Self-determination and the liberal order of free trade must be balanced.
As President Donald Trump is prone to do, he created quite a stir at the G-7 summit with world leaders. He complained loudly about trade relations with other developed nations and took particular exception to comments made by Canadian prime minister Justin Trudeau.
In so doing, Trump is breaking — at least rhetorically — with decades of the American approach to world affairs, according to which leaders promote a harmonious world order, ideally with the United States as the first among equals. But it is not at all clear that this is what people actually want anymore. While polls show that opposition to tariffs is strong, both Trump and Bernie Sanders made waves during the 2016 primaries arguing that the United States has been badly served in its negotiations with foreign nations.
It is easy to get hung up on Trump’s unique approach to diplomacy. But outrage over Trump has been done to death at this point. Similarly, the benefits of the international trade order have been expertly propounded by both Democrats and Republicans in response to Trump’s skepticism.
Instead, I want to focus on why America’s position in the world order has created a tension between key values within the nation’s founding creed. This is a theme of my new book, The Price of Greatness: James Madison, Alexander Hamilton, and the Creation of American Oligarchy. One of the stories from that book — the tense Anglo–American relations of the 1790s — is particularly useful for understanding our current predicament.
In January 1793, French revolutionaries beheaded Louis XVI, an act that would lead inexorably to more than a decade of warfare with Great Britain. This conflict placed the United States in a bind — for while the nation had a treaty of alliance with France (or, at least with pre-revolutionary France), Great Britain was America’s No. 1 trading partner. As the two European powers came to blows, American commerce was bound to be affected one way or another, which would require a response from the new government.
But there was a larger, existential question that confronted Americans: Where did the new nation stand in relation to the world? Was it powerful enough to dictate the terms of international relations, or did it have to acknowledge that bigger forces, beyond its control, were at work? These questions split the body politic in half, reinforcing the political cleavages that existed between, on one hand, the Republicans of James Madison’s and Thomas Jefferson’s stripe and, on the other, the Federalists of Alexander Hamilton’s party.
The Republicans believed that they should drive a hard bargain with the British, who had begun harassing American merchants on the high seas. They reckoned that industrialization and imperialism had robbed Britain of its self-sufficiency — that it did not grow the food necessary to feed its people both at home and in its West Indian colonies. Instead, Britain relied on the United States for food, which meant that America could boldly demand respect from its former colonial masters.
The Federalists, especially Hamilton, saw matters from exactly the opposite perspective. Great Britain, with its diversified economy and fearsome navy, was the preeminent world power and could easily dispense with the United States, even while engaging in a war with France. Moreover, the public treasury depended upon import duties primarily from British goods, which were doing more than simply enabling the government to pay its bills. Hamilton had adroitly used newfound public confidence in the government as the foundation for an elaborate system of public and private finance. So he privately warned President George Washington that a trade war with Britain would “cut credit up by the roots” and ruin the national economy. He suggested instead that Americans approach Britain with “the most conciliatory language” and “the most sincere desire . . . to settle all grounds . . . on an amicable and permanent principle.”
Ultimately, neither side had a particularly convincing argument. Hamilton thought he could reason with the British and get them to see that their interests ultimately dictated a closer economic relationship with the United States. But this turned out to require an extremely generous deal: The Jay Treaty of 1795 gave Britain many considerations but extracted few concessions in turn. And it was only a temporary fix. Halfway through the next decade, Britain again began abusing America’s international rights — interfering with American trade with France, and even impressing American sailors into the Royal Navy. Madison and Jefferson, meanwhile, were flat wrong to think that America could dictate terms to Great Britain. During Jefferson’s second presidential term and Madison’s first, the United States tried all manner of commercial retaliation for British high-handedness, to no avail. And when war finally came in 1812, the United States was badly outmatched and lucky to escape the conflict without losing any territory.
If we are to be a republic, governed of, by, and for the people of the United States, what does it mean that so many important decisions are effectively made by foreigners far from our shores?
Anglo–American relations from the early days of our history make for an entertaining story, but the debate between Madison and Hamilton has parallels to our contemporary conflicts. Hamilton serves as a kind of stand-in for the global, liberal order — one that has, on balance, been very good for the United States. It would be unwise to endeavor to alter it without due consideration. But putting on our Madisonian hat, we may ask: Where does that leave popular sovereignty? If we are to be a republic, governed of, by, and for the people of the United States, what does it mean that so many important decisions are effectively made by foreigners far from our shores? And for those who have been left behind in this post-industrial economy, the questions are especially grating, for they have not enjoyed the benefits of economic prosperity at the expense of this sovereignty.
Americans had to confront this issue during the crises of the 1790s through 1810s, but for most of the next hundred years, the United States was more or less free to shape its own destiny. Indeed, the country exhibited an unfaltering commitment to its independence, as exhibited by the Senate’s refusal to join Woodrow Wilson’s League of Nations after World War I and the power of the America First movement in the lead-up to World War II.
It has only been in the last 70 or so years that the United States has had to deal with the demands of a truly international order. And when we examine this struggle through the lens of history, we can appreciate that there are genuine trade-offs at work. The international order has facilitated expanding material prosperity, but at some cost of our own self-determination. Both of these values are at the heart of the American creed, for the preamble to the Constitution declares that “we the people” endeavor to form “a more perfect union.”
Ultimately, I come down staunchly on the side of the liberal order of free trade and open markets, but I do not like the condescension that often emanates from my fellow advocates of the status quo. If we are talking about “nationalism” as a kind of xenophobia or racism, then it is unacceptable. But we can also take “nationalism” to be a synonym for self-government, or more generally the authority of the people of the United States to shape their own destiny — a concept that most of us hold dear, at least to some degree. And it is important to acknowledge that the prosperity we have enjoyed in the last 70 years has come at the cost of our own self-determination, and that it is not necessarily unreasonable to view this trade-off as not having been worth it — especially among those whose economic fortunes have stagnated since the 1970s, the very sorts of voters who backed Trump and Sanders.
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