History Repeats Itself!

This is only a part of the famous quote by well-known German philosopher Karl Marx: “History repeats itself, first as tragedy, second as farce.” Mankind is an observer as well as a victim of social development proving the truth of this statement.    

The famous Scottish economist and philosopher Adam Smith in his magnum opus “Wealth of Nations” (1776) theoretically explained why and how tariffs prevent free trade and economic and social development: “The French have been particularly forward to favour their own manufacturers by restraining the importation of such foreign goods as could come into competition with them. In this consisted a great part of the policy of Mr. Colbert, who, notwithstanding his great abilities, seems in this case to have been imposed upon by the sophistry of merchants and manufacturers, who are always demanding a monopoly against their countrymen. It is at present the opinion of the most intelligent men in France that this operations of this kind have not been beneficial to his country. That minister, by the tarif of 1667, imposed very high duties upon a great number of foreign manufactures. Upon his refusing to moderate them in favour of the Dutch, they in 1671 prohibited the importation of the wines, brandies and manufactures to France. The war of 1672 seems to have been in part occasioned by the commercial dispute. The peace of Nimeguen put an end to it in in 1678, by moderating some of those duties in favour of the Dutch, who in consequence took off their prohibition.

It was about the same time that the French and English began mutually to oppress each other’s industry, by the like duties and prohibitions, of which the French, however, seem to have set the first example. The spirit of hostility, which has subsisted between the two nations ever since, has hitherto hindered them from being moderated on either side. In 1697 the English prohibited the importation of bonelace, the manufacture of Flanders. The government of that country, at that time under the dominion of Spain, prohibited in return the importation of English woollens.”

Jean-Baptiste Colbert was comptroller general of finance under King Louis XIV. Colbert promoted protectionism as a key tool for having positive balance of trade which means that export exceeds import and money flows in the country which is getting richer. This theory is called early mercantilism which was considered to be surpassed 400 years ago, but surprisingly restored by current US president Donald Trump, the Republican Party candidate. In the past, US republicans were proponents of free trade which sped up the economic development of Western civilization and became the global shop window of freedom, democracy, wealth,  welfare and guarantor of peace at least among advanced countries. Let’s hope this time is not over! 

Jiří Schwarz,
President of Anglo-American University

Jiří Schwarz is an economist with research dealing in the Economics of Regulation with a focus on energy and financial markets. He has been the President of the Anglo-American University in Prague since 2022. He is a Founder of CETA – Center for Economic and Market Analyses and a member of the Scientific Committee of IREF – L’Institut de Recherches Economiques et Fiscales in Paris. He was a member of the National Economic Council of the Czech Republic (NERV) from 2009 to 2013. He is the Chair of the Supervisory Board of Opportunity Real Estate Fund, SICAV and also chair of the Supervisory Board of Národní vzdělávací fond, o.p.s. He is a member of the Mont Pelerin Society, registered in Washington, D.C.