Liberal philosophy grew out of the Enlightenment’s preoccupation with freedom, which led to intense efforts to find the right balance between the social need for order and the individual’s natural liberties. Enlightenment philosophers unanimously excoriated all elements of the corporate society, which was ruled by landed elites wedded to the feudal ethos of conquest and the subsequent hoarding of resources.

The foundations of liberalism were laid by the science of political economy, developed in the eighteenth century on the new assumption that reason and enlightened self-interest guided a humanity recently arrived at the Age of Reason, after centuries of blinding prejudices. To the feudal order based on landed wealth, mercantile economics, and aggressive policies of conquest, eighteenth-century liberals opposed trade-generated wealth, free-market economics, and peaceful commercial relations between all nations.

The nineteenth-century disciples of the classical political economists went one step further and theorized that rational self-interest provided the maximum of individual freedom and the best guarantee of social peace at the same time. From here there was only one step, which many liberal theorists took, to concluding that a society based on free-market economics and individual freedoms represented the highest stage in the progress of humanity from darkness to freedom. Accordingly, liberal thinkers reflected on empires, and on the very concept of imperialism, from the perspective of the perceived links between trade-generated wealth, freedom, and progress.

Economic liberalism, built on the key concept of free trade, came mainly as a challenge to the doctrine of mercantilism, the dominant economic thinking of previous centuries, which considered the accumulation of wealth a zero-sum game: the more one nation enriches itself, the more another one would become impoverished. Consequently, mercantile economists advocated protectionism, high levels of exports but low levels of imports, state intervention, and the hoarding of bullion. Conquest and the subsequent exploitation of new land was part of the system, as the new possessions, the colonies, could be included in trade circuits that essentially exchanged the colonies’ raw materials for the mother country’s manufactured goods. Mercantilist economists rarely theorized on imperialism; still, a theory of imperialism emerged from their writings. Based on the assumption that, in a world of limited resources, one nation’s gains depended generally on the losses of another, they pushed for a favorable balance of trade between the metropolis (mother country) and the colonies. Colonial monopoly was, in this view, a legitimate way of maintaining or improving current national levels of wealth and power, a matter of what in the French political tradition was called ”reason of state.”

Liberals opposed these views on economic grounds and argued that protectionism and state intervention distorted the market. Any gains to the metropolis depended on the fortunes of conquest, which meant that any change in the military balance of power put economic profits at risk. By contrast, the mutually profitable engagement of commercial partners in the marketplace assured long-term profits, which did not depend on the fortunes of war.

The doctrine of free trade was best expressed by the French phrase ”laissez-faire, laissez-passer,” meaning ”let [commerce] follow its course, let [merchandise] pass,” coined in France in the mid-1700s by a group of economic theorists called physiocrats. The physiocrats still put agriculture at the center of the ideal economic system, but adamantly opposed trade barriers. Freedom of trade, in their view, was bound to increase the wealth of the nation, because capital and goods were allowed to move freely as the state gave up its interventionist habits.

Less openly expressed, but well understood by the audience of enlightened salons and academies who listened to the physiocrats, was the belief that the freedom of individuals would derive naturally from the freedom of the markets. Considering that France was an absolutist monarchy, a highly centralized state with an established mercantile economic system, the physiocrats’ call for free trade was subversive on several levels. It challenged an economic system that was supposed to maintain France’s supremacy and grandeur; it challenged the complicated web of privileges that maintained the existing social hierarchy along with the corporate sources of influence and power; it challenged the aristocratic ethos by extolling the virtues of commerce, which had no use for the traditional feudal notions of honor and lineage. Finally, free trade also implied the equality of all individuals as participants in the market, regardless of birth.

The notion that commerce had the ability to subvert aristocratic aggressive impulses and replace them with peaceful cooperation was further corroborated by the very respected Baron de Montesquieu (1689-1755), who regarded ”le doux commerce,” or peaceable commerce, as an excellent device for converting irrational aggressive passions into rational—and thus peaceful— interests. The philosopher Voltaire (1694-1778) concurred in ”Letters Concerning the English Nation” (1732), where he described approvingly how the desire for profits compelled people of diverse backgrounds to cooperate at the London stock exchange in the belief that they could all win by taking part in trade rather than wasting their time dwelling on ancient hierarchies. Commerce, in conclusion, could turn greed, a negative passion, into a positive force working toward social harmony, an unsentimental, yet optimistic belief that remained central to the liberal philosophy well into the twentieth century.

The explicit link between commerce and freedom explains why commerce was held in high esteem by many French philosophers of the Enlightenment age and became one of the main components of the revolutionary discourse. Expanded to the level of international relations, such beliefs logically led to the repudiation of imperialism on grounds that what was true within a given country was true for relations between nations: each nation had something that another needed, and each could potentially benefit from trade. Hence, free trade made the very rationale for conquest and domination disappear.

An economic liberal argument against colonial monopoly and imperialism, seen as outcomes of mercantilism, emerged in this way. It must be stressed, however, that Montesquieu and Voltaire, as well as the physiocrats, tended to emphasize the subversive capabilities of free trade more than the English economists, who lived in a system with fewer political and economic restrictions. In England, the economic argument against imperialism only marginally addressed the issue of freedom. Individual freedom, for metropolitan and colonial citizens alike, came as a positive consequence of freedom of trade, but was not the main objective of classical political economists. If mercantilism posited the predominance of politics over economics, liberalism strove to make economics an autonomous field, in the belief, however, that economic reason contained an intrinsic moral reason.


The landmark work that brought brilliantly together laissez-faire economics and the faith in the liberating potential of commerce was The Wealth of Nations (fully, An Inquiry into the Nature and Causes of the Wealth of Nations) by the Scottish economist Adam Smith (17231790), published in 1776. Smith accepted and developed many of the arguments of the physiocrats, including, albeit with qualifications, the high esteem they had for agriculture. In discussing the movements of capital, Smith believed that capital was more profitably invested in domestic commerce than in overseas trade, given the overhead expenses of long-distance trade and the fact that such trade often supported the labor of other nations more than it helped the labor market at home.

Adam Smith. Smith's Wealth of Nations (1769) was a landmark work that brought together laissez-faire economics and the faith in the liberating potential of commerce.

Adam Smith. Smith’s Wealth of Nations (1769) was a landmark work that brought together laissez-faire economics and the faith in the liberating potential of commerce.

Moreover, the cost of supporting the colonies outweighed whatever benefits the metropolis could extract. Smith had little sympathy for the rebellious American colonies, especially when it came to taxation. ”It is not contrary to justice,” Smith wrote, ”that… America should contribute towards the discharge of the public debt of Great Britain. …a government to which several of the colonies of America owe their present charters, and consequently their present constitution; and to which all the colonies of America owe the liberty, security, and property which they have ever since enjoyed” (Smith 1776, bk. 5, chap. 3). That said, Smith believed that the cost of governing the colonies, and putting down the ”disturbances,” was simply more trouble than it was worth. Empire, in his view, was more of a fanciful ambition, a matter of grandstanding rather than a practical, wealth-producing endeavor:

The rulers of Great Britain have… amused the people with the imagination that they possessed a great empire on the west side of the Atlantic. This empire, however, has hitherto existed in imagination only. It has hitherto been, not an empire, but the project of an empire; not a gold mine, but the project of a gold mine; a project which has cost, which continues to cost, and which, if pursued in the same way as it has been hitherto, is likely to cost, immense expense, without being likely to bring any profit. (Smith 1776, bk. 5, chap. 3)

The reason for this assessment was simple: the colonies were supposed to function as British provinces, integrated into the domestic market; once it was clear that this was not the case, common sense dictated that they should be treated as what they were—foreign markets and trade partners, which is why Smith recommended granting the colonies their independence, the sooner the better.

Observing the enthusiasm for investment in overseas trade and the very advantages that Britain could reap by the opening of new markets, Smith argued for abandoning the imperial system in favor of a vast free market. England would benefit much more from trading with the Americans than wasting time and money trying to keep them into the fold. Remarkably, this argument remained confined to the economic level, with no regard for the soaring rhetoric of freedom coming from the ”west side of the Atlantic.”

This argument was brought to its logical conclusions by the economist Josiah Tucker (1712-1799), who demonstrated in a work published in 1776 that Britain would profit more from letting the American colonies go and trusting in their need for British products than from maintaining the colonies and thus continuing to be obliged to buy American raw materials instead of cheaper, similar products from other places. However, Tucker confined this argument to the specific situation of the American colonies. In an earlier debate with the Scottish philosopher David Hume (1711-1776), Tucker had still argued in favor of tariff protections for poor countries, in order to keep the poor nations from being swallowed by the rich, a phenomenon apt to encourage rich countries to make colonies out of the poor countries and thus render meaningless the very principle of free trade.


The obligation of buying the products of the colonies, even at a disadvantage, could seem a small price to pay if offset by the opening of secure markets for the metropolis’s industrial products. The problem of a glut of capital, production, and even people could easily find its solution in the large privileged markets the colonies provided, all the more if, as Josiah Tucker demonstrated, colonies were poor countries unable to compete on the free market.

Classical economists suggested alternative solutions that they deemed more reliable in the long term because the solutions were rooted in free-trade mechanisms, independent of unpredictable political changes. In Commerce Defended (1806), a reply to an English disciple of the physiocrats (William Spence) who warned against overproduction in an industrial system, the Scottish philosopher and economist James Mill (1773-1836) introduced the theory of the international division of labor.

This theory was further developed by the economist David Ricardo (1772-1823) in Principles of Economy and Taxation (1817), a work that pleaded for the mutual benefits of such a system, insisting that free trade did not disadvantage any country, since each had the opportunity to sell its own surplus and buy what it lacked. Ricardo’s examples demonstrated the uselessness of maintaining imperial administrative control over the international system of trade. If England, Ricardo argued, manufactured better quality cloth at a cheaper cost than Portugal, while Portugal was able to produce wine with cheaper labor, and hence at a lesser price than England, then England would find it to its advantage to import the wine and export the cloth. This comparative advantage will endure, Ricardo argued, if both countries agreed to maintain their relative dependence on each other, for technical improvements could induce a certain country to produce all the products it consumes, which would in the end lead to rising prices in both countries. Ricardo argued that:

Under a system of perfectly free commerce, each country naturally devotes its capital and labour to such employments as are most beneficial to each. This pursuit of individual advantage is admirably connected with the universal good of the whole. By stimulating industry, by regarding ingenuity, and by using most efficaciously the peculiar powers bestowed by nature, it distributes labour most effectively and most economically: while, by increasing the general mass of productions, it diffuses general benefit, and binds together by one common tie of interest and intercourse, the universal society of nations throughout the civilized world. It is this principle which determines that wine shall be made in France and Portugal, that corn shall be grown in America and Poland, and that hardware and other goods shall be manufactured in England. (Ricardo 1821, chap. 7, p. 11)

On the subject of colonial trade, Ricardo agreed essentially with Adam Smith that free trade was a better option than colonial monopoly for the ”mother country” and for the colonies alike, because trade barriers and regulations inevitably brought about price distortions with far-reaching consequences:

Foreign trade, then, whether fettered, encouraged, or free, will always continue, whatever may be the comparative difficulty of production in different countries; but it can only be regulated by altering the natural price, not the natural value, at which commodities can be produced in those countries, and that is effected by altering the distribution of the precious metals. This explanation confirms the opinion which I have elsewhere given, that there is not a tax, a bounty, or a prohibition, on the importation or exportation of commodities, which does not occasion a different distribution of the precious metals, and which does not, therefore, every where alter both the natural and the market price of commodities. (Ricardo 1821, chap. 25, p. 12)

Classical economists then opted, more often than not, for free trade against the trade monopoly brought about by imperial commercial requirements, arguing that free trade in the end benefited all parties, poor and rich participants alike, more than any taxes, barriers, and other protections could. While keen on keeping economics autonomous from politics, liberal economists were not oblivious to the political, social, and cultural implications of imperialism.

James Mill offered the most brilliant example of merging economic theory with reflections on the meaning and mission of empire. A proponent of free trade himself, Mill became so interested in British-Indian relations and the activities of the English East India Company that he spent twelve years on the subject. In his massive History of India, published in 1817, Mill argued that there was a certain hierarchy between countries according to their greater or lesser degree of adherence to the principles of reason and individual freedom cherished by all members of the Scottish Enlightenment, of which he was a member. India, in his thinking, had to be seen as a nation just emerging out of its barbarian stage, while England, as a more advanced country with respect to freedom and self-government, had a civilizing mission to fulfill. Mill later famously complained that the British Empire had become ”a vast system of outdoor relief for the upper classes,” nonetheless what he criticized were the failures of England’s mission to civilize less advanced nations, not the principle that some countries have the duty to civilize others.

In an effort to reconcile free trade with the hierarchy of civilizations between nations, Mill criticized the trade monopoly of the East India Company and argued that all companies—British companies, that is—should be able to compete on the Indian market; yet he defended the rule of a revamped East India Company as a better solution than direct government control over India, a solution that corresponded with his strict noninterventionist beliefs. He did recommend that officials of the East India Company familiarize themselves with the customs and culture of India, and he suggested a number of reforms, but ultimately Mill accepted imperialism. He argued for what he understood to be an enlightened, civilizing imperialism, advantageous to both England and India, with India benefiting especially from the spread of English values via commercial relations.

Mill thus put elements of the theory of free trade, which on the whole weighed against imperialism, in the service of a social and political argument in favor of imperialism. In this respect he followed the method of British utilitarian philosopher Jeremy Bentham (1748— 1832) of judging all human actions, imperial enterprises included, according to their degree of utility or lack of utility to the nation, but also to humanity in general.


Social liberals were concerned with the balance of freedoms as much or more than with the balance of trade. International commerce and imperial expansion were to be judged according to their ability, or lack thereof, to expand freedom. The classical economists reasoned that the freedom of the market implied the freedom of the individuals, as free trade implied freedom from the controlling and regulating hand of the state in favor of the ”invisible hand” of the market. The argument was often invoked by philosophers who battled feudal social hierarchies and the feudal ethos of conquest and domination, in keeping with Montesquieu’s thesis that commercial societies were more conducive to social equity and peaceful coexistence than feudal societies.

Extended to the relations between nations, this thinking led to the conclusion that industrial and commercial nations, where the utilitarian ethos prevailed, should lead the nations that still clung to traditional, that is, in European terms, feudal values. This sort of international tutoring in political progress contributed to global peace and justified a sort of temporary imperialism, even though most liberals remained faithful to Adam Smith’s thesis that the colonies failed to bring any long-term advantages to the mother countries.

Jeremy Bentham encouraged both the English and the French to get rid of the colonies and thus spare themselves the manifold danger of wars, corruption, and continuous useless litigation, benefits that came to reinforce the advantages of free trade. However, even Bentham admitted that some colonies were riper than others for independence; in his view the American colonies, the West Indies included, were ready, which is why he advised France to grant them independence, while India was not.

Similarly, in his History of India James Mill stipulated that the Indians would be happier under British rule than under their own despotic kings, because they would be able to profit from the freedom and progress the British imparted to them. The universality of the principles of Enlightenment and the malleability of human nature made the civilizing of India possible and desirable. Moreover, once the Indians became civilized, that is, once notions such as practical reason, individual freedom, and constitutional government became the organizing principles of the Indian society, India would be in a position to lead the rest of Asia on the same road.

Far from making gains, the British economy was bound to lose in the process, on account of the high cost of running an empire, as Adam Smith and Jeremy Bentham had so clearly proved. However, the benefits to the Indians, whose path toward progress was sped up, outweighed those losses. Most importantly, ancient reasons for war were eliminated, as peaceful interactions based on trade replaced relations based on conquest and domination. The utility of imperialism, in Mill’s and Bentham’s view, derived from its contribution to the formation of a peaceful liberal global order.

It must be stressed that Mill makes it clear that what makes Britain more advanced than India are its ideas, freedoms, and spirit of enterprise, not a racial superiority of any kind. In principle, it was just as desirable that India rule Britain if by chance the Indians became more advanced in terms of freedoms and government. As the situation stood in his time, Mill believed that it was desirable and useful to both sides for Britain to rule, that is, to guide India, on the condition that Britain would let go as soon as India reached the desired stage of political maturity.

French liberals who admired the British system approved of British imperialism on the grounds that it spread liberty. Thus French author Madame de Stael (1766-1817) defended British imperialism, although she, along with her friend and fellow liberal Benjamin Constant (1767-1830) reproved French imperialism as practiced by Napoleon Bonaparte (1769-1821). ”England,” wrote Madame de Staeel, ”has adopted the principle of governing the inhabitants of the country according to their own laws. It may be hoped that the example of the English will sufficiently form these people so that they may one day claim independence. All enlightened men in England would approve the loss of India through the very benefits the government has bestowed there” (Stael 1964, p. 358). And, taking a leaf from Adam Smith’s book, she continued:

This Oriental empire is virtually a luxury; it contributes more to splendor than to real strength. England has lost its American colony and trade has been increased by it. If the colonies still remaining to them declared themselves independent, it would still maintain its naval and commercial superiority, because it has within itself a source of action, progress, and endurance that always puts it above circumstances. (Stael 1964, p. 358)

By contrast, Napoleonic imperialism was inhibiting the emancipation of the conquered peoples, which is why Madame de Stael and her circle opposed it forcefully.

In conclusion, classic liberals theorized that free trade was the preferred option for international relations, rather then imperialism, with its built-in governmental controls and trade monopolies. They also believed that trade rather than imperial domination would bring about global peace. However, they agreed that in order to spread the vision of a global liberal world, functioning according to the virtues of liberty, autonomous individualism, property, and peaceful commerce, empire was the best available tool for making these values accepted around the world. In ideal terms, then, classical liberal theory sees empire as a short-term economic anomaly, the utility of which is to be measured by the spread of liberal values around the world and the subsequent formation of a global liberal order.

While, in this view, there was no doubt that European, and especially British, political and social norms were superior to those of the colonies, there was no hint of racial superiority in the writings of the classic liberals. Later, during the nineteenth century, however, as European racial superiority became part of the discourse on empire, the goal of spreading liberal values became the British author Rudyard Kipling’s (1865-1936) famed ”white man’s burden,” which, resting on the illiberal hypothesis of racial superiority, entirely changed the substance of the discussion.

Assumptions of ethnic or racial superiority/inferiority subsequently gave cover to aggressive policies of brutal conquest and all manner of ill-treatment of the native populations. The focus on superior/inferior races made even luminaries of liberalism lapse into illiberal calls for domination. Thus the French historian and philosopher Alexis de Tocqueville (1805-1859), while decrying the dismal record of the French administration in Algeria, still concluded that power should remain in French hands, by force if necessary, on account of the inferior capabilities of the Algerians to rule themselves properly.

Awareness of the exploitative and oppressive imperial policies of the British government led the philosopher Herbert Spencer (1820-1903) to restate the terms of liberal theory on imperialism. Spencer continued to advocate the fundamentally beneficial role of laissez-faire trade and individual competition, in the belief that the free market was the best organizer of social life, because it demanded and then rewarded with the greatest precision services and contributions to the general good. On the subject of imperialism, Spencer abhorred state-sponsored, militaristic imperialism, which resulted in oppression, injustice, and brutality, all topped by market distortions, a system that could not but push both the colonized and the colonizers into barbarism. However, he considered that individual groups settling in far-off lands, on the model of the Puritans settling in America, ran none of the risks of state colonization.

Spencer’s work, continued by economist J. A. Hobson (1858-1940), saw in the nineteenth-century imperialism that merged high finance and military might a form of neomercantilism, with all its ills, economic, social, and moral. The more this new imperialism departed from the liberal ethos, the more vicious, militaristic, and unjust it became, in addition to benefiting nobody other than the upper classes, who were the only ones to benefit from the trade protections and interventionist policies of imperial governments.

The liberal theories of imperialism encountered opposition from several corners soon after they were elaborated. National economists emphasized the need for trade protections and exploitation of colonies as the interests of the mother country dictated. In the second half of the nineteenth century, Marxist theorists pointed to the exploitation of the colonies and deemed liberal ideals a fig leaf barely hiding naked domination and pillaging of weaker countries by the powerful ones. The supposedly good intention of advancing freedom was in fact bringing nothing but despoliation and inequality, with the result of making indigenous populations into a vast global proletarian class. This view of imperialism, already sketched out by the German philosopher Immanuel Kant (1724-1804), became the major and most fertile critique of liberal theories of imperialism. These arguments articulate, to this day, the dominant critical discourse on imperialism.

Finally, with the rise of cultural anthropology in the second half of the twentieth century, the very goal of spreading a certain set of political values, be they admirable in themselves, fell into disrepute among historians and other observers of imperialism. Liberal views on imperialism are currently criticized for advocating the adoption of particular political and social values over the cultural codes and system of values of the colonized peoples, in short for pursuing a racist agenda under the guise of spreading progress, itself viewed as a questionable endeavor.


During the mid-1700s, a group of French economic theorists known as the physiocrats played an instrumental role in the growth of economic science. Also known as “the sect” or ”the economists,” the physiocrats coined the phrase “laissez-faire, laissez-passer,” which means, ”let [commerce] follow its course, let [merchandise] pass.” They put agriculture at the center of the ideal economic system, believed that land was the root of all wealth, advocated a single land tax, and adamantly opposed trade barriers. Freedom of trade, in their view, was bound to increase the wealth of the nation, because capital and goods were allowed to move freely as the state gave up its interventionist habits.

Francois Quesnay (1694-1774) was the founder and leader of physiocracy, which means ”rule of nature.” It was he who argued that land and agriculture served as the basis of all wealth. While he did not condemn industry, Quesnay argued that only agriculture could produce a surplus, which he calledproduit net (net product), and that a nation could not prosper economically if it did not completely support agriculture. This axiom was the very nucleus of physiocracy. Victor Riqueti, Marquis de Mirabeau (1715-1789), a French soldier and devoted follower of Quesnay’s, was the main author of the physiocratic doctrine calling for a single land tax. According to some, his 1763 work La philosophie rurale is among the best statements of early physiocracy.

Expanding upon the contributions of both Quesnay and Mirabeau were Paul Pierre le Mercier de la Riviere (1720-1794) and Pierre-Samuel du Pont de Nemours (1739-1817). It was le Mercier de la Riviere who promoted the concept of”nature’s plan” in relation to the state. A businessman and adventurer, du Pont de Nemours founded and published Journal de I’Agriculture, des Arts et des Finances until 1766. He also coedited the journal Ephemerides du Citoyen with fellow physiocrat Abbe Nicholas Baudeau (1730-1792).

Other physiocrats included the French economist Anne-Robert-Jacques Turgot (1727-1781), who modified physiocratic theories and had a major impact on Scottish economist Adam Smith, author of Inquiry into the Nature and Causes of the Wealth of Nations (1776).

The classical liberal vision on imperialism was intimately connected to Enlightenment notions of freedom, utility, and progress. It certainly sinned by overoptimism in the possibility and, indeed, the need to create a global free market as a prerequisite for global peace. It also postulated the universality of liberal values and counted on the malleability of human nature, with no regard for the strength and endurance of local customs and cultural practices. Liberals also often failed to properly recognize the scale of dismal pillage and inhumane exploitation that imperial policies carried out, frequently hiding behind an ossified liberal discourse.

Liberal theories on imperialism are nowadays relegated to the history of ideas, and rarely, if ever, invoked for any lessons individuals in the twenty-first century might be able to learn or emulate. However, the continuous drive toward globalization and global markets under free-trade agreements, the oft-repeated belief that trade and not aid is what will help poor countries develop, and trade arrangements such as the North American Free Trade Agreement (NAFTA) and the Central American Free Trade Agreement (CAFTA) all echo the basic assumptions of classic liberalism. Finally, the great success of Niall Ferguson’s six-part television series Empire on the British Empire airing on the BBC in 2003, which integrates many points of the classical social liberal theories, demonstrates a certain renewed interest in liberal views on empire.

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