Skip to comments.Peace On Earth, Free Trade For Men
Posted on 12/24/2009 9:01:44 PM PST by rabscuttle385
With the Christmas season and its promise of "Peace on earth, goodwill toward men" upon us, and protectionist sentiment stirring in Washington, it is appropriate to revisit the question of whether free trade promotes world peace.
Advocates of free trade have long argued that its benefits are not merely economic. Free trade also encourages people and nations to live in peace with one another. Free trade raises the cost of war by making nations more economically interdependent. Free trade makes it more profitable for people of one nation to produce goods and services for people of another nation than to conquer them. By promoting communication across borders, trade increases understanding and reduces suspicion toward people in other countries.
International trade creates a network of human contacts. Phone calls, emails, faxes and face-to-face meetings are an integral part of commercial relations between people of different nations. This human interaction encourages tolerance and respect between people of different cultures (if not toward protectionist politicians).
Ancient writers, expounding what we now call the Universal Economy Doctrine, understood the link between trade and international harmony. The fourth-century writer Libanius declared in his Orations (III), "God did not bestow all products upon all parts of the earth, but distributed His gifts over different regions, to the end that men might cultivate a social relationship because one would have need of the help of another. And so He called commerce into being, that all men might be able to have common enjoyment of the fruits of the earth, no matter where produced."
Open trade makes war a less appealing option for governments by raising its costs. To a nation committed to free trade, war not only means the destruction of life and property. It is also terrible for business, disrupting international commerce and inflicting even greater hardship on the mass of citizens. When the door to trade is open, a nation's citizens can gain access to goods and resources outside their borders by offering in exchange what they themselves can produce relatively well. When the door is closed, the only way to gain access is through military conquest. As the 19th century Frenchman Frederic Bastiat said, "When goods cannot cross borders, armies will."
History demonstrates the peaceful influence of trade. The century of relative world peace from 1815 to 1914 was marked by a dramatic expansion of international trade, investment and human migration, illuminated by the example of Great Britain. In contrast, the rise of protectionism and the downward spiral of global trade in the 1930s aggravated the underlying hostilities that propelled Germany and Japan to make war on their neighbors.
In the more than half a century since the end of World War II, no wars have been fought between two nations that were outwardly oriented in their trade policies. In every one of the two dozen or so wars between nations fought since 1945, at least one side was dominated by a nation or nations that did not pursue a policy of free trade.
In the recurring Middle East wars between Israel and its Arab neighbors, dating back to 1948-49, none of the direct participants were what could be described as open economies at the time of conflict, with the Arab countries enforcing a virtual boycott of trade with Israel. Saddam Hussein, the instigator of the 1991 Persian Gulf War, could be described in many ways, but not as a free trader.
Wars have been fought between members of the General Agreement on Tariffs and Trade, but only when at least one of the warring sides was protectionist in its trade policies. For example, India and Pakistan were both members of GATT during their 1965 and 1971 conflicts, but they were also both committed to protection as a trade policy. Great Britain and Argentina were members of GATT when they fought over the Falklands in 1982, but Argentina, the aggressor in that conflict, was at the time still under the protectionist spell of Peronism.
After the nightmare of two world wars, the United States encouraged the nations of Western Europe to form a free-trade area not only to promote economic development but also to reduce international rivalries. Decades of trade liberalization have helped to make war among members of the European Union virtually unthinkable today or in the foreseeable future.
A growing web of international investment has also strengthened peace among nations. New York Times columnist Thomas Friedman has pointed out what he calls the Big Mac thesis: that no two nations with McDonald's franchises have ever gone to war. A nation open enough and developed enough to be a profitable home for an established international franchise such as McDonald's will generally find war an unattractive foreign policy option.
Of course, free trade does not guarantee peace, just as protectionism does not guarantee war. Enduring human vices such as greed, envy, racism and intellectual hubris, combined with the power of government, can overwhelm the beneficial influence of peaceful commerce. But free trade among nations does make war less likely, bringing us a step closer to the promise of peace on earth recorded 2,000 years ago.
this story is garbage
Here. Have some rotten eggs and rotten tomatoes.
But, fair trade is far more important than free trade (for everyone except CATO). I just read in Automotive News that the Japanese have instituted its own cash for clunkers program. Naturally American nameplates are not eligible.
Sarah Palin would be well-advised to continue to avoid airheads in think tanks, most of whom are totally divorced from the real world and have never held a real job in their lives.
That is a great essay. Others have said that protection is when we do to ourselves in peacetime what our enemies would do to us in war.
This article is rubbish. The author conflates “free” trade with trade. His piece trumpets the benefits of commerce generally, without even touching on the details of the subject he pretends to be discussing—”free” trade, which I take to mean duties and imposts on imports relative to those placed on our exports.
James Madison, on the tranfer of the regulation of trade from the states to the general government.
The deadliest war in our history was between two free-trade partners: the northern and southern halves of the United States.
Trade brought 19 cetury Japan out of the middle ages . . .
Just in time for Pearl Harbor.
And to think Japan didn’t want to trade with us, until we forced them to.
Good point. Oh wait, you didn’t make a point, you just attacked.
So by advocating peace and cooperation they are prostituting Christmas? And you and the other “fair trade” protectionists are wrong. Dead wrong, in fact. Study economics before you give your opinion on it. Free unfettered trade between nations benefits everybody concerned. I’ve made the same points so many times on FR arguing with the “fair trade” protectionists that I just don’t have it in me.
Let Japan implement their own wealth-destroying “cash for clunkers” program. It will hurt them just as our own program hurt us.
Economists are not divorced from the real world, on the contrary they are steeped in real world data from morning til night. It is people like you, who have limited anecdotal experience rather than broad empirical data, assumptions rather than facts, who do not live in the real world.
Frankly, it doesn’t sound like *you* know what you’re talking about? What are you talking about?
That is a political opinion, that is not economics. Economics has been clear on this since the days of Adam Smith: protectionism fails, free trade wins. You can balk, but the track record of protectionism is one of recession, depression, inefficiency, waste, poverty, and want.
There was an embargo. When countries are dependent on each other economically, it is too costly to go to war. When they allow embargoes, protectionism, etc. to reign, hostilities are given a voice.
There are a lot of protectionist stooges on FR, so bravo for posting this.
Too many people here have fallen for the long-debunked fallacy of protectionism, of thinking that free trade “hurts” their nation by selling them things that they want.
What is truly appalling is that for every dollar of goods an American spends on Japanese goods, somebody in Japan HAS to spend a dollar on *something* in America. That’s how currency exchanges work. And yet these boobs continue to fall hook, line, and sinker for the lies.