The first half of the nineteenth century in England was much like contemporary America: It was a country strangled by bureaucratic regulations. Many people were always hungry, not because of poverty level wages, but because the price of grain for bread was kept artificially high by laws which simultaneously prevented the importation of foreign grain and subsidized domestic producers. Food riots, domestic unrest, and a stagnating economy were not sufficiently frightening to make the government eliminate these barriers.
In the midst of all this lived a successful young Manchester textile manufacturer named Richard Cobden (1804-1865). He saw the social injustice, and it made him furious. He was determined to change it, and he did. As a result, the world owes the existence of the free market to him. Cobden demonstrated methods that we can use to break down our own protectionist fair trade laws and massive food subsidies.
Richard Cobden began his public life by leaving his calico printing company to his brother. He received a portion of the profits, which allowed Cobden to devote full time to the cause of free trade. It seemed an impossible task. Yet, seven years later, England had undergone a revolutionary economic, political, and social change. Taxes on grain had been decimated. Unequaled prosperity flooded England. For the next 85 years Britain maintained world economic leadership, and the rallying cry of free trade became much more than an economic slogan. Free trade denoted the philosophy of limited government, social justice, and freedom.
Cobden understood the moral truths behind unregulated commerce. Breaking down barriers to trading freedom broke down class barriers and obstacles to civil rights. It reduced military expansion, since a powerful navy was a legacy from the old mercantile idea that warships protected trade between colonies and other controlled markets.
The Corn Laws
Protectionist tariffs were called Corn Laws. They restricted the free flow of corn, wheat, barley, and oats between Great Britain and foreign countries to shield the British farmer from competition.
Systematic government interference in grain production began in the 1660s. The amended Corn Law of 1774, which controlled legislation for the next half century, is a typical example: when the domestic price of corn, as paid to the farmer by the baker or dealer, fell below ?2.4 a quarter (28 pounds), the farmer was encouraged to sell his products abroad, to prevent the market price from falling still further. He was given a bounty of five shillings for each quarter exported. When corn sold for ?2.8, export was forbidden. At prices between these levels, there was a duty of six pence a quarter. Over time, this system became progressively more bureaucratized, with elaborate regulations specifying how and in what town the price was to be measured, with specific procedures for reporting and allowances for regional differences.1
The Corn Laws displayed another characteristic of government controls: Regulations and subsidies in one area led to the manipulation of tangential areas. In this case, when bad harvests triggered soaring grain and bread prices, the Corn Law mechanism exacerbated the problem, causing still higher prices. This provoked civil disturbances to the point where the government feared insurrection. To defuse the threat, workers wages were subsidized, relative to the price of bread. This subsidy came from the Poor Rates, the British nineteenth-century welfare system. This greatly expanded state entitlement programs, leading to massive fraud, inequities, and even greater civil unrest.
The Corn Laws are not merely things of the past. Their spirit exists in most countries of the world. In the U.S. today, agricultural products are subsidized and stored, to the tune of tens of billions of dollars annually, to keep the price of food artificially high. This enhances the farmers income but it also prevents the poor from eating as they should. This has led, as in nineteenth-century England, to protectionism, international tensions, and the threat of trade wars.
Richard Cobden: Businessman to Pamphleteer
Cobden was born in Dunford, West Sussex, in 1804. Because of a succession of family business failures, his father could not support young Richard. He went to live with an uncle who trained him to be a clerk in his London warehouse. At twenty-one Cobden became a traveling salesman. He was so successful that in 1831 he went out on his own and took over the calico printing company in Manchester.
Manchester was the worlds first great industrial city. It was viewed as the metropolis of the future. Alexis de Tocqueville best explained the paradox of Manchester: From this foul drain the greatest stream of human industry flows out to fertilize the whole world. From this filthy sewer pure gold flows. Here humanity attains its most complete development and its most brutish; here civilization works its miracles, and civilized man is turned back almost into a savage.2
In Manchester Cobden had his first lesson as to what free trade meant. As he assumed ownership of the company, the protective tariff on calicos was repealed, making it possible to export them competitively. This opened up vast new markets that could not exist before, allowing Cobden to develop a new kind of international selling strategy. Cobden introduced a new mode of business. The custom of the calico trade at that period was to print a few designs, and watch cautiously and carefully those which were most acceptable to the public, when larger quantities of those which seemed to be preferred would be printed off and offered to the retail dealer. Cobden and his partners did not follow the cautious and slow policy of their predecessors, but fixing themselves upon the best designs, they had those printed off at once and pushed the sale energetically throughout the country. Those pieces which failed to take in the home market were at once shipped to other countries and the consequence was that the associated firms became very prosperous.3
Yet, at the height of his achievements, Cobdens interest in calico waned. He was eager to pursue other courses. By 1835 he wrote his first political pamphlets. One, called Russia (describing the threat of Russia against the decaying Turkish Empire), contained the core of this mature thought: It is labor improvements and discoveries that confer the greatest strength upon a people. By these alone and not by the sword of the conqueror, can nations in modern and all future times hope to rise to power and grandeur.4
Cobden wrote that Englands rulers inhibited discovery and improvements by wasting millions on the military. His favorite target was Britains obsession with the doctrine of the balance of power. He saw it as a source of conflict, not stability. Empires have arisen unbidden by us; others have departed despite our utmost efforts to preserve them.5
Cobdens ideas were not idealistic dreams. The United States industrial strength had revolutionized the world economy and political equilibrium. Cobden: The new world is destined to become the arbiter of the commercial policy of the old.6 Already the need to trade with America had compelled Britain to abandon many regulations governing colonial commerce.
Since free trade and military non-intervention were the same to Cobden, he pleaded for Britain to abandon the past and repeal protectionism. This would make Britain turn moralist, in the end, in selfdefense.7
Manchester Incorporation: Prelude to Repeal
Cobdens pamphlets attracted the attention of the editor of the Manchester Times, Archibald Prentice, who asked him to speak on free trade issues. This led to Cobdens being elected to the Manchester Chamber of Commerce. Here he met two men who would influence his thinking and direction: John Benjamin Corn Law Smith and John Bright. Smiths nickname was due to his years of singlehandedly fighting for Corn Law repeal, long before it became a major topic. It was Smith who converted Cobden to total repeal, not just incremental reductions. John Bright became Cobdens chief lieutenant in the long war for repeal. Brights speaking tours around the country were a great factor in victory.
Cobden used the Chamber of Commerce as a vehicle for focusing public issues. The first political problem he tackled was the incorporation of Manchester. Like many of Englands new industrial cities, Manchester had no borough (an urban political administrative area) charter. Its government was manorial, with the power of a small town, instead of one of Englands largest urban centers.
In 1837 Cobden led the battle for a charter. One factor in winning was that he fought for it as if it were a national issue. His pamphlet, Incorporate Your Borough, portrayed the struggle as one of democracy versus privilege, the rights of the productive classes against the rapacious aristocracy. He showed that the nobilitys gerrymandering of counties forced the middle and working classes to be their vassals.
Incorporation required a petition of taxpayers. There was powerful opposition from the upper class Tories. To counter this, Cobden focused on the shopocracy, the smaller merchants and manufacturers, for petition signatures. Then, using electoral registers, the Incorporationists sent a circular to all parliamentary electors who supported reform causes, to aid them by filling seats at public meetings. They did, and incorporation passed despite the fact that the Tories had three times as many signatures. Cobden made a name-by-name check of the opposition petition and found that 70 percent were invalid. With incorporation, Cobden was elected to his first public offices: borough councilor and alderman.8
The Manchester League: Fighting for Free Trade
Cobden now set his sights on an ambitious national goal that had previously proved impossible to attain: repeal of the Corn Laws. In 1838 the Manchester Anti-Com Law Association (later, the Manchester League) was created. Cobden saw repeal as the greatest single battle of his time. It would unite workers, farmers, and commercial interests against privilege to radically alter the political power structure of the country.
The Leagues initial goal was to educate the public. Lecturers went all around England, giving free trade conferences. At this stage, political pressure did not seem necessary. But the League did have an ally in Parliament: Charles Villiers. For years he had unsuccessfully tried to initiate a Corn Law repeat debate in the House of Commons, which was dominated by big landlords. However, Cobden knew that Villiers efforts helped identify supporters at the national level. This would influence the Leagues strategy in the provinces.
Within the first year Cobden realized that he had underestimated the Protectionists strength. In rural areas, League meetings were disrupted by physical violence. The farmers erroneously believed that free trade would bring unemployment and depression. The Chartists, representing the urban workers, were hostile for the same reason. Cobden hoped that the Leagues message would convince both groups that repeat would open up new markets which would raise all wages. It required years of educating for these truths finally to be perceived.
This generated a strategic change: the lectures were now combined with petition drives for Parliament. Thus began overt political activism. By 1840 the Manchester League transformed itself, creating in every borough an anti-Corn Law party, or at least an effort to prevent the return of any candidate at the next election, whatever his political party may be, who supports ... the landowners bread tax.9 This meant a more aggressive League, less compromising, less fearful of making enemies.
In 1841, a major economic depression occurred. Suddenly Prime Minister Robert Peel resorted to the free trade idea of lower tariffs to stimulate the economy. This made the Corn Laws nationally significant and gave greater credibility to the League.
By now the League had several members in Parliament, including Cobden. But he was a reluctant member. He did not want to be a party man, loyal and compromising. He needed to be free to harass the government.
Cobdens speeches in Parliament were not influential and this dampened League members enthusiasm. Support dropped sharply. In all mass movements, zeal is critical. There is a constant need to exceed earlier achievements or risk dissolution. So Cobden created make-work projects like conferences and fund-raisers to keep the fervor at high pitch.
By 1843, paradoxically, economic recovery made the League acceptable to the one group most antagonistic to repeal: the aristocratic landowners. When times had been bad, high prices and high subsidies compensated for the poor yields. But now, prices kept failing with increased abundance and the Tories saw that the Corn Laws did not shore up their incomes.
Cobdens speeches became more moderate. Instead of attacking the Corn Laws, he attacked the greater evils behind them: the economic woes to workingmen and farmers. The new accent was on distress, not repeal. Now he no longer seemed menacing to the Tories. Gone were the threats of the collapse of society because of high food prices. No longer did he say that the Corn Laws benefited only the rich. He appealed to the landlords themselves, showing them that protective tariffs deterred them from investing to improve their crops, thus hindering their prosperity.
This wider view drew many leading Tories to the repeal side and was responsible for Robert Peel receiving a League delegation after repeatedly turning them down.
This was followed by a new League political plan. All the boroughs were classified as either safe, doubtful, or hopeless. Voter registration focused on the hopeless districts. Teams of lecturers and voter canvassers fanned out and recruited thousands of new members. Cobdens overall objective was staggering: to reach every voter with League material through the canvassers. The sheer scale of it produced more enthusiasm, more fund-raisers, more activities, but it failed and did not destroy the Protectionists. Cobden had the courage to admit he was wrong and turned around completely in mid-campaign, refocusing on the winnable boroughs.
Cobden targeted 160 boroughs as winnable. The 1845 national election showed substantial gains in 112. This still wasnt sufficient to win a Parliamentary vote. League members were now thoroughly demoralized. Their tremendous work seemed futile. Then Cobden discovered a loophole in the election law, enabling the League to attack from an entirely different direction. This proved to be the key to victory.
Previously Cobden had conceded the counties (the rural political districts). To win them he would have to create a vast new electorate. This seemed impossible because of the large property qualification required. Or so he thought. But a little-known law made it possible to vote in a county election if one owned a forty-shilling freehold, a small piece of property that almost anyone could afford. By promoting forty-shilling freeholds as a great real estate investment, the number of free-trade voters was greatly expanded. Immediately the Tories retreated. They acknowledged that protectionism hindered agricultural modernization and conceded that subsidies did not stabilize corn prices.
Seeing that his opponents were caving in, Cobden once again switched the mode of attack: de-emphasizing public education to put more pressure on Parliament. This forced Prime Minister Peel over to the League side, provoking a governmental crisis. He was forced to resign and his government collapsed. Repeal now seemed within reach. But the chaos compelled a Parliamentary re-organization, reflecting the revolutionary change in the balance of power that repeal represented, shifting away from the aristocrats toward the urban middle class. It appeared that the Protectionists had formed a last-ditch coalition to block repeal just when it seemed assured. League members held their breath. Repeal passed Parliament and became law.10
The Consequences of Repeal
Following repeal, Richard Cobden was physically, mentally, and financially drained. He considered retiring permanently from politics. For the five years prior to repeal he saw very little of his wife and children. My only boy is five years old ... he did not positively know me as his father, so incessantly was I upon the tramp.11 Yet Cobden felt the necessity to go on. He saw repeal as a beginning, not an end. More than prosperity, it would bring world peace. He spent the next fourteen months on a missionary tour of Europe, promoting the social benefits of trade without barriers.
He wrote: Warriors and despots are generally bad economists and they instinctively carry their ideas of force and violence into the civil politics of their governments. Free trade is a principle which recognizes the paramount importance of individual action.12
Several years later his evangelism led to the second great triumph of his political career, the Anglo-French Commercial Treaty of 1860. France was still a protectionist country, but Cobdens tour had converted important Frenchmen into freetraders. They had influenced Napoleon III. One such person was Michel Chevalier, a political economist.
For centuries England and France had been military antagonists, but in the Crimean War of 1854-55 they were allies. Through free trade there was a unique opportunity to strengthen the bonds for permanent peace.
Initially there were several secret meetings in London among Chevalier, Cobden, and Gladstone, the Chancellor of the Exchequer. Then Cobden, with no official status, quietly left for Paris. He believed then, as always, that free trade would undo the national animosities kept alive by the professional diplomats and the military. I would not step across the street just now to increase our trade, for the mere sake of commercial gain .... But to improve moral and political relations of France and England, by bringing them into greater intercourse and increased dependence, I would walk barefoot from Calais to Paris.13
Napoleon realized that he had to convince his own government about the benefits of free trade. He asked Cobden how to go about it. Cobden replied, I told him, I would act precisely as I did in England, by dealing first with one article which was the keystone of the whole system. In England, that article was corn, in France, it was iron; that I should totally abolish and at once the duty on pig iron, and leave only a small revenue duty, if any, on bars ... this would render it much easier to deal with all the other industries, whose general complaint is that they cant compete with England owing to the high price of iron and coal.14
When the negotiations reached their critical phase, Cobden thought he would be replaced by professional diplomats. Instead he was given plenipotentiary powers and continued on his own. The agreement was signed in January 1860.
Cobden died in April 1865. He was sixty years old. His legacy is enormous and remains so to this day. For eighty-five years free trade reigned as Englands national policy, influencing the commercial principles of every major country in the world. Richard Cobdens idealism and passionate dream can be summed up by his statement: I see in the free trade principle that which will act on the moral world as the principle of gravitation in the universedrawing men together, thrusting aside the antagonisms of race, and creeds and language, and uniting us in the bonds of eternal peace.... I believe the effect will be to change the face of the world, so as to introduce a system of government entirely distinct from that which now prevails. I believe the desire and the motive for large and mighty empires and gigantic armies and great navies will die away .... when man becomes one family, and freely exchanges the fruits of his labor with his brother Man.15
1. Norman Longmate, The Breadstealers: The Fight Against the Corn Laws, 1838-1846 (New York: St. Martins Press, 1984), pp. 3-4.
2. Alexis de Tocqueville, Journeys to England and Ireland, edited by J, P. Mayer (New Haven: Yale University Press, 1958), pp. 107-108.
3. John Mcgilchrist, Richard Cobden, the Apostle of Free Trade (New York: Harper & Brothers, 1865), p. 20.
4. Richard Cobden, Russia, from The Political Writings of Richard Cobden, 4th edition (London: W. Ridgway, 1901), p. 26.
5. Cobden, America, from Political Writings, p. 5.
6. Ibid., p. 21.
7. Ibid., p. 256.
8. Nicholas Edsall, Richard Cobden, Independent Radical (Cambridge: Harvard University Press, 1986), pp. 51-59.
9. Ibid., p. 85.
10. Ibid., pp. 53-153.
11. Ibid., p. 174.
12. Ibid., p. 186.
13. Ibid., p. 333.
14. Ibid., p. 334.
15. Richard Cobden, Speeches on Public Policy, By Richard Cobden, M.P., edited by John Bright and J. E. Thorold Rogers (London: Macmillan & Co., 1870), pp. 225-226.
|John Chodes is a writer in New York City.|
Reprinted with permission from Ideas on Liberty (March 1993). ? Copyright 1993, Foundation for Economic Education.