Economic Liberalism and the Evolution of Free Trade

The Principles of Free Trade

Free trade is the economic doctrine that advocates for no state intervention in international trade. This approach allows the flow of goods to be governed by the comparative advantages of each country and the competitiveness of enterprises. It assumes that this will result in a proper distribution of goods and services and an optimal allocation of economic resources worldwide.

The Transition from Mercantilism to Liberalism

The relationship between the state and the economy during the nineteenth century was guided by the progressive dismantling of mercantilist practices developed by the absolute state and influenced by the manorial system. In theory, economic liberalism proposed the withdrawal of the state from the economic sphere, leaving market dominance to handle the allocation of resources. However, across the European doctrinal landscape, these principles were implemented in practice at different rates, depending on:

• The political will of public powers.
• The ability of interest groups to influence policy.
• The influence of individuals associated with the political clientele of economic elites.

Protectionism and Industrial Growth

The debate between protectionism and free trade was a key point in the breakdown of mercantilist practices. This debate took a different tone in various European countries based on perceived internal possibilities for industrial growth. In Britain, the leader of industrialization, the final defeat of protectionism occurred in 1846 with the abolition of the Corn Laws.

The Spanish Economic Context

In the Spanish case, interference is visible from the rupture of the oceanic state and the loss of the colonial market. Coinciding with the internal crisis of the Old Regime and liberal state-building, this transition was asymmetrical. While presented as a parallel development leading to the resignation of mercantilist practices and the abolition of the seigneurial regime, the reality was complex. During the first trial of 1820-1823, as the liberal society dismantled manorial relations, it responded to the loss of the Empire by reclaiming protectionist principles for the external sector. Agricultural protectionism was later accompanied by a similar trend in the Catalan textile industry, a focal point of Spanish industrialization.

Integration into the World Market

Consequently, mercantilism became divorced from its global notion. While protectionism was still applied to the external side, the economic and social legislation of the 1830s built an internal market under liberal principles. The real integration of the Spanish economy into the world market became subject to varying degrees of protectionism, offering different forms of global economic engagement.