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Trade Promotes Peace

Here’s a letter to the Wall Street Journal:


Correctly noting that the Nixon administration’s decision to thaw U.S. relations with Beijing was driven largely by considerations of geopolitics rather than of economics, Bob Denmark rhetorically asks if it is “wise to risk sacrificing the gains of the former for improvement of the latter” (Letters, Jan. 9).

Mr. Denmark’s question is premised on a fallacy. No trade-off exists between peaceable geopolitical and economic considerations. The more full is the economic integration of the Chinese people with the American people, the more empty are worries that the government of either country will risk a shooting war with the other.

Today’s so-called “trade hawks” ceaselessly insist that only by exporting to the west have the Chinese grown wealthier – a proposition that is true, but only because of the goods and services, many of which are inputs, that the Chinese receive from America and other countries in return for their exports. A shooting war would not only disrupt the highly efficient supply chains that have emerged over the past few decades to the benefit of producers in both countries, it would also separate producers in each country from their customers in the other.

Trade doesn’t guarantee peace, but it does make peace more likely. And so if the U.S. government truly wants to further reduce the prospects of a shooting war with China it ought to tear down – rather than build up – the barriers that it now uses to obstruct American-Sino trade.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030