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4: “We are rivals…”

November 27, 2012

4: “We are rivals…”

The Federalist 4: The Same Subject Continued. First published November 7, 1787. Author John Jay. Please see Introducing the American Bible for an introduction to this project.

Jay (once again this week’s Publius[1]) clearly expects a war. This is perhaps not an unnatural expectation. Jay himself had only just negotiated an end to the Revolutionary War four years before. While Britain had formally given up all its claims to American territory, many Americans suspected Britain’s Canadian holdings would be the thin end of the wedge—and indeed, American and Britain would war again just 25 years later.

All around him, Jay sees predatory nations eager for a piece of a still-new continent. Britain, France, Spain: All would devour a young United States if given the chance. Indeed, Jay argues this is why we must have a United States. Thirteen sovereign nations—or “three or four independent bodies”, a possibility he mentions with unexpected frequency—could too easily be turned against each other.

In fact, as Jay himself notes, they would not even need to betray one another. A foreign power might simply buy New York’s neutrality as it conquered Rhode Island. And even if they all fought together, problems of command and coordination would plague the effort. One needs only look to medieval history to see the benefits of a unified command. Countless medieval battles were lost, not by inferior arms, but by competing egos and interests. There is little reason to think Americans would have risen above such pettiness.

Yet while Jay’s arguments are compelling, it is fascinating how unfamiliar his spirit is. Jay is so untrusting of other nations. Indeed, Federalist 4 is a testament to what a lucky age we live in. Jay writes that American states might betray their neighbors, for “although such conduct would not be wise, it would nevertheless be natural”. It is impossible to imagine America going to war with itself today. It is impossible, too, to imagine it fighting Mexico or Canada. Nor, for that matter, is it possible to imagine the powers Jay so distrusts—England, France, and Spain—warring on their neighbors. We live in a more peaceful era.

We also live in a richer one. In Jay’s time, it was generally assumed that trade had a “winner” and “loser”. “Winning” countries exported; “losers” imported. Jay himself makes a similar assumption, writing of trade with Asia that “our carrying trade cannot increase without in some degree diminishing theirs”.

Jay wrote 30 years before David Ricardo revolutionized economics with his proofs that trade actually had two winners, and no true losers:

The very best distribution of the capital of the whole world, … is never so well regulated, as when every commodity is freely allowed to settle at its natural price, unfettered by artificial restraints.[2]

Ricardo laid the foundation for the economic revolution that underlies our modern, rich, and globalized world. Hans Rosling offers a quick explanation of the benefits 200 years of economic liberalization have brought:

Nor is Rosling alone is his optimism. As Planet Money has pointed out, the average American today is richer than than any person who lived in Jay’s time. Nor are the benefits confined to America: China, Russia, even African and Middle Eastern countries are much better off. While much of this is due to technology, it is also due to ever-growing trade: Trade has allowed us to specialize, and to benefit from each others’ expertise.

So if the Founders brought us one revolution to be thankful for, we ought also to remember the one that followed. The capitalist revolution of the 19th century, when married to the democratic revolution ignited in 1776, have brought us greater prosperity and peace than even America’s founders could have foresaw.

Even 100 years ago, the world’s richest countries were still full of poverty, and inclined to idiot wars. In a time when faith in capital and liberty has been shaken by crisis, let’s be careful not to sabotage this lucky world we live in: A world where dozens of countries can no longer imagine either war or poverty.

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  1. Though we’ll be done with Jay entirely in two weeks’ time. It’s Madison and (mostly) Hamilton from here out.  ↩

  2. See this section of On the Principles of Political Economy and Taxation  ↩


From → The Papers

One Comment
  1. Amen! And let’s not forget about those countries still mired at the bottom either.

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