Some time ago, I penned a critique of Yoram Hazony’s apprehensions regarding free trade. He argues that while free trade is generally beneficial, it can erode the essential bonds of mutual loyalty among citizens. I countered that the concept of “mutual loyalty” provides an insufficient rationale for favoring domestic over international trade:
Imagine I’m in the market to build a house and need a specific amount of lumber. Walter from Washington state can supply the lumber at a certain price. Conversely, Carl from Canada provides the same quality lumber but at a staggering $35,000 less. Under free trade, I have the liberty to choose Walter over Carl because I prefer buying from an American, or I might opt for Carl to save a considerable sum. Hazony might argue that I have an obligation, rooted in loyalty, to choose Walter over Carl, but the rationale behind this isn’t apparent. After all, Hazony often emphasizes the notion of mutual loyalty, which implies a reciprocal obligation. So, why would I be disloyal to Walter by purchasing from Carl? Why not argue that Walter would be the one failing in loyalty by expecting me to shoulder a greater financial burden? Simply invoking “mutual loyalty” does nothing to clarify this quandary.
Nonetheless, my assertion doesn’t entirely disprove Hazony’s concerns. At best, it leads us to an impasse. As I have articulated elsewhere, we require a mechanism to break this symmetry. For proponents of classical liberalism, individual liberty often serves as this mechanism. However, this approach falls short in addressing Hazony’s argument. He and his ideological peers consider individual liberty to be a valuable asset that must coexist with a range of competing principles essential for national cohesion.
Conservatives, on the other hand, regard individual liberty as a precious good that should be nurtured and safeguarded, but one that exists within a web of competing principles that must be harmonized to sustain the life of the nation.
Thus, for Hazony and his contemporaries, there are broader considerations at play than mere maximization of individual liberty. In discussions like these, progress is unlikely if responses compel one party to accept the validity of another’s worldview while dismissing their own. Simply stating, “We should prefer free trade because it enhances individual liberty!” is question-begging—it presupposes the very point under contention. Hazony, along with other National Conservatives, acknowledges that free trade indeed expands individual liberty; however, their argument suggests that maximizing this liberty can sometimes clash with the mutual loyalty that binds societies, necessitating a trade-off between these competing goods.
In addressing Hazony’s perspective, I see two potential avenues. One is to question whether individual liberty should be the ultimate priority or maximized in every instance. The other is to contend that even within Hazony’s framework, there are compelling reasons to endorse a system that supports—if not encourages—purchasing lumber from Carl instead of Walter. It is this latter point that I will explore here.
If Walter and I wish to engage in a manner that respects both our individual liberties and the bonds of mutual loyalty that connect us, what would emerge as our mutual interest? If we are genuinely motivated by mutual loyalty, we would want the best for one another. Such a desire should extend beyond immediate transactional benefits, aiming instead for long-term mutual well-being. This is reminiscent of the sympathy Adam Smith described and that David Schmidtz elaborated on in his work Living Together:
It is entirely reasonable for an author who initially emphasized benevolence to later inquire how to engage benevolently with trading partners. Why, as a benevolent individual wishing to barter with brewers and bakers, do you appeal to their self-interest? The answer: because you want them to benefit from their interaction with you. Notice that Smith does not assert that bakers are driven solely by self-interest. Instead, he suggests we address their self-interest not to exploit their benevolence but to create a beneficial exchange (WN, Book I, chap. 2). This reflects our psychological approach, not theirs. His insights reveal not the self-love of bakers but what it takes to engage benevolently with them.
In essence, the author of Moral Sentiments prioritizes virtue and benevolence, but in detailing what benevolence means, the author of Wealth of Nations emphasizes a crucial point: a truly benevolent person desires their partners to be better off with them than without them. Addressing others’ self-interest is about giving them their due. This is how true sympathy manifests.
Consequently, Walter and I would strive to consider more than the immediate benefits of our transactions. We would aim to collaborate within a system that ensures mutual long-term benefits—not just for this one exchange but throughout our interactions. This is precisely the advantage a free trade system offers. From a static perspective, it may appear that free trade could disadvantage Walter, as he might need to lower his price significantly or forfeit the sale entirely. However, in the broader scope of free trade, Walter stands to gain far more than he loses. He, too, benefits from a vast array of goods and services at competitive prices.
Consider my specific gains from the lumber transaction under free trade. I gain the lumber, and I also enjoy the luxury of additional goods and services thanks to the money I save. Alternatively, I could invest those savings in a retirement account or a college fund for my children. Choosing Walter means acquiring only the lumber while forfeiting these additional opportunities.
This same principle applies to Walter, affecting all the goods and services he consumes. In a free trade environment, he reaps similar benefits from each of his purchases. The clothing he wears, the food he eats, and the materials he uses for durable goods—all these transactions benefit from free trade in the same way I benefit from the lumber transaction.
But could free trade jeopardize Walter’s job? It’s a possibility. However, it’s vital to note that free trade does not inherently destroy or create jobs; instead, it reshapes the job landscape. As Alan Blinder noted, protectionism often leads not to job preservation but “job swapping.” It safeguards positions in some sectors at the expense of others, transferring jobs away from where American workers have a comparative advantage, ultimately resulting in less productive and lower-paying jobs over time.
Lastly, if Walter genuinely embodies the spirit of mutual loyalty, he must consider the costs imposed on his fellow citizens by seeking protection for his industry. Research consistently shows that the expenses borne by American consumers due to higher prices far outweigh the benefits enjoyed by the protected workers. As quoted from Blinder’s essay, “one study in the early 1990s estimated that U.S. consumers paid $1,285,000 annually for each job in the luggage industry that was preserved by barriers to imports, a sum that greatly exceeded the average earnings of a luggage worker.”
Let’s be generous and assume these luggage workers earn a considerable salary—say, $250,000 annually. Even under this assumption, the costs imposed on their fellow citizens are over five times greater than the benefits they receive. Would I, as someone genuinely motivated by the benevolence Adam Smith eloquently described and committed to mutual loyalty, support a policy that burdens my fellow citizens at such an exorbitant rate? The answer is a resounding no. Just as “a man of true benevolence wants his partners to be better off with him than without him,” a person guided by mutual loyalty also desires the same for their fellow citizens. If benefiting oneself entails imposing significant costs on others, that’s not honoring mutual loyalty; it’s exploiting them for personal gain. Truly valuing mutual loyalty requires us to reject such behavior.
