The phrase Pax Economica comes from Henri Lambert in 1913. Lambert was commenting favorably on a statement by one of the heroes of Palen's book, Richard Cobden. Pax refers to a period of peace or stability that is generally dependent on a dominant military. Thus, Lambert referred to autocratic Pax Germanica, Pax Britannica, and Pax Americana versus the nonauthoritarian, democratic Pax Economica that is maintained by free trade (51). Palen's use of the phrase as the title for his book is spot-on, as this choice encapsulates the central theme perfectly. The peace-loving, anticolonial, pro-women's-rights, free-trade-pursuing political left is pitted against the war-mongering, antidemocratic, and protectionist right.
The theoretical underpinnings of this fight are found in the writings of protectionist Friedrich List versus the free trader Richard Cobden. List and the American System of infant-industry protection and imperial expansionism led the way, through France, Germany, and Asia, to eventually include the evils of high tariffs, war, and racism. We also find in chapter 2 an interesting aside where the “US pan-Africanist intellectual W.E.B. Du Bois” adapted List and the American System in advocating for “Black economic self-sufficiency” (39). An interesting part of the storyline in the book is how early “radicals” influenced subsequent thinkers and advocates, for example today's Pan-Africanist ideas regarding self-sufficiency and development (197). Cobden is given the bulk of the credit for developing the connection between free trade, general prosperity, and peace. The term used in the book for this connection is cosmopolitanism. While this idea is briefly traced back through Enlightenment thinkers, the history-of-thought component of the book would have been enriched by more in-depth analysis. For example, perhaps the best rendition of this idea comes from David Hume in his Of the Jealousy of Trade in which he connects trade between nations with prosperity through specialization based on nature endowment differences, technological innovations, increased competition, and peace. The benefits were so great as to lead him as a “British subject [to] pray for the flourishing commerce of Germany, Spain, Italy, and even France. . . . [All nations] would flourish more, did their sovereigns and ministers adopt such enlarged and benevolent sentiments towards each other” (Hume 1985: 331). With this minor criticism aside, the setup and storytelling of the development of both sides of the free trade debates are learned and well worth reading. The discussion of Henry George's contributions is also of interest.
While Cobden was a strong anti-corn-law free trader and pacifist, he was not a socialist. Much of the rest of the book, starting in chapter 3, focuses on socialists. A Marx-Manchester tradition was formed in which the socialist left demonstrated an increasing influence up to the First World War, leading to the Second International (1889–1916) and its free trade–free immigration and peace platform, the Socialist Peace Conference (1916), and the First American Conference for Democracy and Peace in 1917. This push was derailed by the war but was rekindled after World War II with expanded emphasis on the need to hold down nationalism via a supranational form of government, eventually resulting in the United Nations.
The influence of this Marx-Manchester tradition is further developed in chapters 4 and 5 on feminism and leftist Christian organizations respectively. To the free trade, peace, pro-immigrant, socialist position feminism added pro–women's suffrage, an increased rhetorical concern for children, and an overall “grassroots struggle to overthrow the illiberal imperial order” (126). The leftist Christians, in turn, added God's will to the fight by arguing that God intended all peoples to work and trade together in peaceful harmony. Free trade was seen as “the international common law of the Almighty” (161). Issues of internal consistency in the thinking of the socialist left are not examined. Free trade and socialism seem to be an unlikely pair. Free trade was seen as the key in the promotion of peace, international stability, and non-surplus-extracting economic relations between the people of all nations. This leads to the question of why free trade promotes peace internationally but creates class turmoil domestically. One answer is that free trade did not mean free trade of all goods and services. Trade in capital, for example, was restricted. While monopoly and monopsony power of firms was seen as being controlled by free trade, true free trade required monopoly control of capital by a central authority. Once again Marx comes to the rescue in maintaining theoretical consistency. For him free trade was seen not as an end, but as a means. Free trade would increase the international fraternization between workers against the capitalist class, leading more quickly to capitalism's demise (96).
What also goes uninvestigated is how socialism would eliminate the incentives for colonialization and imperialism. As seen by the actions of Lenin and Stalin in the development of the Soviet Union, these incentives changed under socialism, but they were not eliminated. During the Tenth Congress of the Revolutionary Communist Party, Lenin called for a report to be written on the “National Question.” The report, led by Stalin, stated that “history tells us that the only way to . . . establish a regime of fraternal co-operation between the laboring masses of the oppressed and non-oppressed nations, is to abolish capitalism and establish the Soviet system” (Stalin 1953: 38). Similar sentiments were also stated as reasons for the later development of the trading bloc known as Comecon. Comecon was seen as a Soviet control device against other Comecon members (Pelzman 1977). This difference in philosophy between the Soviets and more liberal socialists spilled over in the late 1920s during the International Co-Operative Alliance. The liberals believed peaceful reforms to the capitalist system could be made through the League of Nations, while the Soviets, consistent with Marx, “saw co-operativism as a path towards socialist revolution” (113).
The book's ending chapter is titled “Pax Economica vs. Pax Americana: The Left-Wing Free-Trade Fight against Neocolonialism, Neomercantilism, and Neoliberalism, 1945–2022.” As the title suggests, this is meant as a culmination of the good-versus-evil story depicted throughout the text in which “the free-trade-and-peace movement adapted its grassroots strategies in response to the increasingly militant and exploitive post-1945 geopolitical landscape” (191). This landscape was shaped almost entirely by the Cold War between the Soviet Union and Western countries. While the Soviets shared some of the blame, the narrative points to the United States and the Western powers as the prime initiators in the fight. The US government wore “paranoid anti-communist blinkers” (193), the GOP practiced a “paranoid style of politics” (194), and the West in general experienced “paranoia” (195). The paranoia of the GOP is seen as directly responsible for US involvement in Korea and Vietnam. What is not mentioned, however, is that US involvement in Korea, as part of a UN-led mission, was initiated under President Truman, and the United States entered the Vietnam War under President Kennedy and greatly expanded the war under Johnson. The US blockade of Cuba is the “poster child of the Cold War's coercive implementation of economic nationalism” (191) and neomercantilism, while Che Guevara is portrayed as a free-trade-loving pacifist (213).
A strength of this final chapter is found in its subtheme. Here, we see a partial resolution of the logical inconsistency discussed above between socialism and a free trade ideology. During this postwar period there is a move on the left away from discussions of free trade and toward more managed fair trade, which formally recognized unconstrained markets as inherently exploitive of labor (205). This proposition was theoretically developed in Arghiri Emmanuel's Marxist unequal exchange theory of trade, as well as Samir Amin's perhaps more influential work that created a center-periphery theory of uneven development that synthesized previous Marxist theories into a coherent whole. The Left's move away from a full-throated endorsement of free trade was also seen through its main international organization, the New International Economic Order, which began emphasizing a more List-Marx orientation for developing countries that included protectionism as a tool for development as well as “public ownership of the means of production” (215). Throughout this postwar period, we see the Left essentially coming home to a much more measured view of trade as a tool to be actively managed due to its inherent tendencies toward exploitation. Conversely, the theories of “Hayek and Friedman . . . [paved] the way for a post–Cold War neoliberal order” (215) that “showed little sympathy for Third World demands” (206). Again, only the Left cares about the world's poor. What is not stated is the economic result of this uncaring, antidemocratic move toward neoliberalism. This period, from 1970 to 2020, saw the greatest decline in abject poverty in the history of the world, falling from about 50 percent in 1970 to about 8.1 percent in 2020. It seems that the original free trade leftists had it right all along: Opening to international markets is a useful tool in the fight against poverty.
