Commerce Education Essay

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The progress of freedom depends upon the establishment of a society in which no single group or class dominates and imposes their will upon all others, which, as Cobden correctly states, presupposes peaceful conditions, commercial activities and educational opportunities for its members. The maintenance of peace propitiates stable conditions in which individuals are confident enough about the future that they can engage in commercial activities without fearing violence or disruption. The spread of commerce engenders an independent class of people not reliant upon autocratic rulers for their livelihood and raises the standard of living for everybody within society, thus permitting all classes to attain autonomy and finally freedom. Moreover, commercial activity emancipates people from poverty because they do not have to produce all of their own food and goods anymore. The diffusion of education facilitates the transmission of ideas regarding the conditions of society amongst the populace and also technical knowledge useful for commercial activities. Therefore, the progress of freedom depends upon the creation of a civil society in which peaceful conditions have allowed the spread of commercial activity and the diffusion of education that emancipates and enriches the entire society. The rise of Western Europe was a direct result of these conditions, though this region was fortuitous in possessing resources that could not easily be monopolized by any one group.

Peace is a prerequisite for freedom because stability allows people to plan for the future without undue concern such that individuals are willing to start businesses, buy property, invest and spend. Without security, people would not want to start businesses that could be destroyed, buy property that could be stolen, invest money that could be lost or spend money that might be needed for emergencies—assuming people would even bother to use money under such conditions. It should be noted that security in this instance means “security against severe physical privation” and not “security of a given standard of life”: Hayek points out that the former type of security “can be provided for all outside of and supplementary to the market system,” and the latter “can be provided only for some and only by controlling or abolishing the market” (120). Thus, the first type of security is a prerequisite for freedom while the second, as wee shall see, is an obstacle to freedom.

In addition, the diffusion of education would also be hindered under unstable conditions because it would be virtually impossible for people to become educated if schools were destroyed and students were compelled to engage in combat. There would be no companies to print books, no funds for research and the only education necessary would be the art of warfare. The political situation would not be conducive to the progress of freedom because those most able to effectively utilize force would exercise power rather than the majority of the people and their representatives. Indeed, this is exactly the type of extreme situation found in such places as Afghanistan, Somalia and Congo. When citizens, rather than tyrants or aristocrats, gain political power due to economic activity, this also creates incentives for maintaining and promoting peace because “the natural desire of people to avoid the loss of their property, their loved ones, and their own lives,” causes them to press their governments against violence (Rummel 149).

The maintenance of peace, however, is not the only necessary condition for freedom since stability is required for authoritarian control as well; therefore, the spread of commercial activity is the most vital requirement for the progress of freedom. North and Thomas show that trade in Medieval Europe greatly contributed to the establishment of political order beyond the local manor (65). Another important benefit of commercial activity is the emergence of an independent class not beholden to monarchs, aristocrats or clergy for support. Merchants cannot only obtain independence, but they can even ensnare the propertied classes who became dependent upon merchants for goods and services, not to mention the creation of wealth throughout society. Smith also describes how landed aristocrats eventually lost their privilege by purchasing consumer goods and other “baubles” rather than keeping their retainers, who subsequently became free (199-201). By creating wealth, merchants made themselves so useful to the rulers that the latter could hardly afford to extirpate the former and even came to rely upon merchants to generate tax revenues for the state.

Commerce benefited members of the lower classes as well who were able to find employment with private companies rather than being bound to the land, joining the clergy or becoming soldiers. Furthermore, the increased production of goods brought lowered prices, thus permitting people to spend more money and generate employment for more people. This economic freedom, which entails making individual consumer choices, for all classes inevitably translates into political freedom (Hayek 100). Such a situation placed the merchant and working classes in a position to assail the privileges of the propertied class, though divisions between and amongst merchants and workers kept society in balance since no one group could impose its will upon the others. The process of exchanging and bargaining arising from economic activity therefore facilitated the same process in the political sphere (Rummel 138).

Finally, the diffusion of education is necessary for the progress of freedom and is intimately interwoven with the spread of commerce, which requires literacy and mathematical skills. Moreover, the diffusion of literacy throughout the entire population meant that information and ideas could be expressed, exchanged and evaluated. People were then able effect change within society, and possibly mobilize themselves, even over great distances leaving the propertied class more vulnerable to the non-propertied classes. Without the diffusion of education, people could have never really attained any degree of freedom because they would have been reliant upon others for information. On the other hand, education can become another tool of the rulers utilized to disenfranchise other groups within society: The regime, representing a certain cabal, can manipulate schools in order to teach propaganda inculcating loyalty to them. Of course, all states use propaganda to ingrain some degree of loyalty through education, but this process becomes extreme and unchecked in a society dominated by only one group or class.

On the other hand, government efforts to create freedom are largely futile because this impetus must arise from within civil society and can hardly be imposed by fiat upon a society dominated by certain cabals that inhibit peace, commerce and/or education when it is in their interest to do so. Governments, hijacked by such groups whose interests are contrary to the emancipation of society, often are the agents seeking to limit the establishment of an egalitarian society rather than altruistically organizing society to promote freedom. Every attempt of a self-anointed elite to deliberately reorganize a society so as to promote freedom has degenerated into authoritarianism as its members took advantage of their influence for personal gain and refused to relinquish their power. In Communist states, such as Cuba, Vietnam and (nominally) the People’s Republic of China, attempts of an elite to establish a utopian proletarian society have created instead authoritarian regimes that show no indication of ever willingly conceding power to society at large, as was the case with the former Soviet Union.

While governments are capable of ensuring stability, sometimes to the disadvantage of society, the ability of governments to spread commerce is far more complicated matter and murky. The most significant obstacle to such an occurrence is that governments inevitably represent their own unique interests vis-à-vis society at large. In an authoritarian state, this simply means that one group controls the government and benefits from this control; however, even in free countries, governments tend to develop and represent the interests of more powerful groups over others. Individuals and groups within governments further their own interests by employing their political power to obtain financial gain. Conversely, those who already possess wealth can exploit their resources to obtain political power, thereby allowing them to protect and expand their financial interests. Most often, such manipulating occurs simultaneously since politics and economics are so closely intertwined. In addition, officials ensconced within the government inevitably lobby for increased bureaucratic power that can inhibit commercial activity while professing to be acting on behalf of citizens, or entrenched business interests may even encourage state regulations in order to damage competitors. The results in all these cases are the same: commercial activities are skewed to benefit a powerful elite that discourages commercial activity.

Nowhere is this iniquity more evident than in when wealthy states demand access to the markets of poorer states while protecting their markets from the cheaper exports of these same states, often under the veil of nationalism. Rather than spreading commerce, such actions retard commerce by inhibiting the ability of producers in poorer states to sell their goods and denying consumers in wealthier states the ability to purchase cheaper imported goods. Furthermore, protected industries in the latter states are no longer forced to compete with those in poorer countries, so the quality of the products and services drastically decreases. An excellent example of such behavior is the constant efforts of the United States steel industry to impose high tariffs upon steel imported from other countries. Writing in the Wall Street Journal about the negative domestic consequences of trade restrictions, Pete Du Pont bluntly states:

Let’s be plain: Steel tariffs are a bad idea—bad for the steel industry; bad for governments that use steel in bridges and other public infrastructure projects (not to mention all the steel used by the military); bad for consumers, who will have to pay more for not only cars but all products that use steel; and bad for taxpayers, who will have to cough up billions of dollars to cover additional industry subsidies.

Discussing the Commerce Department’s imposition of anti-dumping laws in 1993, Krauss shows that trade restrictions in the steel industry do protect jobs in that industry, but many American jobs are lost in other industries that purchase steel as an input and American companies and consumers are penalized because they must subsequently pay higher prices for steel products (21-2 and 24-5).

Du Pont’s assessment neglects the disastrous economic effects of tariffs on impoverished developing countries, many of which are potential recruiting grounds for terrorist groups like Al-Qaeda that thrive under such miserable conditions. Though the United States does import steel from several developed countries, the majority of those that would be adversely affected are developing countries, such as Mexico, Turkey, Brazil, China, Argentina, South Africa and Ukraine. Everybody would have benefitted had the Clinton and second Bush administrations refrained from utilizing anti-dumping laws for the benefit of certain entrenched elites, except those who obviously derive their profit from America’s inefficient steel industry. Other egregious examples include the textile industry, the auto industry and the agricultural sector—the last of which benefits from subsidies disguised as tax breaks. The ability of these cabals to influence our decisions undermines our greatest freedom—our ability to choose for ourselves. George is therefore correct when stating, “Free trade...offers no special advantage to any particular interest,” (12) which means that such policies unfortunately have few stalwart defenders, even in the business world.

In conclusion, we can see that the effort of governments to promote freedom is inevitably flawed due to the machinations of certain cabals which gain influence and manipulate policies to their advantage. Peace is necessary so that citizens can engage in commercial activities and education. The former activity creates independent classes that can challenge rulers and hereditary rulers and aristocrats while the latter allows citizens to evaluate their society and exchange ideas. As we have seen, the relationship between peace, commerce and education is actually more complicated: Commercial activity encourages peace and order because people are loath to lose their standard of living once their lives improve; commerce also promotes education by creating an independent source of funding for universities. Education encourages peace by raising the level of intelligence throughout society so that people are able to avoid serious conflicts and evaluate their society; education furthermore disseminates skills and training necessary for commercial activity.

There is one question unanswered by Cobden: Who is responsible for the “maintenance of peace and the spread of commerce and the diffusion of education” if not governments? The answer, which has been made implicitly in this essay, is private citizens and associations; in other words, society is ultimately responsible for the progress of freedom. Of course, for geographic reasons most societies have developed in regions that have been subject to continual invasions, often by savage nomads, and/or regions wherein one group could easily hoard resources. The Middle East and Central Asia have historically suffered from both of these conditions and, therefore, have consistently produced authoritarian and conservative regimes. Russia and China have primarily experienced periodic invasions by nomads such that their regimes have been generally less authoritarian with the exception of their early Communist eras when Stalin and Mao ruthlessly sought to overhaul their respective societies. Most other regions, such as India, Africa and South America, witnessed more hoarding of resources by elites than hordes of nomads, and this process is slowly being undone by the growth of civil society as the free market inexorably spreads throughout the world. Ultimately, though, the people of every society regardless of its history must eventually decide if they want freedom and take the necessary steps to achieve this goal, which were so eloquently expressed by Cobden.

References

Du Pont, Pete. “Bush’s Steel Crucible: Will He Help A Big Industry at Consumers’ Expense?” Wall Street Journal. January 2, 2002.

George, Henry. Protection or Free Trade. New York: Robert Schalkenbach Foundation, 1966.

Hayek, Friedrich, A. The Road to Serfdom. Chicago: University of Chicago Press, 1944.

Krauss, Melvyn. How Nations Grow Rich: The Case for Free Trade. New York: Oxford University Press, 1997.

North, Douglass C. and Robert Paul Thomas. The Rise of the Western World: A New Economic History. Cambridge: Cambridge University Press, 1973.

Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. “Great Books of the Western World” series. Ed. Mortimer J. Adler. London: Encyclopaedia Britannica, 1993.


Brian Richey is a senior studying political science and history at the University of Illinois-Chicago.

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