Chapter VIII: By the Law of Nations trade is free to all persons whatsoever

If however the Portuguese claim that they have an exclusive right to trade with the East Indies, their claim will be refuted by practically all the same arguments which already have been brought forward. Nevertheless I shall repeat them briefly, and apply them to this particular claim.

By the law of nations the principle was introduced that the opportunity to engage in trade, of which no one can be deprived, should be free to all men. This principle, inasmuch as its application was continually necessary after the distinctions of private ownerships were made, can therefore be seen to have had a very remote origin. Aristotle, in a very clever phrase, in his work entitled the Politics, has said that the art of exchange is a completion of the independence which Nature requires. Therefore trade ought to be common to all according to the law of nations, not only in a negative but also in a positive, or as the jurists say, affirmative sense. The things that come under the former category are subject to change, those of the latter category are not. This statement is to be explained in the following way.

Nature had given all things to all men. But since men were prevented from using many things which were desirable in every day life because they lived so far apart, and because, as we have said above, everything was not found everywhere, it was necessary to transport things from one place to another; not that there was yet an interchange of commodities, but that people were accustomed to make reciprocal use of things found in one another’s territory according to their own judgment. They say that trade arose among the Chinese in about this way. Things were deposited at places out in the desert and left to the good faith and conscience of those who exchanged things of their own for what they took.

But when movables passed into private ownership (a change brought about by necessity, as has been explained above), straightway there arose a method of exchange by which the lack of one person was supplemented by that of which another person had an over supply. Hence commerce was born out of necessity for the commodities of life, as Pliny shows by a citation from Homer. But after immovables also began to be recognized as private property, the consequent annihilation of universal community of use made commerce a necessity not only between men whose habitations were far apart but even between men who were neighbors; and in order that trade might be carried on more easily, somewhat later they invented money, which, as the derivation of the word shows, is a civic institution.

Therefore the universal basis of all contracts, namely exchange, is derived from nature; but some particular kinds of exchange, and the money payment itself, are derived from law; although the older commentators on the law have not made this distinction sufficiently clear. Nevertheless all authorities agree that the ownership of things, particularly of movables, arises out of the primary law of nations, and that all contracts in which a price is not mentioned, are derived from the same source. The philosophers distinguish two kinds of exchange using Greek words which we shall take the liberty to translate as ‘wholesale’ and ‘retail’ trade. The former, as the Greek word shows, signifies trade or exchange between widely separated nations, and it ranks first in the order of Nature, as is shown in Plato’s Republic. The latter seems to be the same kind of exchange that Aristotle calls by another Greek word which means retail or shop trade between citizens. Aristotle makes a further division of wholesale trade into overland and overseas trade. But of the two, retail trade is the more petty and sordid, and wholesale the more honorable; but most honorable of all is the wholesale overseas trade, because it makes so many people sharers in so many things.

Hence Ulpian says that the maintenance of ships is the highest duty of a state, because it is an absolutely natural necessity, but that the maintenance of hucksters has not the same value. In another place Aristotle says: “For the art of exchange extends to all possessions, and it arises at first in a natural manner from the circumstance that some have too little, others too much.” And Seneca is also to be cited in this connection for he has said that buying and selling is the law of nations.

Therefore freedom of trade is based on a primitive right of nations which has a natural and permanent cause; and so that right cannot be destroyed, or at all events it may not be destroyed except by the consent of all nations. So far is that from being the case, that any one nation may justly oppose in any way, any other two nations that desire to enter into a mutual and exclusive contractual relation.