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I wonder if there might actually still be, even in our modern world, some major intellectual insights that future generations, once those insights have appeared, will think of as relatively low-hanging fruit and wonder why it took so long for their ancestors to come up with them, and wonder why their ancestors did not come up with them given that they already had every necessary bit of knowledge to come up with them, and maybe only lacked some spark of genius.
Some examples from history:
It makes me wonder what kinds of insights might be lying around these days, which future generations, if we do not discover them, might wonder what took us so long.
The problem with free markets is that they require a modern state.
Modernity provides the scale and technology to enable now commonplace and relatively undistortionary forms of taxation (e.g. income, sales) with ease and precision. Premodern societies struggled to raise taxes in non-distortionary ways, because anything they taxed needed to be highly legible to a tax collector. Hence, the widespread practice of building taxes becoming taxes on windows, gross floor area, and so on - leading to predictable results of fewer windows and slim but tall buildings in those areas. The most effective way of generating long-term revenue was in the form of tariffs levied at trade checkpoints. ~20% of the British State's revenue during the Napoleonic Wars was from customs duties, so you can imagine there was little incentive to reduce trade barriers even then, despite whatever Adam Smith had to say.
Premodern states simply weren't powerful enough to enable free markets. The local baron was powerful enough to enforce his idiosyncrasies within his domain. Certain products were restricted for his use, others might be required to be produced in a certain way, while 'his' peasants were tied to the land. A king attempting to change this would be attempting to upend feudalism, and find himself killed or forced to agree to limit his powers. In fact, the incentives usually ran the other way, with the crown being encouraged to grant certain monopolies or rights in return for support for new taxes or causes. Meanwhile, while Guilds notoriously fixed prices and restricted supply, they were sufficiently embedded in the social fabric that the King would find breaking them up or restricting their behaviour essentially impossible. Their dealings would be almost completely illegible to a premodern state, who anyway lacked a police force loyal to the crown able to punish cases of the guild breaking the legs, say, of a non-compliant journeyman.
Free markets are reliant on trust. For a village, the trust networks are already there, but at scale, what's needed is homogeneity and stability. Coinage was often inconsistent, and subject to frequent debasement. Only the modern state has the reach to provide consistent governance and enforcement for contracts, arbitrate disputes and so on.
Finally, only modern economies are sufficiently productive to allow free markets without frequent bread riots and the demand for price controls.
Yes, you can explain free markets to an intelligent 17-year-old, but only in modern times could it be anything more than a thought experiment.
I actually disagree -- some premodern states were powerful enough to potentially enable free markets; however, as you allude to, most of the time states that were this powerful (or, at least, the people controlling these states) often had insufficient incentive, and in many cases a significant disincentive, to promote institutions of free trade. The Brits who pioneered it had a relative incentive compared to other states to put in the legwork in creating the ideological framework and the sophisticated mechanisms that would allow free trade both due to internal factors (e.g. such as that which lead up to the English Civil War, or the French political situation in the late 18th-19th centuries) and external (e.g. profitable colonial enterprise for Britain); it riding in a package with other European liberal ideas at the time also helped. I think this explains much of the difference; I wouldn't be sure that the Russians or Spanish or Ottomans wouldn't develop similar ideas if they had similar incentives and pressures.
You see a similar thing in Song China (as alluded to by @BurdensomeCount) -- which had the makings of a modern fiscal state, with sophisticated monitoring of markets, indirect taxes (rather than land/population taxes), professionalised administration for taxes, heavy monetisation, debt financing, etc. -- due to the government decision to tax trade rather than land. The land tax was insufficient to fund its military against strong quasi-Chinese states to the north and treaty obligations (towards the same states), and the Song had to find some other way to raise revenue.
The Yuan that followed was part of the Mongol empire which kind of just screwed up everything, and the Ming that followed the Yuan was, in hindsight, highly economically regressive, even if it had the state capacity (at least at first, probably) to encourage institutions of free trade; the Song Chinese fiscal state was still immature and weak, and did not survive dynastic transition.
Not sure we're in disagreement? 'Premodern' European states are generally considered to be those prior to circa 1500 (obviously Chinese history is very different). Essentially, we're talking about medieval societies with vanishing state capacity beyond the ability to levy armies for war. My argument is that much higher state capacity is required to support free trade. The ability to support free trade scales with the capacity of the state - Revolutionary/Napoleonic France could support trade much better than the Frankish States, but free trade as we commonly understand it today - 0% tariffs, Friedman's Multinational Pencil, etc. requires 20th Century state capacity.
No, I agree with this; but I think that some European states in the early modern period — France under Louis XIV? — had enough pure state capacity to develop the ability to support free trade, and it still took a little while for ideas about free trade to get expressed. Conversely in China, early Ming China most likely had the state capacity to support free trade, but pointedly decided not to. (Chinese state capacity withered away dramatically over the Ming-Qing period anyway; I am happy to be corrected about the European record.)
I suppose what I mean is that a modern state is necessary but insufficient.
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