Lord Townshend on Trade and Morality
[Excerpted from An Austrian Perspective on the History of Economic Thought, vol. 1, Economic Thought Before Adam Smith (1995). An MP3 audio file of this article, read by Jeff Riggenbach, is available for download.]
Charles, the third Viscount Townshend (1700–1764), has been shamefully neglected by virtually all historians of economic thought. He is virtually unknown and is often confused with his son of the same name, who was infamously responsible for the fateful Townshend taxes on tea and other imports into the American colonies.
Our Lord Townshend was a scion of one of the great agricultural estates in England, son of the well-known diplomat and scientific farmer "Turnip" Townshend, and husband of the glamorous socialite Audrey. Lord Townshend's first published pamphlet cut against his own personal economic interest by denouncing the policy of large subsidies on the export of corn. The pamphlet, "National Thoughts" (1751), was signed "By a Landowner" to emphasize this point of arguing against his own subsidy.
Dean Tucker struck up a correspondence with Townshend, in defense of the export bounty on corn. But soon Tucker was converted on the issue. Thus Townshend pointed out the folly of the British government's subsidizing foreigners by allowing them to buy corn more cheaply than the British themselves. Tucker was especially admiring of Townshend's uniqueness in arguing particular cases from general principles instead of the other way round, and specifically the general interest in favoring free competition as against grants of monopoly by government. Thus, Tucker writes to Townshend that
I am mightily pleased with your Lordship's … manner of accounting for People's frequent and gross Mistakes in the Affairs of Commerce … by arguing from Particulars to Generals; whereas in this case a Man should form to himself a General Plan drawn from the Properties of Commerce, and then descend to Particulars and Individuals, and observe whether they are cooperating with the general Interest: Unless he doth this, he studies Trade only as a Monopolist, and doth more Hurt than Good to the Community.
Tucker declared himself convinced that "bounties cannot be of any national service to a manufacture which is passed its infancy."
A bit later in this correspondence, Lord Townshend demonstrated his adherence to free-market principles by criticizing the inconsistencies of Sir Matthew Decker, a director of the East India Company. Decker (1679–1749), a Dutch immigrant, had also attacked the corn bounty, but Townshend was sharply critical because "Notwithstanding this sound Doctrine he [Decker] proposes to form [monopoly] Companies and to erect [governmental] Magazines of Corn in every County. … A most surprising absurdity and inconsistency." Of course, the inconsistency is not so surprising if we realize that Decker was a director of the greatest monopoly company of them all.
Townshend then goes on to point out that if, as he advocates, "Trade and Industry and all our Ports were thrown open and all Duties, Prohibitions, Bounties, and Monopolies of every kind whatever were taken off and destroyed," then "private Traders here would erect Warehouses for Corn as they have done for other manufactures and we should then have them on a regular and natural footing and this Island would then be, as Holland has been, the great market of Europe for Corn. But as long as the Bounty remains this cannot be."
In "National Thoughts," Lord Townshend was worried about the poor, and paternalistically advocated removing the enforceability in court of small amounts of debt in order to help their condition. In later letters, however, Townshend introduced a bill in Parliament that would instead increase the mobility of the laboring poor by removing "certain Disabilities and Restraints" upon them. Professor Salim Rashid speculates that the change in stance came about because, "having accepted the validity of laissez-faire, Townshend came to believe that the poor could not be helped more than by making them free to help themselves."
So eager was Lord Townshend to spread the principles of free markets and free trade that in 1756 he sponsored prizes at Cambridge for essays on economic topics. Essay contests after the first year were discontinued because Townshend and the university could not agree on essay questions. Thus Cambridge turned down Townshend's suggested topic: "What influence has Trade on the Morals of a Nation?"
Lord Townshend was indignant at Cambridge University's implicit denial of any connection between trade and morality, and he replied indignantly and with keen perception, "There is not any moral Duty which is not of a Commercial nature. Freedom of Trade is nothing more than a freedom to be moral Agents." This latter sentence expresses the crucial libertarian insight of the unity between free moral agency and freedom to act, produce, and exchange property.
Other questions suggested by Lord Townshend also put the libertarian rhetorical case very well:
"Has a free trade or a free Government the greater effect in promoting the wealth and strength of a Nation?"
"Can any restraints be laid on trade or industry without lessening the advantages of them? And if there can, what are they?"
"Is there any method of raising taxes without prejudice to Trade? And if there is what is it?"
Despite his neglect by historians, Lord Townshend's views seem to have had substantial influence in his day. The prominent Monthly Review guessed the identity of "the Landowner" author of "National Thoughts" immediately upon publication, and the pamphlet was quoted in another tract on the corn bounty the following year. Lord Townshend had a prominent connection with the important periodical The Gazetteer. And in 1768, four years after Lord Townshend's death, an anonymous pamphlet on "Considerations on the Utility and Equity of the East India Trade" argued, once again, for breaking the East India Company monopoly and lamented the death of Lord Townshend, so sound and knowledgeable on commercial questions.
Clearly, Lord Townshend was far more influential in mid-18th-century England than later historians would know. Moreover, he was both an example and an embodiment of a rising tide of laissez-faire sentiment in the Britain of that era.
 The full title was: "National Thoughts, Recommended to the Serious Attention of the Public. With an Appendix, Shewing the Damages Arising from a Bounty on Corn." In Salim Rashid, "Lord Townshend and the Influence of Moral Philosophy on Laissez Faire," The Journal of Libertarian Studies, 8, no. 1 (Winter 1986), pp. 69–74. Rashid is virtually the only historian to resurrect Townshend and demonstrate his importance. But see See George Shelton, Dean Tucker and Eighteenth-Century Economic and Political Thought (New York: St Martin's Press, 1981), note 43, pp. 79, 88.
Rashid points out that several leading scholarly libraries have erroneously attributed authorship of this pamphlet to Townshend's son. Rashid, op. cit., p. 73.
 Tucker to Townshend, April 22, 1752. Rashid, op. cit., note 44, p. 73.
 It is amusing to contrast Townshend's critical attitude toward Decker with the laudatory appraisal of T.W. Hutchison, who virtually finds Decker a free-trade hero, calling for "the abolition of all duties," and opposing the Navigation Act as well as retaliatory tariffs. Rashid, op. cit., note 44, p. 71; T.W. Hutchison, Before Adam Smith: The Emergence of Political Economy, 1662–1776 (Oxford: Basil Blackwell, 1988), pp. 293–4.
 The Townshend bill was introduced in 1753, but no action was taken on it. Rashid, op. cit., note 44, pp. 71, 73.
 Rashid, op. cit., note 44, p. 72. The libertarian answers, presumably to be elicited by Lord Townshend's questions, are, respectively: free trade, no, and no.