The American Revolution Was a Fight for Free Trade

Amid the ongoing revival of trade protectionism on the political right, a number of commentators associated with the “National Conservative” movement have attempted to enlist the founding fathers to the cause of tariffs. According to this narrative, America’s founders—led by Alexander Hamilton—charted a political course of economic nationalism to escape a state of subservience to the British Empire and, in so doing, adopted a suite of protective tariffs and industrial subsidies known as the “American System.” They borrow this moniker from Henry Clay, an arch-protectionist Senator from Kentucky who introduced it in a speech in 1824.

Today’s protectionists then contrast the “American System” with the “British System” of free trade, as symbolized by the repeal of the protective Corn Laws in 1846. As their tale goes, the United States remained true to this Hamiltonian vision until the early 20th century, when it adopted the British approach of free trade. National Conservatives view these developments as a betrayal of the “American System” of the founding and call for a resumption of 19th-century tariffs, most recently signified by President Trump’s embrace and rehabilitation of his largely-forgotten predecessor William McKinley.

The more extreme versions of this narrative even venture into conspiratorial directions. An example may be seen in the writings of Oren Cass of American Compass, who contends that Americans of yesteryear “recognized the case for free trade emanating from Britain as self-serving ideology, not a universal principle.” Free trade, Cass continues, sought to coax Britain’s “colonies and other nations to supply it with raw materials in return for which it would deliver finished goods, keeping the technological progress for itself.” His answer is to return to the “American tradition from the founding,” which “was one of aggressive protectionism and support for domestic industry.”

I’ve dealt with the arguments by Cass and other National Conservatives before. Their claims about the British empire’s alleged free trade conspiracy are a hoary old tale with direct antecedents in the nativist politics of the antebellum United States and the Lyndon LaRouche political cult of the late 20th century. But their link to the founding through Alexander Hamilton has continued to resonate with modern audiences—particularly as his stock rose from the popular Broadway musical.

Hamilton was indeed a protectionist, nor would any reputable historian contest as much. What the National Conservatives don’t tell you though is that he stood practically alone on this issue among his peers, and saw his own tariff designs from the 1791 Report on Manufactures enacted in a watered-down form that also stripped them of an accompanying industrial “bounty” or subsidy system.

Even more telling, the American Revolution itself was fought in part over the colonists’ desire for free trade. The Declaration of Independence contains a direct clue to this often-overlooked cause in its list of complaints against King George, citing him “For cutting off our Trade with all parts of the world.” This passage, in turn, referred to over a hundred years’ worth of laws and regulatory measures by which the British crown coerced its colonies into preferential trade arrangements with London. The underlying grievance dated back to the Navigation Acts of the 1660s—a series of measures that restricted the colonies from engaging in the export trade, except by way of British-owned ships that first made port in England. Additional measures required the colonies to source their manufactures through Britain, effectively cutting off trade with other countries and their colonies.

During the political turmoil of the 1760s, Parliament ramped up enforcement of these antiquated statutes and overlayered them with additional measures intended to tax the colonists by regulating the import and export trade from North America. It’s not by coincidence that the Boston Tea Party involved the dumping of British East India Company cargo into the harbor. This early tax revolt targeted ships that enjoyed a preferential trading arrangement with the crown, and was met with even stricter punitive measures that shuttered Boston’s port in retaliation.

In effect, the British government’s protectionism, embodied in the economic philosophy of mercantilism, provided a major impetus for the American Revolution. One need not take my word for it though. Thomas Jefferson laid out the revolutionary case for free trade in a 1774 essay that became the basis of the Declaration of Independence’s list of grievances, albeit in truncated form. As Jefferson wrote:

“That the exercise of a free trade with all parts of the world, possessed by the American colonists, as of natural right, and which no law of their own had taken away or abridged, was next the object of unjust encroachment.”

He then laid out the century-long history of trade restrictions that the crown and parliament had imposed on the colonies:

Some of the colonies having thought proper to continue the administration of their government in the name and under the authority of his majesty King Charles the First, whom, notwithstanding his late deposition by the commonwealth of England, they continued in the sovereignty of their state; the parliament for the commonwealth took the same in high offence, and assumed upon themselves the power of prohibiting their trade with all other parts of the world, except the island of Great Britain. This arbitrary act, however, they soon recalled, and by solemn treaty, entered into on the 12th day of March, 1651, between the said commonwealth by their commissioners, and the colony of Virginia by their house of burgesses, it was expressly stipulated, by the 8th article of the said treaty, that they should have ‘free trade as the people of England do enjoy to all places and with all nations, according to the laws of that commonwealth.’ But that, upon the restoration of his majesty King Charles the Second, their rights of free commerce fell once more a victim to arbitrary power; and by several acts of his reign, as well as of some of his successors, the trade of the colonies was laid under such restrictions, as show what hopes they might form from the justice of a British parliament, were its uncontrouled [sic] power admitted over these states.

Jefferson explained how these measures used a tangled web of taxes and trade regulations to enforce a protectionist regime over the colonies. “Besides the duties they impose on our articles of export and import, they prohibit our going to any markets northward of Cape Finesterre, in the kingdom of Spain, for the sale of commodities which Great Britain will not take from us.” The Navigation Acts and their successors were particularly onerous on American agriculture such as tobacco, which they “prohibit us from carrying in quest of other purchasers the surplus of our tobaccoes [sic] remaining after the consumption of Great Britain is supplied.” Other measures prevented Americans from sourcing manufactured goods outside of the British Empire, effectively forcing them to pay inflated prices due to the decrees of Parliament.

Jefferson concluded his attack on mercantilist protectionism with a stunning declaration. The Navigation Acts and their successors, he contended, were imposed without the consent of the North American colonies and were therefore nullified: “The true ground on which we declare these acts void is, that the British parliament has no right to exercise authority over us.”

Throughout his lengthy career in government, Jefferson offered a free trade foil to Hamilton’s attempts to recreate the mercantilist system in the nascent United States. He did not always abide by these principles in exacting consistency and oversaw a disastrous embargo measure against Britain during his own presidency, albeit for military rather than protective reasons. Yet free trade remained one of his philosophical anchors until his dying day.

In one of Jefferson’s last political acts before he died in 1826, Jefferson came out of retirement to draft another resolution for his representative in the Virginia General Assembly. The document targeted another piece of legislation, “which we have declared to be usurpations, and against which, in point of right, we do protest as null and void, and never to be quoted as precedents of right.” As with Britain’s Navigation Acts a half-century prior, the object of his ire was Senator Clay’s protectionist “American System” of industrial subsidies and tariffs.