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Peace On Earth, Free Trade For Men
CATO ^ | 1998-12-31 | Daniel Griswold

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.

TOPICS: Business/Economy; Editorial; Foreign Affairs
KEYWORDS: bho44; bhotrade; cato; freetrade; peace; trade
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To: Pelham
"So while it’s nice that you know about FDR and his oil embargo, maybe you should also consider that forcing Japan to open its markets didn’t turn out to be such a peaceful endeavor for the rest of the world. It was more like poking a nest of fire ants with a stick." So let me get this straight, you hope to disprove the notion that "if goods don't cross borders, soldiers will," by providing a historical instance where exactly that happened?
41 posted on 12/26/2009 11:31:44 PM PST by LifeComesFirst (
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To: Pelham
"Yes, that’s all very nice. But what I wrote was WWI. That’s the Great War, which took place from 1914 to 1919. I realize that your understanding of history is a bit hazy at best, so you may not know that a major European war took place nearly two decades before the Depression and the Nazi Party’s rise to power. Nice try though. Keep cracking those books." Bismarck put protectionist policies into place too.
42 posted on 12/26/2009 11:40:41 PM PST by LifeComesFirst (
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To: meadsjn

“You are just the sort of person groups such as Cato need to evangelize their message. You take their theoretical talking points and go forth to spread the gospel, unhampered by any other education or real world experience.”

Do you have one iota of knowledge about what my real world experience is or isn’t?

“The reality is that purist economic theories exist in vacuums, totally divorced from all the sectors of the real world they supposedly “study”.”

Cite an example of such a theory.

“Economists are totally useless, usually worse than useless, when the realities of business, markets, domestic policies, international relations, etc., don’t match up with their theories.”

So you’re lumping all economists in the same boat, huh? Cite some examples.

“Real life is more complex than their laboratories and think tanks.”

Give an example of something economists say that reflects this statement.

“Most of us who have bothered to get real educations actually have studied economics, but as an addition to other fields of study, not as a total replacement of such, along with total rejection of common sense and observation.”

Cite an example of an economist who does not observe.

Of course, anybody who knows anything about science knows that the first thing that must be jettisoned is our common sense, because it is so often wrong. Only observation of empirical data and reason, with a little imagination, can help us. Relying on our intuitions, scientists didn’t discover and could not explain why a thrown object continues to move until let go. It took Newton, with his math and reason, rather than common sense, to discover that an object remains in a state of uniform motion unless acted upon by another force.

Common sense and observation would tell you the Earth is flat, and that the sun moves while the Earth remains motionless. But that’s not scientific, because it relies on one observer in one location assuming that his perspective is king.

Likewise, economists are in the business of seeing the economy as a whole, not from the perspective of one single person, or of a single span of time.

43 posted on 12/26/2009 11:52:05 PM PST by LifeComesFirst (
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To: LifeComesFirst
Since you're spamming your Cato/Ricardo garbage with multiple threads, I'm just going to cut&paste my response from the other one.

You have all your Cato/Ricardo talking points down pat, and all such have been debated and debunked here on FR over the past decade. I'm not going to repeat all of it now. You can do your own searches. Those who have been here all along have watched the actions and results of this manipulated global trade, and the verdict is overwhelmingly against Ricardo style global communism.

Suffice it to say global trade has been running along fairly unimpeded for the past two decades, and the economies of the various affected nations are either already collapsed or close to it.

I don't have to know what your background experience and education is to recognize the same Free Traitor talking points that show up every time some jackleg reads a few Cato web pages and a couple of essays on economics.

Welcome to Free Republic.

44 posted on 12/27/2009 5:45:11 AM PST by meadsjn (Sarah 2012, or sooner)
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To: rabscuttle385

Thank you! That is very pretty. Merry Christmas and blessings in tne New Year to you and your family.

45 posted on 12/27/2009 8:19:01 AM PST by Pining_4_TX
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To: rabscuttle385

I’ve always wo ndered why FAIR TRADE is no longer considered an option.

46 posted on 12/27/2009 8:23:05 AM PST by IM2MAD
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