Tweet [1]
In this nice and very careful paper [2] in the Fall 2004 issue of The Independent Review [3], University of Bonn sociologist Erich Weede reviews and summarizes the literature on trade’s effect on promoting peace.
Here’s his conclusion:
Critics of globalization not only forget both the benefits of free trade and globalization for developing countries and for their poor and under-employed workers and the benefits of free trade to consumers everywhere, but they know almost nothing about the international-security benefits of free trade. Quantitative research has established the viability and prospect of a capitalist peace based on the following causal links between free trade and the avoidance of war: first, there is an indirect link running from free trade or economic openness to prosperity and democracy and ultimately to the democratic peace [the empirically supported claim that democracy reduces a nation’s risks of going to war with other democratic nations]; second, trade and economic interdependence by themselves reduce the risk of military conflict. By promoting capitalism, economic freedom, trade, and prosperity, we simultaneously promote peace.
It’s a solid rule of business: don’t kill your customers or your suppliers.