About Jan Tumlir

Not much has been written about Jan Tumlir, but his work is well known to both economists and lawyers who are specialized in trade policy. Tumlir’s thoughts on international politics and economics are quite unique and still influence the world 20 years after his death.

Tumlir was of Czech origin and begun his academic career at the Charles University in Prague where he studied law. In the 1940s, he emigrated to the United Sates where he taught economics until he became head of the research division of the GATT (General Agreement on Tariffs and Trade) in Geneva.

Tumlir’s work was inspired by liberal forebears like Henry Simons, Frank Knight, F. A. Hayek, Walter Eucken and Franz Böhm. He was influenced by the public choice literature of James Buchanan and he had much in common with both German ordoliberals like Wilhelm Röpke and classic political economists like Adam Smith.

The Domestic Order

To understand Tumlir’s conception of international politics and economics, one must start by examining his view on the domestic political order. Tumlir used the analytical tools of both economics and law to understand the economic order. He argued that the proper role of the government was to enforce certain rules of conduct. The economic policy of the government should be limited by the law to safeguard property rights and enforce contracts. Under this rule-governed framework, society was supposed to be like an open-ended adventure where individuals were to be left to live as they chose. Tumlir was therefore a proponent of democratic constitutionalism, with a strong separation of powers between the legislative, executive and judicial bodies.

According to Tumlir, limited government and a relatively free market economy prevailed in the West until the First World War. But ever since, politicians in the western countries have replaced the principle of Rule of Law with unrestricted powers of politicians and bureaucrats.

In short, Tumlir’s view on domestic order was built on law and economics, and emphasized spontaneous evolution within a framework of general rules.

The International Order

To Tumlir the international economic order were to a large extent an overspill of what happens within nation-states. Inflation and unemployment at the national level are for instance rapidly transmitted into the arena of international transactions.

The development after the First World War, with the rise of the unrestricted executive powers of politicians and the subsequent rent-seeking activities of private interests, decreased the willingness of public and private actors to adjust to external change. This resulted in a general fear of trade and a willingness to accept import protection. According to Tumlir, protectionism was “the inherent logic of the redistributive state working itself out externally”. As a result he rejected the thesis that modern protection was a cyclical phenomenon. Instead, he saw it as a structural feature of modern democratic politics.

The so called New Protectionism that began to aggravate in the 1960s and 1970s was, according to Tumlir, more harmful to society than any other aspect of economic policy or earlier forms of protection. The instruments of the New Protectionism, like VERs (Voluntary export restraints), subsidies and antidumping duties, not only distorted world prices but also reduced and circumvented the democratic constitutionalism within the nation-states. Tumlir asserted that the New Protectionism gave politicians and bureaucrats free rein to privilege some groups over others.

At the time many political scientists explained modern protectionism with the decline of the US hegemonic power. But Tumlir, like Adam Smith, blamed the increased executive power and the powerful rent-seekers.

To resolve the problems of international disorder created by the New Protectionism, influential scholars like Lord Robbins often suggested world government or international authorities. But Tumlir thought these ideas were naïve. Why would national governments accept to disarm themselves and create international authorities?

Tumlir’s way to create order in the international economic system leads us back to the nation-states. International disorder originates from greater governmental intervention within the nation-states and therefore liberal international order must emerge from constitutional reconstruction at the domestic level. This led Tumlir to recommend the leading western powers, like the US, the EU, Canada and Japan, to incorporate the unconditional MFN clause (MFN status means that a nation will not be given worse trade conditons than other nations) into their separate national laws as a private right.

The implementation of the MFN clause in national law would not only be a good thing for the international economy but also for the democratic constitutionalism in the states. Paradoxically, Tumlirs idea was not practiced in the industrial world as he thought, but in countries less developed like Chile, Bolivia, Estonia and New Zealand.

Tumlir understood that it would be easier to liberate trade in a reciprocal way. It would be easier for a country to reduce the trade barriers if other countries acted in the same way. But he was clearly in favor of unilateral trade liberalization if multilateral liberalization was not possible.