Does Comparative Advantage Stand in the Way of Perpetual Peace?
By Bryan Caplan
Premise 1: There will always be individuals and groups whose comparative advantage is plunder and extortion. Call them pirates.
For any conceivable activity there is always, by definition, someone with a comparative advantage in it. So far, so good. However, this does not imply that every activity will actually be performed! Someone, somewhere has a comparative advantage in making silent movies, but that does not imply that anyone will pursue this occupation or continue producing silent movies. Similarly, someone, somewhere, has a comparative advantage in hunting bears with his bare hands, but it doesn’t mean anyone will actually do so. This point underlies my claim that wealth turns men into cowards: Rich people rarely hunt bears with their bare hands, or risk their lives attacking other people.
Premise 2: Private property ultimately depends on the willingness and ability to use force to defend it. Capitalism that is not backed by the force of arms cannot survive. Peace only prevails where and when the absolute military advantage of the armed capitalists is sufficient to suppress the pirates.
This sounds like solid hard-headed Hobbesianism, but again, it’s deeply misleading. In the modern world, how many wars are fought for material gain, anyway? Leaving aside a few Third World countries with valuable natural resources, modern wars don’t pay. The history of post-war Germany is a beautiful example of the deep lesson that it is now cheaper to pay for goods than fight for them.
All we need for world peace, then, is for (a) People to recognize that war doesn’t pay and/or (b) Get so rich that they’re scared to fight even if they falsely believe that it does pay.
And if this seems Utopian, look at the EU. The citizens of dozens of countries that fought like mad for centuries have settled into a peaceful bourgeois existence. (And if you want to bet that peace on the Continent is temporary, I’m open to another bet).
Premise 3: Pirates will always find places, circumstances, and methods with which to challenge armed capitalists.
See the critique of Premises 1&2.
Bottom line: Arnold’s argument proves too much. The plain fact is that economic progress and international peace have long been expanding hand-in-hand. All I’m doing is projecting this progress into the future. Arnold almost seems to be denying that this progress is possible.