The Humanity of Trade; F. Chodrov

The simple barter is in terms ofhu man happiness no different from a trade transaction involving banking operations, insurance, ships, rail roads, wholesale and retail estab lishments; for in any case the effect and purpose of trade is to make up a lack of satisfactions. The boy with a pocketful of marbles is handicapped in the enjoyment of life by his lack of tops, while the other is similarly discomfited by his need for marbles; both have a better time of it after the swap, while their respective sur pluses before the swap are nui sances. In like manner, the Detroit worker who has helped to pile up a heap of automobiles in the ware house is none the better off for his efforts until the product has been shipped to Brazil in exchange for his morning cup of coffee. Trade is nothing but the release of what one has in abundance in order to obtain some other thing he wants. It is as perti nent for the· buyer to say "thank you" as for the seller.

The market place is not necessar ily a specific site, although every trade must take place somewhere. It is more exactly a system of channel ing goodsor services from one worker to another, from fabricator to con sumer, from where a superfluity ex ists to where there is a need. It is a method devised by man in his pur suit of happiness to diffuse satisfac tions, and operating only by the hu man instinct of value. Its function is not only to transfer ownership from one person tp another, but also to direct the current of human exer tion; for the· price-indicator on the chart of the market place registers the desires <;>f people, and the inten sity of thes¢, desires, so that other 23 24 THE FREEMAN January people (looking to their own profit) may know how best to employ them selves. Living without trade may be pos sible, but it would hardly be living; at best it would be mere existence.

Until the market place appears, men are reduced to getting by with what they can find in nature in the way of food and raiment; nothing more. But the will to live is not merely a crav ing for existence; it is rather an urge to reach out in all directions for a fuller enjoyment of life, and it is by trade that this inner drive achieves some measure of fulfillment. The greater the volume and fluidity of market place transactions the higher the wage-level of Society; and, inso far as things and services make for happiness, the higher the wage-level the greater the fund of happiness. Policing the Market The importance of the market place to the enjoyment of life is il lustrated by a custom recorded by Franz Oppenheimer in The State. In ancient times, on days designated as holy, the market place and its ap proaches were held inviolable even by professional robbers; in fact, stepping out of character, these rob bers acted as policemen for the trade routes, seeing to it that merchants and caravans were not molested.

Why? Because they had accumu lated a superfluity of loot of one kind, more than they could consume, and / the easiest way of transmuting it into other satisfactions was through trade. Too much of anything is too much. Frank Chodorov (1887-1966) taught in and later directed the Henry George School of Social Science and edited the School's paper, The Freeman. Later he founded his own journal, analysis, eventually merg ing it with the Washington newslet ter, Human Events. In 1954-55 he edited The Freeman for The Foun dation for Economic Education, and continued to appear in later issues of the journal. This article, reprinted from the July 1956 issue, is especially pertinent in light of the trade wars plaguing the world today. The market place serves not only to diffuse the abundances that hu man specialization makes possible, but it is also a distributor of the mu nificences of nature. For, in her in scrutable way, nature has spread the raw materials by which humans live over the face of the globe; and unless some way were devised for distributing these raw materials, they would serve no human purpose.

Thus, through the conduit of trade the fish of the sea reach the miner's table and fuel from the inland mine or well reaches the boiler of the fish ing boat; tropical fruits are made available to northerners, whose iron 1982 THE HUMANITY OF TRADE 25 mines, in the shape of tools, make production easier in the tropics. It is by trade that the far-flung ware houses of nature are made accessi ble to all the peoples of the world and life on this planet becomes that much more enjoyable. We think of trade as the barter of tangible things simply because that is obvious. But a correlative of the exchange of things is the exchange of ideas, of the knowledge and cul tural accumulations of the parties to the transaction. In fact, embodied in the goods is the intelligence of the producers; the excellent woolens im ported from England carry evidence of thought that has been given to the art of weaving, and Japanese silks arouse curiosity as to the ideas that went into their fabrication. We acquire knowledge of people through the goods we get from them. Aside from that correlative of trade, there is the fact that trading involves hu man contacts; and when humans meet, either physically or by means of communication, ideas are ex changed. "Visiting" is the oil that lubricates every market place oper ation.

It was only after Cuba and the Philippines were drawn into our trading orbit that interest in the Spanish language and customs was enlivened, and the interest in creased in proportion to the volume of our trade with South America. As a consequence, Americans of the present generation are as familiar with Spanish dancing and music as their forefathers, under the influ ence of commercial contacts with Europe, were at home with the French minuet and the Viennese waltz. When ships started coming from Japan, they brought with them stories of an interesting people, sto ries that enriched our literature, broadened our art concepts, and added to our operatic repertoire. It is not only that trading in itself necessitates some understanding of the customs of the people one trades with, but that the cargoes have a way of arousing curiosity as to their source, and ships laden with goods are followed with others carrying explorers of ideas; the open port is a magnet for the curious. So, the ten dency of trade is to break down the narrowness of provincialism, to liq uidate the mistrust of ignorance. So ciety, then, in its most comprehen sive sense, inCludes all who for the improvement •of their several cir cumstances engage in trade with one another; its. ideational character tends toward ,a blend of the hetero geneous cultures of the traders. The market place unifies Society.

The Trading Community The concentration of population determines the character of Society only becausecontinguity facilitates exchange. But contiguity is a rela tive matter, depending on the means 26 THE FREEMAN January for making contacts; the neutraliza tion of time and space by mechani cal means makes the whole world contiguous. The isolationism that breeds an ingrown culture, and a mistrust of outside cultures, melts away as faster ships, faster trains, and faster planes bring goods and ideas from the great beyond. The pe rimeter of Society is not fixed by po litical frontiers but by the radius of its commercial contacts. All people who trade with one another are by that very act brought into commu nity. The point is emphasized by the strategy of war. The first objective of a general staff is to destroy the market place mechanisms of the en emy; the destruction of his army is only incidental to that purpose. The army could well enough be left in tact if his internal means of com munication were destroyed, his ports of entry immobilized, so that spe cialized production, which depends on trade, could no longer be carried on; the people, reduced to primitive existence, thus lose the will to war and sue for peace. That is the gen eral pattern of all wars. The more highly integrated the economy the stronger will be the nation in war, simply because of its ability to produce an abundance of both mili tary implements and economic goods; on the other hand, if its ability to produce is destroyed, if the flow of goods is interrupted, the more susceptible to defeat it is, because its people, unaccustomed as they are to primitive conditions, are the more easily discouraged. There is no point to the argument as to whether "guns"

or "butter" are more important in the prosecution of war. Intervention Is War It follows that any interference with the operation of the market place, however done, is analogous to an act of war. A tariff is such an act. When we are "protected" against Argentine beef, the effect (as in tended) is to make beef harder to get, and that is exactly what an in vading army would do. Since the duty does not diminish our desire for beef, we are compelled by the dimin ished supply to put out more labor to satisfy that desire; our range of possibilities is foreshortened, for we are faced with the choice of getting along with less beef or abstaining from the enjoymAnt of some other good. The absence of a plenitude of meat from the market place lowers the purchasing power of our labor. We are poorer, even as is a nation whose ports have been blockaded. Moreover, since every buyer is a seller, and vice versa, the prohibi tion against their beef makes it dif ficult for Argentineans to buy our automobiles and this expression of our skills is constricted. The effect of a tariff is to drive a potential buyer out of the market place. The 1982 THE HUMANITY OF TRADE 27 argument that "protection" provides jobs is patently fallacious. It is the consumer who gives the worker a job, and the consumer who is pre vented from consuming might as well be dead, as far as providing produc tive employment.

Incidentally, is it jobs we want, or is it beef? Our instinct is to get the most out of life with the least expen diture of labor. We labor only be cause we want; the opportunity to produce is not a boon, it is a neces sity. Neither the domestic nor the foreign producer "dumps" anything into our laps. There is a price on ev erything we want and the price is always the weariness of toil. What ever causes us to put out more toil to acquire a given amount or kind of satisfactions is undesirable, for it conflicts with our natural urge for a more abundant life. Such is a tariff, an embargo, an import quota or the modern device of raising the price of foreign goods by arbitrarily lower ing the value of our money. Any re striction of trade, internal or exter nal, does violence to a man's primordial drive to improve his cir cumstances. The Seeds of Conflict Just as trade brings people to gether, tending to minimize cultural differences, and makes for mutual understanding, so do impediments to .trade have the opposite effect. If the customer is always "right," it is easy to assume that there is some thing wrong with the non-buyer. The faults ofthose'who refuse to do busi ness with us are accentuated not only by our loss but also by the sting of personal a~ront. Should the boy with the tops refuse to trade with the boy who· has marbles, they can no longer play together; and this de socialization can easily stir up an argument over the relative demerits of their dogs: or parents. Just so, for all our protestations of good neigh borliness, the Argentinean has his doubts about. our intentions when we bolt our commercial doors against him; compelled to look elsewhere for more substantial friendship, he is inclined to think less of our national character and culture.

The by-product of trade isolation ism is the feeling that the "outsider" is a "different kind" of person, and therefore inferior, with whom social contact is at least undesirable if not dangerous. To what extent this seg regation of people by trade restric tions is the •cause of war is a moot question, but! there can be no doubt that such restrictions are irritants that can give other causes for war more plausibHity; it makes no sense to attack a good customer, one who buys as much of our products as he can use and pays his bills regularly. Perhaps the) removal of trade re strictions throughout the world would do mote for the cause of uni versal peace than can any political 28 THE FREEMAN January union of peoples separated by trade barriers; indeed, can there be a via ble political union while these bar riers exist? And, if freedom of trade were the universal practice, would a political union be necessary?

Testing the Logic Let us test the claims of "protec tionists" with an experiment in logic. If a people prosper by the amount of foreign goods they are not permitted to have, then a complete embargo, rather than a restriction, would do them the most good. Continuing that line of reasoning, would it not be better all around if each community were hermetically sealed off from its neighbor, like Philadelphia from New York? Better still, would not every household have more on its table if it were compelled to live on its own production? Silly as this re ductio ad absurdum is, it is no sillier than the "protectionist" argument that a nation is enriched by the amount of foreign goods it keeps out of its market, or the "balance of trade" argument that a nation pros pers by the excess of its exports over imports. Yet, if we detach ourselves men tally from entrenched myths, we see that acts of internal isolationism such as described in our syllogism are not infrequent. A notorious instance of this is the French octroi, a tax levied on products entering one district from another. Under cover of "quarantine" regulations, Flo~ida and Cali fornia have mutually excluded cit rus fruits grown in the other state.

Labor unions are violent advocates of opulence-through-scarcity, as when they restrict, by direct vio lence or by laws they have had en acted, the importation of materials made outside their jurisdiction. A tax on trucks entering one state from another is of a piece with this line of reasoning. Thus, the "protectionist" theory of fence-building is internal ized, and in the light of these facts our reductio ad absurdum is not so farfetched. The market place, of course, scoffs at such scarcity-mak ing measures, for it yields no more than it receives; if its offerings are made scarce· by trade restrictions, that which remains becomes harder to get, calls for an expenditure of more labor to acquire. The wage-level of Society is lowered. The Labor Theory of Value-and Prosperity The myth of "protectionism" rests on the notion that the be-all and end-all of human life is laboring, not consumption-and certainly not lei sure. If that were so, then the slaves who built pyramids were most ide ally situated; they worked much and received little. Likewise, the Rus sians chained to "five year plans"

have achieved heaven on earth, and so did the workers who, during the depression, were put to moving dirt 1982 THE HUMANITY OF TRADE 29 from one side of the road to the other. Extending this notion that exertion for the sake of exertion is the way to prosperity, then a people would be most prosperous if they all labored on projects with no reference to their individual sense of value. What is euphemistically called "war produc tion" is a case in point; there is in fact no such thing, since the purpose of production is consumption; and it is not on record that any worker built a battleship because he wanted it and proved his craving by will ingly giving up anything in ex change for it. Keeping in mind the exaltation of laboring, would not a people be most uplifted if all of them were set to building battleships, nothing else, in return for the necTrade and Productivity essaries that would enable them to keep building battleships? They cer tainly would not be unemployed.

Yet, if we •base our thinking on the natural urge of the individual to better his circumstances and widen his horizon,Qperating always under the natural law of parsimony (the most for the least effort), we are compelled to ,the conclusion that ef fort which does not add to the abun dance of the market place is useless effort. Society thrives on trade sim ply because trade makes specializa tion possible, specialization in creases output, and increased output reduces the cost in toil for the satis factions me~l'live by. That being so, the market p[ace is a most humane institution. , IDEAS ON LIBERTY THE RULE to remember is that what hurts consumers hurts business, and what hurts business hurts proficiency.• After all, what is profi ciency? Simply the power to produce. The power to produce is best de termined by free trade, and not by bureaucratic decree. The power to produce is a corollary of the power to trade.' Thus the more trade the more production, and the more production the more trade.

Protection, on the other hand, is aimed atthe power to trade. In this, the protectionist government does indeed aid:some industries, but only at the expense of all industry. Under protection, all domestic industry is deprived of markets at home and abroad. All domestic industry is hurt by the higher costs of labor and materials. Thus by restricting the power to trade and locking in inefficiency, the protectionist government restricts the power to produce. This means, in turn, that consumers will. have less, for production constitutes the sole means of consumption. The power to produce, after all, is the power to consume. WILLIAM H. PETERSON, "Barriers to World Commerce"