: Edmund Burke, Thomas Paine, and the Birth of Right and Left.New York: Basic Books.

Levin, Y. (2016). Edmund Burke’s Economics of Flourishing. Retrieved from American Enterprise Institute: http://www.aei.org/spotlight/human-flourishing-burke/

Marx, K. (1867). The Capital.Retrieved from https://www.marxists.org/archive/marx/works/1867-c1/ch31.htm

Matheson Miller, M. (2013). The Politics and Economics of Edmund Burke.Retrieved from: http://www.michaelmathesonmiller.com/wp-content/uploads/2013/06/AU-2013-The-Politics-and-Economics-of-Edmund-Burke-HANDOUT.pdf

McCarthy, D. (2019). A New Conservative Agenda. Retrieved from First Things: https://www.firstthings.com/article/2019/03/a-new-conservative-agenda

Nakazawa, N. (2010). The Political Economy of Edmund Burke: A New Perspective. Modern Age, 52(4), 285-292.

Norman, J. (2013). Edmund Burke: Philosopher, Politician, Prophet.London: William Collins.

Pappin III, J. (2002). The Place of Laissez-Faire Economics in Edmund Burke’s Politics of Order.The Austrian Scholars Conference.

Petrella, F. (1963-64). Edmund Burke: A Liberal Practitioner of Political Economy. Modern Age, 8(1), 52-60.

Stanlis, P. J. (2003). Edmund Burke and the Natural Law.New Brunswick: Transaction Publishers.

Watson, K. (2018). There’s a partisan split on tariffs, new Pew poll finds. Retrieved from CBS News: https://www.cbsnews.com/news/theres-an-increasingly-partisan-split-on-tariffs-new-pew-poll-finds/

Illustrations: Trump p. 0 (Dreamstime), Stores on Main Street p. 0 (dizzydj311, Pixabay), Burke p. 0 (Joshua Reynolds, National Portrait Gallery), Burke p. 1 (Joshua Reynolds, Rock Valley College), Man on Street p. 2 (Free-Photos, Pixabay), Smith p. 4 (James Tassie, Public Domain), Deptford Port p. 6 (William Crotch, The British Library), Novgorod p. 8 (Apollinary Vasnetsov, Perm Art Museum), Hamburg p. 11 (Free-photos, Pixabay)

Download the study here!

More Stories