Central to the neoliberal discourse on globalization is the conviction that free trade, more than free movements of capital or labour, is the key to global prosperity. Part of the conviction in free trade that the proponents of globalization possess comes from the belief that economic theory has irrefutably established the superiority of free trade, even though there are some formal models which show free trade may not be the best. Even more powerful for the proponents of free trade, is their belief that history is on their side. A closer look at the history of capitalism, however, reveals a very different story. When they were developing countries themselves, virtually all of today's developed countries did not practice free trade. Rather, they promoted their national industries through tariffs, subsidies, and other measures. Debunking the myth of free trade from the historical perspective demonstrates that there is an urgent need for thoroughly re-thinking some key conventional wisdom in the debate on trade policy, and more broadly on globalization.