I thank Mark Horne, John Ehrett, Philip Pilkington, and Matthew Schmitz for their comments and critiques of my essay “Free Trade, Economic Nationalism, and America’s Future.” Rather than engage in reflection on the detailed specifics of their respective contributions, I would like to relate the question of free trade, trade liberalization, and the nation to an idea which underlies the thinking of some of their contributors to this conversation, but also many economic nationalists: that being the common good.

The “common good” is a phrase much used but often with little precision. But in the context of a given political community, it has traditionally been used to describe the sum total of conditions that enable individuals and communities within a political society like the modern nation-state to exercise the types of free choices that facilitate all-round human flourishing. The economic part of this expression of the common good in the context of a nation concerns the ability of individuals and communities to meet their material needs and wants. This in turn allows people to acquire the resources that they need if they are to participate in the goods – life, beauty, knowledge, marriage and family, work, etc. – that are central to our identity as humans.

From hard experience, we know that neither centrally planned economies nor socialism are optimal or sustainable ways of realizing the economic component of a nation’s common good. We also know that the implications for freedom and rule of law of such economic models are dire.

But there are also considerable problems with what are called “mixed economies.” Broadly speaking, these are economies in which somewhat free markets are heavily buttressed by the state in the form of large government spending, ever-expanding regulation, the on-going use of public debt, and a growing welfare state. Such problems include lack of competitiveness, varying degrees of cronyism, inflation, significant levels of welfare dependency, and a growing gap between government revenue and government expenditures. In such economies, a remarkably high proportion of people advance their economic well-being through political connections. Moreover, incentives are not aligned in the direction of entrepreneurship, hard work, being competitive, and meeting consumer needs and wants.

These are the economic problems that characterize most EU nations today. They are also manifest throughout much of the United States. Contrary to much mythology, Americans do not live in laissez-faire economic arrangements. The United States is very much a mixed economy, and this, I would submit, undermines, and weakens the economic component of the common good of America.

What has this to do with free trade and economic nationalism? Part of the answer is that the opposite of free trade – protectionism and industrial policy – is integral to the operations of a mixed economy and contributes to many of its problems. Tariffs and industrial policy fuel rampant cronyism, raise prices, contribute to the over-regulation of the economy, diminish competitiveness, and help make the government and legislators the dispenser of favors and privileges. They thus help make the economy less of a place in which individuals and communities can flourish under their own volition. They also seriously distract the state from undertaking its indispensable economic roles, whether it is upholding contracts, protecting property rights, maintaining rule of law, and performing essential policing functions. Such responsibilities are by no means unimportant (let alone small) and in fact can only be performed by the state.

Free trade is not enough to address all these problems. Much more is required, ranging from reinvigorating civil society, restraining the relentless growth of government bureaucracies, and diminishing the size of the regulatory state that disincentivizes and distorts entrepreneurship and the establishment of new businesses. Nonetheless, to the extent that trade liberalization helps to counteract these problems, it can be an important part of the path forward for the emergence of economic conditions that help people in a nation to flourish.

Consider, for example, the ways in which greater expanding trade introduces more competition into the economy and thereby subjects businesses to pressures to innovate, shrink costs, and rearrange how they conduct themselves. Likewise, the deepening division of labor driven by trade liberalization creates ongoing efficiencies and effectiveness in the production of goods and services. It also encourages individuals and businesses to explore, find, and refine their comparative advantage, and consistently helps to lower prices for consumers. These disciplines encourage the creation of new products, which businesses hope will generate revenue that covers costs and produces a profit.

Additionally, ever expanding trade helps Americans acquire access to global markets in which they can 1) sell goods and services and 2) buy goods and services at a lower cost. This in turn points to another aspect of free trade that deserves our attention: the manner in which it underscores the interdependence of individuals and nations.

Markets are often seen as citadels of radical individualism. Yet the whole point of markets – domestic and international – is that they reflect the truth that humans by nature “truck and barter” with each other. It is one of the things that distinguish humans from other species. Moreover, unless humans are willing to trade within and across national boundaries, economic life is far less dynamic and productive. That makes the establishment of those conditions that constitute the common good much more difficult.

In a world increasingly marked by nationalist sentiments, freer trade between nations reminds us that it is precisely love of country – or what might be called the virtue of patriotism – which ought to make us wary of embracing economic policies that place high and prohibitive barriers between our economy and those of other nations. Yes, some of the pressures that proceed from free trade are not always easy to navigate. But the material and non-material benefits contribute in visible and invisible ways to the economic dimension of the common good that we would not want to do without.

Samuel Gregg is the Friedrich Hayek Chair in Economics and Economic History at the American Institute for Economic Research, and a Contributing Editor at Law & Liberty. The author of 17 books—including The Commercial Society (2006), Wilhelm Röpke’s Political Economy (Edward Elgar), Becoming Europe (2010), Reason, Faith, and the Struggle for Western Civilization (2019), and most recently, The Next American Economy: Nation, State, and Markets in an Uncertain World (2022), as well as over 700 essays, articles, reviews, and opinion-pieces—he writes regularly on political economy, finance, classical liberalism, American conservatism, Western civilization, and natural law theory. Two of his books have been listed for Conservative Book of the Year and one was short-listed for the 2023 Hayek Prize. He is also an Affiliate Scholar at the Acton Institute. In 2024, he was awarded the prestigious Bradley Prize by The Lynde and Harry Bradley Foundation. He can be followed on Twitter @drsamuelgreg.