If a free country is defined as a place where an individual or private organization is free to engage in voluntary cooperation—including trade—with whoever is willing or able to and on terms accepted by both parties, it follows that “trade war” is a contradiction in terms. Free trade is peaceful trade.
Why is this definition of a free country useful? Why should we see individual action as inseparable from social life? For two sorts of reasons. First, a free society is desirable to the extent that equal liberty, along with the opportunities and general prosperity that follow (as economics demonstrates), are themselves desirable. Second, understanding the consequences of social interaction requires methodological individualism—that is, to start the analysis from individual preferences, incentives, and self-interest. In the context of our topic, it is easy to see the importance of individual motivations. Suppose that “France” and “Canada” stop trading. Only methodological individualism can explain the smuggling that will result.
There are justifiable exceptions to free trade when the very possibility of free trade is compromised—killer-for-hire contracts, for example, or the trade or ownership of slaves. Other restrictions can be argued for (see notably James Buchanan’s The Limits of Liberty or, co-authored with Gordon Tullock, The Calculus of Consent). That a state may restrict its own subjects’ liberty because another state ruler does the same, constitutes, at least in peacetime, an invalid justification.
All that is different if one believes that “countries” trade. A moment of reflection suggests that they do not. How can “France” trade with “Canada”? Neither has a brain, arms, or legs, with which it can choose to trade and approach the other with arms full of goodies to exchange. Nobody in his right mind, even with only basic information, can believe that this happens in reality. What most people (alas) intuitively believe is that the political authority in France trades with the political authority in Canada; or, in practice, that the political authority in a country decides with whom and on what conditions its subjects and their private associations may trade; and that there is no other society possible or desirable.
Outside of a free society, a trade war is just as possible as an all-out war. Often, if not nearly always in the history of mankind, the two sorts of war went hand-in-hand. The rulers of France and Spain could engage in war because it was in their interests to do so. Whether the rulers are elected or not matters little; what does matter is the scope and extent of their power. But note how methodological individualism is still essential to explain the rulers’ actions—to which extent, for example, they respect the international-law principle pacta sunt servanda.
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“Trade War” by ChatGPT, with some guidance
READER COMMENTS
David Seltzer
Jul 16 2025 at 10:45am
Pierre: I often hear sports commenters say, ” the Chicago Bears are going to war with the Detroit Lions.” Or the “Dallas Cowboys have offensive weapons.” Those comments demonstrate, to this writer, a cliched misuse of those terms. In war, people die! Not on NFL turfs. Weapons? An AH-64 Apache helicopter is a weapon of enormous killing power. Not some wide receiver catching a pass. The Bears, Lions and Cowboys, to your point, do not have brains, arms or legs. The individual players agreeing to compete with each other do.
Craig
Jul 16 2025 at 10:54am
To be fair football isn’t war, but there are some overtly violent elements to it. George Carlin did a bit once about football jargon that made fun of its warlike jargon as compared to the more pastoral terms used in baseball.
David Seltzer
Jul 16 2025 at 11:01am
Craig, boxing, Krav Maga, and BJJ also possess overtly violent elements. But… those fighters agree to engage in those contact sports. Competing in those sports, my nose has been broken several times along with fractured ribs and a partially detached retina. I assumed the risks of injury, but at no time did I think I was in a war. BTW. Carlin was one of my favorites. Especially when he ridiculed religion.
Pierre Lemieux
Jul 16 2025 at 3:31pm
David: You write:
This is true, but with a qualification. Clubs, associations, and corporations are organizations, created with a special purpose and with specific goals. Members can leave freely and shareholders sell their shares at will. What makes society different and not at all “leggy,” if I may say, is that it is the context into which individuals and their organizations interact. (Hayek correctly emphasizes this distinction, between an organization and a spontaneous order.)
David Seltzer
Jul 16 2025 at 7:38pm
Pierre, thank you for the pointing out the crucial distinction between an organization and spontaneous order. I just read Hayek’s comments. If I understand it; Orgs are consciously designed arrangements of individuals by a planner to achieve a goal. Eleven players trying to score a touchdown. Eleven players trying to prevent them from scoring. Spontaneous order by contrast is not designed or created, instead emerges from actions of individuals pursuing their own goals. Hayek’s example, language. Interesting to note…different languages. Not one planned method of verbal communication. As an aside, I recall Barack Obama in a State of the Union address, saying he has a “Blueprint for an America built to last.” I suspect he was sincere but unaware of the myriad failures of central planners.
Craig
Jul 16 2025 at 10:52am
“That a state may restrict its own subjects’ liberty because another state ruler does the same, constitutes, at least in peacetime, an invalid justification.”
But the problem is that a state, to fund itself, must necessarily restrict its own subjects’ liberty by definition, the second it collects its first involuntary penny in taxation. That’s an inescapable feature of taxation. Then the question at that point is ‘how’? Not if, but ‘how’?
Part of the reason for federal government is that combined, the former colonies, would be able to better collectively bargain for access to US market. That power is specifically delegated to the federal government and of course to Congress and not unilateral executive action, but that’s a different can of worms.
Pierre Lemieux
Jul 16 2025 at 11:54am
Craig: All cans of worms are similar.
Mactoul
Jul 17 2025 at 1:09am
Edward Luttwak, in Coup d’État: A Practical Handbook. observes on the sad fate of newly independent African countries that coups happened because these countries lacked a genuine political community, unlike the Western countries.
Question is how is this concept of political community translatable into methodological individualist terms. Can it be done?
Pierre Lemieux
Jul 17 2025 at 1:49pm
Mactoul: To try to answer your last question, we must first remember that methodological individualism is, as the adjective indicates, a methodology. If “political community” does not mean “submission to (majoritarian or not) violence,” we could interpret Buchanan’s constitutional political economy as a way to explain how rational and non-sacrificial individuals would form a “political community” (although he avoided this loaded expression). De Jasay, I would say, believed that “political community” is a contradiction in terms, and that the notion of community as voluntary cooperation between a group of individuals tied by evolved conventions is only realizable in anarchy.
Mactoul
Jul 18 2025 at 12:09am
A lot of interesting questions, it seems, are not admissible to raise in Jasayian anarchist framework. When all governments are illegitimate, how does Washington as president differ from Stalin, the general secretary?
You cannot even complain of Trump violating constitution when the constitution itself lacks legitimacy. Indeed, even the concept of legitimacy lacks meaning in anarchy.