Matt Ridley gives a potted history of the rise of free trade in the nineteenth century, bringing great benefit to workers and consumers:
… the point about free trade is and always should be that it is good for consumers. “Consumption is the sole end and purpose of all production”, said Adam Smith. The genius of the Corn Law radicals was to turn the debate upside down and give the consumers a voice. Between 1660 and 1846, the British government passed 127 Corn Laws, imposing tariffs as well as rules about the storage, sale, import, export and quality of grain and bread. The justification was much like today’s opposition to TTIP: maintaining our supposedly high standards against foreign, cheapskate corner-cutters.
In 1815, Parliament banned the import of all grain if the price fell below 80 shillings a quarter — to protect landowners. Rioters vandalised the house of Lord Castlereagh and other supporters. David Ricardo wrote a pamphlet against the laws, but in vain. It was not until the 1840s that the railways and the penny post enabled Richard Cobden and John Bright to stir up a successful mass campaign against the laws on behalf of the working class’s right to buy cheap bread from abroad if they wished.
Cobden did not stop there. Elected to parliament but refusing office and honours, this pacifist radical was as responsible as anybody for accelerating global economic growth. He persuaded Gladstone to abolish many tariffs unilaterally, and personally negotiated the first international free trade treaty in 1860, the so-called Cobden-Chevalier treaty with France, which established the unconditional “most-favoured nation” principle, leading to the dismantling of tariffs all over Europe. “Peace will come to earth when the people have more to do with each other and governments less,” he said.
Only when Bismarck began rebuilding tariffs in 1879 did the tide begin to turn, and competitive protectionism slowly throttled free trade, eventually contributing to half a century of war. Britain held out longest, enacting a general tariff only in 1932 under Neville Chamberlain as chancellor. Trade barriers undoubtedly helped precipitate war: they shut the Japanese out of resource markets that they then decided to seize by force instead, while Germany’s Lebensraum argument would have carried less force in a free-trading world.
The argument for free trade is paradoxical and much misunderstood. Free trade benefits consumers because it is the scourge of expensive or monopolistic national suppliers. It benefits both sides: yet it works unilaterally. Your citizens benefit if you let them buy cheap goods from abroad, while foreigners are punished if their government does not reciprocate. This creates more demand for local services and hence more growth and jobs in the importing country.