By the late eighteenth century, the benefits of free trade were widely understood by enlightened economists. Largely because of their influence, the U. S. Constitution prohibited the erection of tariffs or other trade barriers among the states. The new nation thus became in effect a large "free-trade zone," in contrast to the older Europe of small protectionist countries. Such unimpeded trade was a major source of the unprecedented and widely envied prosperity achieved in this country.

In Europe, meanwhile, powerful established interests long blocked the implementation of such progressive policies. In Britain, for instance, the important protective tariff on grain imports was increased by a new Corn Law, enacted in 1815. The chief defenders of this policy were the landed gentry, since the tariff increased the market value of domestic agricultural products, enabling these aristocratic landowners to increase their rents and incomes. This reactionary legislation ushered in a depression in the newly industrialized export industries, as well as widespread famine among the common people. Dissatisfaction with the Corn Law helped to spur the growth of a political movement, which came to be known as liberalism because of its dedication to individual liberty and free-market capitalism (). Following the onset of a major famine in Ireland in 1845-50, which (directly or indirectly) caused nearly one million deaths, the reactionary legislation was finally repealed in 1846.