Ayn Rand on Free Trade, the ‘Essence of Capitalism’s Foreign Policy’

President Trump has now touted a new trade deal with China in an effort to calm markets and return business to normal. But tariffs on China remain at a historic high of thirty and the alleged threats to American national security that originally rationalized tariffs have not changed.

Recent lawsuits challenging the tariffs have reasonably objected that trade deficits and fentanyl don’t count as real national security emergencies. But the United States does face significant national security challenges (if not via deficits and drugs) from China and other foreign powers. So, critics of the new tariffs need clarity about the proper role of trade policy in protecting national security.

They can find it in the ideas of a thinker who understood the harmony between free trade and a strong national defense: Ayn Rand.

Rand’s principled position on free trade stood in stark contrast to Republicans who, since the 1980s have offered at best a pragmatic defense of free trade drawn from economic statistics but never shored up by any underlying political philosophy. So it’s no surprise that various populist-tribalist forces led them to abandon their previous tenuous commitment.

As a self-described “radical for capitalism,” Rand’s defense of free trade was stalwart because it was integrated intimately with her deepest political principles and overall philosophical worldview. As a result of this underlying worldview and her keen observation of history and politics, she was able to apply her principles intelligently, respecting important differences in context, to a range of different cases. Anyone who cares about American national security but who rejects the tribal-pragmatist perspective of today’s politicians should examine Rand’s approach.

“The essence of capitalism’s foreign policy”

Rand’s most explicit and sustained commentary on the issue of free trade vs. protectionism appears in her book Capitalism: The Unknown Ideal. There in her essay “The Roots of War,” Rand defends capitalism against the charge that “profiteering” by business and industry is responsible for war. She argues that, on the contrary, the fundamental cause of militarism and aggression is statist politics: when authoritarian or interventionist governments finish plundering the wealth of their own populace, they move on to do the same to neighboring countries.¹ 'Capitalism, Ayn Rand stresses, is the society for traders not, warriors.' Share on X

Capitalism, by contrast, is the “social system based on the recognition of individual rights, including property rights, in which all property is privately owned.”² As such it bans the forceful expropriation of property at home, freeing men to seek their own fortunes and disincentivizing them from seeking plunder abroad.³ Capitalism, she stresses, is the society for traders, not warriors.⁴ It’s in that context that she draws this conclusion:

The essence of capitalism’s foreign policy is free trade – i.e., the abolition of trade barriers, of protective tariffs, of special privileges – the opening of the world’s trade routes to free international exchange and competition among the private citizens of all countries dealing directly with one another. During the nineteenth century, it was free trade that liberated the world, undercutting and wrecking the remnants of feudalism and the statist tyranny of absolute monarchies. . . .

Capitalism wins and holds its markets by free competition, at home and abroad. A market conquered by war can be of value (temporarily) only to those advocates of a mixed economy who seek to close it to international competition, impose restrictive regulations, and thus acquire special privileges by force. The same type of businessmen who sought special advantages by government action in their own countries, sought special markets by government action abroad. At whose expense? At the expense of the overwhelming majority of businessmen who paid the taxes for such ventures, but gained nothing. . . .⁵

Rand saw free trade as the mechanism by which capitalism ensured international peace. Individuals free to produce and trade have no interest in war with their trading partners, and the spread of that freedom increases their security. Here Rand cited the relative absence of global war in the nineteenth century, especially as enabled by the free trade secured by the globe-girdling British Empire and its navy.⁶

With her eyes on history, Rand confidently skewered the enemies of free trade in her day and praised its expansion.

“Countless industries at the mercy of his unpredictable favor”

In the early 1960s, for instance, Rand was a regular critic of the statist-interventionist domestic policies of the Kennedy administration, whose policy agenda she even once called “the Fascist New Frontier.” She bemoaned, in particular, Kennedy’s attempts to control prices and wages through antitrust law and tax policy.

Rand noted that when Kennedy found that his policies disincentivized production and economic growth, he sought to offer a consolation prize to industry in the form of a tariff bill. In a 1962 LA Times column (reprinted in The Ayn Rand Column), she condemned a tariff bill proposed by President Kennedy that would give him “discretionary power to raise or lower tariffs, thus leaving the fate of countless industries at the mercy of his unpredictable favor.”⁷ (Her warning here sounds prophetic amid Trump’s tariffs.)

In this same period in another column, Rand applauded the European Common Market for breaking down trade barriers among its member nations, a move that worked to counterbalance the trend toward socialism in the domestic policies of the member nations’ governments. “Starting from war-time ruins, it turned to freedom, not as a philosophy, but as an expedient, and adopted one aspect of capitalism: free trade. The results were miraculous.”⁸

Rand even chides British Labor Party politiciansfor opposing entry into the Common Market on the ground that it would interfere with national central planning.⁹ (It’s a mark of how far today’s conservatives have moved from their twentieth-century support for free market economics that they now favor the policies once advocated by the socialists of the 1960s.)

Notably, Rand’s support for free trade policy didn’t only extend to relationships among the freer countries of the world. Even as an ardent anti-communist, Rand saw free trade as an antidote to the threat of Communist China. In a 1967 television interview with Johnny Carson, rather than advocating an array of tariffs against China, Rand proposed the following:

A free country can coexist with anyone, and incidentally free the rest of the world by example, if it frees itself and if it has a firm domestic and foreign policy. Remember that the United States destroyed tyranny, serfdom and slavery all over the world, not by fighting wars, by example, by free trade. A free country destroys barriers gradually, but for that you need a proper political philosophy.¹⁰

Rand of course thought the political leaders of the U.S. did not have the proper political philosophy. We’ll return to the subject of what deeper philosophical understanding would be needed to lead by such an example. But first we should discuss what happens when a country like China is not simply unfree as it was in the 1960s, but a military threat, as it arguably is today.

“Deal with dictatorships . . . at your own peril”

The purpose of government under capitalism is to protect the individual rights of its citizens, including their property rights. In a normal peacetime context this implies the need to protect free trade with businesses in foreign countries. But precisely because the purpose of government is the protection of its citizens’ rights, government also has the obligation to protect its citizens from foreign military threats.

Rand was unrivaled in her commitment to a firm foreign policy that defends the individual rights of Americans.¹¹ Even as a fierce critic of Kennedy, she praised his blockade of Cuba during the 1962 missile crisis on the grounds that any step needed to eliminate “an intolerable threat to our national security” was justifiable.¹² She also condemned the suspension of that blockade, during the crisis, to express a “good will” gesture on the occasion of UN Secretary General U Thant’s visit to Cuba.¹³

But tariffs are notably different from blockades and embargoes used to oppose military threats. If one is truly committed to protecting Americans’ lives, property, and freedom, one does not slap on a tax to skim off the top of trade with an enemy regime, one outlaws it. To the extent that China poses a threat today, we should ban exports there of militarily sensitive technology and imports of its products that violate American intellectual property rights.

Full embargoes, of course, are tactics during imminent military conflict. In a 1964 interview with Playboy, Rand said that only an economic boycott of Soviet Russia was necessary to oppose its threat:

Playboy: Would you actively advocate that the United States invade Cuba or the Soviet Union?

Rand: Not at present. I don’t think it’s necessary. I would advocate that which the Soviet Union fears above all else: economic boycott. I would advocate a blockade of Cuba and an economic boycott of Soviet Russia; and you would see both those regimes collapse without the loss of a single American life.¹⁴

So, even in the face of a powerful military threat like the USSR, Rand called at most for economic boycott. This would be consistent with export controls in military technologies, which of course the United States did impose on Russia at the time.¹⁵ 'If one is truly committed to protecting Americans’ lives, property, and freedom, one does not slap on a tax to skim off the top of trade with an enemy regime; one outlaws it.' Share on X

While the purpose of a nation’s military is to protect the rights of its citizens, this does not imply that it must police the world and guard against every risk of doing business in every unfree country. For this reason, Rand thought that businessmen who wanted to trade with dictatorships should be free to do so, but at their own peril. This is why she offered the following careful answer to a question after a 1970 lecture about the role of a proper government in imposing restrictions on trade with dictatorships:

If you had a completely free government and free society, I wouldn’t venture to say should the government or should it not impose embargos on dictatorships. That is a very technical question. I would say this: if embargos are necessary, if a certain dictatorship like Cuba is quite a threat to this country simply as a base for Soviet Russia, then if there is a demonstrable danger of war or physical attacks then the government of a free country would have the right to impose an embargo on that country, therefore forbidding businessmen to deal with it. But you know what is much better and what actually did happen in the nineteenth century? The government wouldn’t have to forbid a businessman to deal with the bad countries of the time, like a South American dictatorship which has changed every few months. It wasn’t forbidden, only the government would not protect or help citizens who dealt with unstable regimes of that kind. Therefore, the attitude of the government was “If you want to deal with dictatorships, do so at your own peril,” and the dictatorship took care of the peril. The businessmen who collaborated did not come out of it too well. In modern times, it applies particularly to the businessmen who collaborated with Soviet Russia, and most of our big companies unfortunately did help to establish Soviet Russia economically. . . . Businessmen who helped develop Russian Industries . . . all but lost their shirt at it and they’re still trying to do it.¹⁶

Importantly, the use of military blockades or embargoes is not merely a pragmaticexception to a general policy of free trade. For Rand, there was a difference in principle, deriving from the basic principle of proper government: government is properly limited to the function of protecting individual rights. In peacetime, government protects property rights by protecting free trade. But in times of war or imminent military threat, government protects the rights of peaceful people by outlawing trade that aids and abets the threat of an aggressive foreign government as part of its purpose of providing for national defense.

The ultimate principle behind Rand’s case was not essentially economic or political, but moral.

“Man’s only ‘economic rights’”

In her most important theoretical statement of the importance of individual rights, her 1963 essay “Man’s Rights,” Rand argues that “individual rights” is the crucial concept linking moral and political philosophy.¹⁷

For example, contrary to the medieval doctrine of the Divine Right of Kings that holds that individuals must function by permission of the state, the doctrine of individual rights holds that the “only proper purpose” of government is to protect individual rights in accord with the consent of the governed.¹⁸ This political alternative stems from a basic moral alternative: the Divine Right of Kings is derived from a religious view of morality that prized humility and sacrifice, whereas the doctrine of individual rights derives from an opposite morality, one that upholds the virtue of the prideful pursuit of happiness.¹⁹ Individual rights aim to protect an individual’s virtuous pursuit of happiness from the basic evil they face in a social context, the evil of the threat of physical force.²⁰

Businessmen and industrialists are exemplars of producers who apply their minds to learning how to create material goods and services to trade with others. Their right to life, like everyone’s, implies the right to property, the right to keep and use the earned products of their efforts. Capitalism, Rand argued, is the system that protects by right the morally admirable activities of trade and production.²¹ Individual rights shield us from the initiation of physical force – whether by tax collectors, or dictators threatening us with missiles.

“Man’s Rights” was written in April 1963 at the height of the Kennedy administration’s aforementioned assault on economic freedom, which threatened force against business and industry on numerous fronts. So, it’s natural that central here to her articulation of the theory of individual rights is an emphasis on the role of property rights.

In that essay, Rand contrasts her view of property rights with the various “economic rights” asserted by the Democratic Party platform of 1960, which claims that every citizen has the “right” to a job, to trade without unfair competition, to be provided with various welfare benefits, to be protected from economic uncertainty. Rand rejects these “rights” on the ground that the right to property is not a right to goods but a right to engage in action free from force. For government to protect the Democrats’ “rights” by redistributing the property earned by businessmen or by otherwise restricting their activity is not to protect rights but to violate them.

Her defense of property rights and critique of the Kennedy Democrats reaches a crescendo in the following passage:

There is no such thing as “a right to a job” – there is only the right of free trade, that is: a man’s right to take a job if another man chooses to hire him. There is no “right to a home,” only the right of free trade: the right to build a home or to buy it. There are no “rights to a ‘fair’ wage or a ‘fair’ price” if no one chooses to pay it, to hire a man or to buy his product. There are no “rights of consumers” to milk, shoes, movies or champagne if no producers choose to manufacture such items (there is only the right to manufacture them oneself). There are no “rights” of special groups, there are no “rights of farmers, of workers, of businessmen, of employees, of employers, of the old, of the young, of the unborn.” There are only the Rights of Man – rights possessed by every individual man and by all men as individuals.²²

Today’s tariff frenzy is not really motivated by a concern for military threats, anyway. In “Man’s Rights,” Rand lampooned the actual motivation, the view that the businessman has a right to be free “from unfair competition.” She answered: “Property rights and the right of free trade are man’s only ‘economic rights’.”²³

The failed ideas of the Kennedy administration have now been scavenged from the scrap heap of history by Trump. Learning from Rand, we should oppose on principle any foolish attempt to purchase security at the expense of restricting free trade, no matter the fool’s party.

1. Ayn Rand, “The Roots of War,” in Capitalism: The Unknown Ideal (New York: Signet, 1967), pp. 32–3.
2. Ayn Rand, “What Is Capitalism?,” in Capitalism: The Unknown Ideal, p. 10.
3. Ayn Rand, “The Roots of War,” in Capitalism: The Unknown Ideal, p. 33.
4. Ayn Rand, “The Roots of War,” in Capitalism: The Unknown Ideal, p. 34.
5. Ayn Rand, “The Roots of War,” in Capitalism: The Unknown Ideal, p. 35.
6. Ayn Rand, “The Roots of War,” in Capitalism: The Unknown Ideal, p. 35. Here Rand also cites a passage from her friend Isabel Paterson, God of the Machine (Caldwell, ID: The Caxton Printers, 1964), p. 121.
7. Ayn Rand, “Promises to Parasites Fail to Bring Results,” Los Angeles Times, July 1, 1962, 64. Reprinted as “Progress or Sacrifice,” in Peter Schwartz (ed.), Ayn Rand Column: Written for the Los Angeles Times, revised edition (New Milford, CT: Second Renaissance Books, 1991), p. 10.
8. Ayn Rand, “Nation’s Political System Is Its Paramount Concern,” Los Angeles Times, November 4, 1962, p. 104. Reprinted as “Nationalism vs. Internationalism” in Peter Schwartz (ed.), Ayn Rand Column, 60.
9. Ayn Rand, “British ‘National Socialists’ Deceive American Liberals,” Los Angeles Times, October 21, 1962, 82. Reprinted as “Britain’s ‘National Socialism’” in Peter Schwartz (ed.), Ayn Rand Column, p. 57.
10. Interview with Ayn Rand, Tonight Show Starring Johnny Carson, NBC-TV, August 11, 1967. Reprinted in Marlene Podritske and Peter Schwartz, Objectively Speaking: Ayn Rand Interviewed (Lanham, MD: Lexington Books, 2009), p. 197.
11. See Elan Journo, “Ayn Rand’s Distinctive View on International Affairs,” New Ideal, September 24, 2018.
12. Ayn Rand, “Cuba Crisis Not Right Time for Kennedy Visit to Ballet,” Los Angeles Times, November 25, 1962, p. 90. Reprinted as “How to Demoralize a Nation” in Peter Schwartz (ed.), Ayn Rand Column, p. 67.
13. Ayn Rand, “U.S. Position on Cuba Endangered by U.N.,” Los Angeles Times, November 11, 1962, p. 88. Reprinted as “The Cuban Crisis” in Peter Schwartz (ed.), Ayn Rand Column, p. 63.
14. “Playboy Interview: Ayn Rand,” by Alvin Toffler,” Playboy, March 1964.
15. Anne Marie Lacourse, “History of U.S. and Russian Export Controls,” ACAMS Today, August 1, 2022.
16. Ayn Rand, Q&A after “The Anti-Industrial Revolution” (Ford Hall Forum), November 1, 1970.
17. Ayn Rand, “Man’s Rights,” in The Virtue of Selfishness: A New Concept of Egoism (New York: Signet, 1964), p. 108.
18. Ayn Rand, “Man’s Rights,” in Virtue of Selfishness, pp. 109–11, 114.
19. Ayn Rand, “Man’s Rights,” in Virtue of Selfishness, p. 110.
20. Ayn Rand, “Man’s Rights,” in Virtue of Selfishness, p. 111.
21. Ayn Rand, “Man’s Rights,” in Virtue of Selfishness, p. 108.
22. Ayn Rand, “Man’s Rights,” in Virtue of Selfishness, pp. 114–15.
23. Ayn Rand, “Man’s Rights,” in Virtue of Selfishness, p. 115.