Adam Smith on how “furious monopolists” will fight to the bitter end to keep their privileges (1776)
Found in The A B C of Finance
In 1776 Adam Smith (1723-1790) was not optimistic about the chances of Britain introducing free trade because of the outspoken opposition and political power of the vested interests. He compared the protected manufacturing interests to “an overgrown standing army” which would focus the “insolent outrage of furious and disappointed monopolists” which no politician would dare cross:
To expect, indeed, that the freedom of trade should ever be entirely restored in Great Britain, is as absurd as to expect that an Oceana or Utopia should ever be established in it. Not only the prejudices of the publick, but what is much more unconquerable, the private interests of many individuals, irresistibly oppose it. Were the officers of the army to oppose with the same zeal and unanimity any reduction in the number of forces, with which master manufacturers set themselves against every law that is likely to increase the number of their rivals in the home market; were the former to animate their soldiers, in the same manner as the latter enflame their workmen, to attack with violence and outrage the proposers of any such regulation; to attempt to reduce the army would be as dangerous as it has now become to attempt to diminish in any respect the monopoly which our manufacturers have obtained against us. This monopoly has so much increased the number of some particular tribes of them, that, like an overgrown standing army, they have become formidable to the government, and upon many occasions intimidate the legislature. The member of parliament who supports every proposal for strengthening this monopoly, is sure to acquire not only the reputation of understanding trade, but great popularity and influence with an order of men whose numbers and wealth render them of great importance. If he opposes them, on the contrary, and still more if he has authority enough to be able to thwart them, neither the most acknowledged probity, nor the highest rank, nor the greatest publick services can protect him from the most infamous abuse and detraction, from personal insults, nor sometimes from real danger, arising from the insolent outrage of furious and disappointed monopolists.
It is sobering to think about the obstacles which liberal reformers like Adam Smith and William Wilberforce had to face in the late 18th century. For Adam Smith and the free traders they had to overcome the enormous power of the entrenched agricultural and industrial interests if they wished to see Britain introduce a policy of free trade. For William Wilberforce, Thomas Clarkson, and the other opponents of slavery and the slave trade they had to overcome the equally powerful planter and trading interests which benefited from the use of slaves in the colonies. After a decades long battle the latter achieved success first with the abolition of the slave trade in 1808 and the abolition of slavery itself in the English colonies in 1833. It took somewhat longer for the free traders under Richard Cobden to have a similar level of success. It was not until 1846 that Cobden acting in Parliament and the Anti-Corn Law League in the streets, were able to see the ending of the Corn Laws in 1846 and the beginnings of free trade in Britain. In both these cases the “overgrown standing army” of the vested interests were eventually defeated.