[Paleopsych] CATO: Peace on Earth? Try Free Trade among Men

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Peace on Earth? Try Free Trade among Men
December 28, 2005

[I agree with this completely, even though I have only scanned it. I know 
where the article is coming from, that's all. I should ask, though, 
whether the free movement of goods will entail irresistable pressure for 
the free movement of people. It's the people that generate externalities, 
some positive but (in the United States) mostly negative. There is a 
debate among libertarians whether to keep the ideal of the free movement 
of people at bay until such time as immigrants will stop using their votes 
to enrich themselves and limit liberty. (Dumbing down the population is 
apparently not on their radar screen.)

[The pressure is not irresistable in Japan and Israel, but the Japanese 
think they are utterly and biologically unique among the world's people 
and the Jews have intense ingroup solidarity.

[I also add that the Internet is another powerful force for peace. Those 
that communicate with one another will resist fighting, just as those who 
want to keep trade moving.

[The old days where socialists were convinced that "capitalism" causes war 
by enriching arms manufacturers are not gone. They have been replaced with 
oil companies. How oil imports, which amount to less than one percent of 
GDP can exert this much pressure is not clear to me.

[The author is only mildly right about capitalism being a force for 
expanding "democracy," very much like sociologists are only mildly right 
about modernization bringing secularization. The Chinese, so far, are 
proving to be a counter-example.]

by Daniel T. Griswold

Daniel Griswold is director of the Cato Institute Center for Trade
Policy Studies.

Buried beneath the daily stories about car bombs and insurgents is an
underappreciated but comforting fact during this Christmas season: The
world has somehow become a more peaceful place.

As one little-noticed headline on an Associated Press story recently
reported, "War declining worldwide, studies say." According to the
Stockholm International Peace Research Institute, the number of armed
conflicts around the world has been in decline for the past
half-century. In just the past 15 years, ongoing conflicts have
dropped from 33 to 18, with all of them now civil conflicts within
countries. As 2005 draws to an end, no two nations in the world are at
war with each other.

The death toll from war has also been falling. According to the AP
story, "The number killed in battle has fallen to its lowest point in
the post-World War II period, dipping below 20,000 a year by one
measure. Peacemaking missions, meanwhile, are growing in number."
Those estimates are down sharply from annual tolls ranging from 40,000
to 100,000 in the 1990s, and from a peak of 700,000 in 1951 during the
Korean War.

Many causes lie behind the good news -- the end of the Cold War and
the spread of democracy, among them -- but expanding trade and
globalization appear to be playing a major role. Far from stoking a
"World on Fire," as one misguided American author has argued, growing
commercial ties between nations have had a dampening effect on armed
conflict and war, for three main reasons.

First, trade and globalization have reinforced the trend toward
democracy, and democracies don't pick fights with each other. Freedom
to trade nurtures democracy by expanding the middle class in
globalizing countries and equipping people with tools of communication
such as cell phones, satellite TV, and the Internet. With trade comes
more travel, more contact with people in other countries, and more
exposure to new ideas. Thanks in part to globalization, almost two
thirds of the world's countries today are democracies -- a record

Second, as national economies become more integrated with each other,
those nations have more to lose should war break out. War in a
globalized world not only means human casualties and bigger
government, but also ruptured trade and investment ties that impose
lasting damage on the economy. In short, globalization has
dramatically raised the economic cost of war.

Third, globalization allows nations to acquire wealth through
production and trade rather than conquest of territory and resources.
Increasingly, wealth is measured in terms of intellectual property,
financial assets, and human capital. Those are assets that cannot be
seized by armies. If people need resources outside their national
borders, say oil or timber or farm products, they can acquire them
peacefully by trading away what they can produce best at home.

Of course, free trade and globalization do not guarantee peace.
Hot-blooded nationalism and ideological fervor can overwhelm cold
economic calculations. But deep trade and investment ties among
nations make war less attractive.

Trade wars in the 1930s deepened the economic depression, exacerbated
global tensions, and helped to usher in a world war. Out of the ashes
of that experience, the United States urged Germany, France, and other
Western European nations to form a common market that has become the
European Union. In large part because of their intertwined economies,
a general war in Europe is now unthinkable.

In East Asia, the extensive and growing economic ties among Mainland
China, Japan, South Korea, and Taiwan is helping to keep the peace.
China's Communist rulers may yet decide to go to war over its
"renegade province," but the economic cost to their economy would be
staggering and could provoke a backlash among Chinese citizens. In
contrast, poor and isolated North Korea is all the more dangerous
because it has nothing to lose economically should it provoke a war.

In Central America, countries that were racked by guerrilla wars and
death squads two decades ago have turned not only to democracy but to
expanding trade, culminating in the Central American Free Trade
Agreement with the United States. As the Stockholm institute reports
in its 2005 Yearbook, "Since the 1980s, the introduction of a more
open economic model in most states of the Latin American and Caribbean
region has been accompanied by the growth of new regional structures,
the dying out of interstate conflicts and a reduction in intra-state

Much of the political violence that remains in the world today is
concentrated in the Middle East and Sub-Saharan Africa -- the two
regions of the world that are the least integrated into the global
economy. Efforts to bring peace to those regions must include lowering
their high barriers to trade, foreign investment, and domestic

Advocates of free trade and globalization have long argued that trade
expansion means more efficiency, higher incomes, and reduced poverty.
The welcome decline of armed conflicts in the past few decades
indicates that free trade also comes with its own peace dividend.

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