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.
http://en.wikipedia.org/wiki/Events_leading_to_the_attack_on_Pearl_Harbor
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.
So...where did our jobs go?
“The deadliest war in our history was between two free-trade partners: the northern and southern halves of the United States.”
A fact CATO would prefer to ignore. And Germany was the main trading partner of France and Britain prior to WWI.
Citing the Morrill tariff reinforces Eel’s point, not yours. That tariff imposed no taxes on north-south trade. In order to fit CATO’s argument war should have broken out between America and a foreign power affected by the tariff, not between two sections of the United States.
“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.”
“I don’t know much about history” - Sam Cooke, 1958
Rabscuttle is making reference to Commodore Perry compelling Japan to begin trading in 1854. Prior to that Japan was happily isolationist and not threatening anyone. Had they been left to stew in their own juices there might not have been a Pearl Harbor. You can’t embargo someone who is isolationist by choice.
Don't even believe the free trader if they told you. They classify 'frozen pizza' production as manufacturing.
And they won't answer what's to happened to the unemployed.
Don't even believe the free trader if they told you. They classify 'frozen pizza' production as manufacturing.
And they won't answer what's to happened to the unemployed.
“A fact CATO would prefer to ignore. And Germany was the main trading partner of France and Britain prior to WWI.”
Germany became increasingly protectionist during the Nazi regime. So did England. Most countries did during the Great Depression.
“So...where did our jobs go?”
Jobs are created and destroyed regularly in the economy. You may as well complain that all of the stagecoach driving jobs are gone, that all of the horse grooming jobs are gone, that all of the dung-gathering jobs are gone.
Does it bother your if your job is taken by somebody else in your town if they can do it more efficiently than you can? I imagine so—nobody likes losing a job—but would you think that the government needs to step in and stop your employer from trying to be as efficient as possible, at making a profit, and at providing goods and services to consumers at the lowest price possible?
Would it bother you if your job was taken by somebody in another country? Why? What’s the difference whether they are your neighbor or somebody in another hemisphere? That the work gets done, is what’s important. The increasing exportation of labor-intensive manufacturing is a sign of increasing prosperity, not decreasing prosperity.
Horsehockey. The jobs I’mt talking about still exist, they just exist somewhere else with a lower standard of living.
Let me explain it to you in little words and short sentences.
The Morrill Tariff affected international trade.
Trade between the States isn’t international.
Ergo the Morrill Tariff had no effect on domestic trade.
That should be easy enough for even you to follow. Well, maybe not. Get your dad to explain it to you.
” “You can’t embargo someone who is isolationist by choice.” If you had read the link I provided you would have spared yourself the embarrassment of being wrong: “In 1940 Japan invaded French Indochina “
You know, if I didn’t already know you to be a dunce I would think that you were putting me on. Unfortunately you’re not. But let’s try this again, and see if I can make the explanation simpler for you. Maybe you’ll even learn a bit of history in the process, assuming that you are capable of learning, which has yet to be demonstrated.
Rabscuttle was making reference to an event some 85 years before FDR’s embargo and WWII. It was the opposite of an embargo. That means “not an embargo”, just to stress the point. That event was the forced opening of Japan’s ports by Commodore Peary in 1854.
This forced Japan to trade with the rest of the world, something it hadn’t been doing for 200 years. During those years of isolation Japan had posed no problem to its neighbors. Once Japan was roused from its splendid isolation thanks to a zealous imposition of trade, that all changed.
In appreciative imitation of Commodore Peary Japan first eyed Korea, forcing them to open themselves to Japanese trade. This led to conflict with China, and by 1894 Japan and China were at war. Japan sank the Chinese fleet and ended up with Korea and a chunk of Chinese territory as well.
Japan’s expansion brought it into conflict with Russia, which resulted in another war by 1905. Japan sank the Russian fleet, and basically established itself as the major power in the western Pacific. This led to a second war with China in 1937, and eventually the greater Pacific War that ended with atomic bombs.
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.
“Germany became increasingly protectionist during the Nazi regime. So did England. Most countries did during the Great Depression.”
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.
Daniel T. Griswold is the associate director of the Center for Trade Policy Studies at the Cato Institute in Washington. Added to cato.org on December 31, 1998
This article appeared on cato.org on December 31, 1998.
Eleven year old article, eleven more years of lopsided anti-American, pro-global-communist Free Traitor agreements.
And look at the wonderful condition of our economy. You certainly can't blame it on the lack of "free trade" agreements, no protectionism to blame (at least not USA protectionism).
All these experts at Cato need to be hanged right alongside the Democrats, RINOs, and the Wall Street thieves.
The reality is that purist economic theories exist in vacuums, totally divorced from all the sectors of the real world they supposedly "study". 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.
Real life is more complex than their laboratories and think tanks.
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.
“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.
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.
Thank you! That is very pretty. Merry Christmas and blessings in tne New Year to you and your family.
I’ve always wo ndered why FAIR TRADE is no longer considered an option.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.