But if we forswear military intervention in other countries, are there any tools left to affect the world in a positive way? Yes, and one of the main ones is free trade. In 1750, the Baron de Montesquieu, whose philosophy influenced the Founding Fathers, opined that “the natural effect of commerce is to bring peace.” More recently, economists Solomon W. Polachek of SUNY Binghamton and Carlos Seiglie of Rutgers have shown that a doubling of trade between two nations leads to a 20 percent decline in belligerence between those two nations.
So we as Americans can help the world become a more peaceful place by supporting free trade and by engaging in trade ourselves.
Furthermore, as Professor Tucker points out, we should not worry about whether “Canada and Mexico get a greater advantage from our mutual trade than we do” because both sides gain from trade. He should have gone further. The greater gains from trade for Mexico and Canada are not, as he says, “a small price to pay for their good will.” They are not a price at all. Again, both sides gain.
If we forswear military intervention in other countries’ affairs, there will be times, to be sure, when we see bad things happening around the world that our government could have had the power to change. That is, to paraphrase the 19th century French economist Frederic Bastiat, what’s seen. What is unseen is the often bad consequences to ourselves–and to people in other countries–of U.S. intervention. So let’s get rid of a grand strategy for the U.S. government and substitute our own strategy of peace and liberty.
This is the closing section of my “War-Fighting and the Loss of Liberty” at our sister site, Law and Liberty, June 11, 2018.
Read the whole thing.
READER COMMENTS
Mactoul
Jun 12 2018 at 2:58am
One can’t forget the example of a highly integrated Europe–the English capital financing German industry, the German capital in turn financing Russian–throwing it all away in an orgy of competitive imperialism.
But perhaps the nations were different then. The European world wide empires were not won in a spirit of peaceable coexistence and thus all the European governments and people too tended to be rather jingoistic.
Is the number result of some kind of model or is it derived from some historical data?
CZ
Jun 12 2018 at 7:51am
The fundamental cause of the world wars was relatively human capital-rich but resource-poor countries like Germany and Japan seeking autarky through aggressive expansion because they feared being cut off from the global trade on which they depended. Fundamentally, Japan saw Manchuria and Germany saw Eastern Europe as breadbaskets for food they could not grow at home and could not import if the UK and US cut off their trade. The UK and France had the same pressures, but were able to relieve them through colonialism. Therefore, a stable global trading order where free trade is guaranteed to all countries would have prevented the world wars, because Germany and Japan would always have been assured that they would be able to import whatever food and chemicals they needed.
This is a lesson we are losing today, as US policy such as aggressive use of sanctions is driving China to pursue more autarky, which requires expansion because China also has few natural resources relative to its human capital. The result will be a more aggressive China and greater risk of war.
Andrew_FL
Jun 12 2018 at 9:32am
This seems like a very good strategy for keeping peace between democracies, but a very misguided approach to keeping peace between democracies and Communist dictatorships or Islamic theocracies.
In democracies the actions of the government are motivated, generally speaking, by a perceived (though don’t get me wrong, very often mistaken) concept of the welfare of the whole people. Democracies will not do anything, generally speaking, that obviously and inarguably harms majority of the voting population-for if they do, the people will elect a different set of representatives or vote for different policies (again, don’t get me wrong, this doesn’t mean they don’t inadvertently or subtly do harm to the majority). The main difference with Communist dictatorships or Islamic theocracies, is that their actions are not motivated by attempting to do for the people what they themselves think is best for themselves, but by some overriding ideology. You cannot reason about the benefits of peace and cooperation with a Marxist who demands nothing less than a global destruction of capitalism, or with a religious fanatic who regards you as an infidel.
SaveyourSelf
Jun 12 2018 at 11:42am
David Henderson is making a causal argument in the conclusion of his article, that free trade reduces the likelihood of war. Furthermore, he is arguing that raising barriers to trade will increase the risk of war. Here is his evidence: “In 1750, the Baron de Montesquieu, whose philosophy influenced the Founding Fathers, opined that “the natural effect of commerce is to bring peace.” More recently, economists Solomon W. Polachek of SUNY Binghamton and Carlos Seiglie of Rutgers have shown that a doubling of trade between two nations leads to a 20 percent decline in belligerence between those two nations.”
That evidence is, unfortunately, weak, so what follows is merely academic.
If we accept the causal associations between trade and war as true, then an argument exists that violence committed against those who produce policies that reduces free trade might qualify as peacemaking. Additionally, targeted physical removal of foreign leaders who endorse restrictive trade policies might qualify as self-defense.
War, even if unlikely, has such an enormous societal cost that it’s future probability qualifies as a ‘fat tail’ problem–in Nassim Taleb terminology–which gives a natural, logical, and reasonable overweighting of decisions designed to reduce the risk of its occurrence even if that risk is low to begin with. Thus even a small increase in the probability of war in the future might justify actual intervention against a small number of people in the present, if the causal association between war and free trade was reliable.
That said, the majority of David Henderson’s article argues against violent intervention elsewhere in the world. Citing, for example, that “University of Chicago political scientist Robert Pape, who compiled a complete list of suicide terrorist attacks from the early 1980s to 2003, found that 95 percent of them were in response to a military occupation.”
Questions such as violent intervention against violent offenders are not dangerous when posed to libertarians. Violence is antithetical to markets. Free trade advocates are almost certainly free market proponents. The ‘free’ in those terms specifically means ‘free from violence except for justice’. That said, trade barriers are literally violent acts. Armed soldiers at the borders enforce trade barriers. Increasing barriers to trade, therefore, is an act of aggression against someone. This is a confounder we must consider in the causal story about free trade. Does free trade decrease the likelihood of war? Or does the violence of enforcing trade barriers increase the likelihood of retaliatory violence that can escalate to war? Or can both be true?
The limits of knowledge in complex systems favors lack violent intervention even if the causal relationship between trade barriers and war is true or free trade and peace is true. But there will be a day when our understanding of markets reaches a point where violence introduced into markets may rightly result in violent reaction under the auspices of justice, self-defense, the greater good, and even the golden rule.
Mike Sandifer
Jun 12 2018 at 12:14pm
When other countries practice realpolitik, there’s no choice but to do likewise, lest one allow for unfavorable balances of power that mean desperate circumstances, rather than judicious discretion, determine the shape and timing of the exercise of power.
Consider the case of the second world war.
David R Henderson
Jun 12 2018 at 12:51pm
@Mike Sandifer,
Consider the case of the second world war.
Yes. I do. Please read my article.
Jon Murphy
Jun 12 2018 at 2:00pm
An excellent article. I agree completely about the peaceful capabilities of free trade. Indeed, one of the things that brought a hard-left person like I used to be to free markets is its peaceful nature and increase to the costs of war.
EB
Jun 12 2018 at 4:08pm
David, you relate two different issues but it’s better to discuss them separately. The first one is how the U.S. government can contain threats of violence against (a) Americans and (b) non-Americans. Like or not, Americans will always be threatened and the basic responsibility of the U.S. government is to protect them (the threats will not depend on trade; the Cold War never was about trade). Future threats will be coming from foreigners that seek revenge, or blame the U.S. for their poverty, or want part of American wealth, but whatever the reason the relevant question is how to deal with threats. Also, you can argue a lot about different types of threats, but again you know there are some that the government should be ready to deal with. Please tell me how.
Unfortunately for Trump and future presidents, the U.S. has promised to protect some non-Americans in cooperation with the governments of several countries. You may argue for terminating those promises, but tell me about the transition because you cannot expect those governments to take over full responsibility at short notice. In addition, you cannot ignore some broad and vague commitments to protect human rights everywhere, and again you should be clear about how to terminate or limit them.
The second is what the U.S. government should do for the benefit of Americans under the assumption that future governments want to minimize its intervention (otherwise your problem would be how to contain future U.S. governments). The problem has a clear solution: work hard to persuade others to vote for Libertarians and hope for the best, but be ready for the worst. I assume that Libertarians will have to revise their message so I suggest that whenever you discuss trade “in general” don’t say that both parties benefit from it because, albeit true, one party may feel that it can get a larger one (as Churchill said and Trump now repeats “let us haggle about the price”).
Tao of Gaming
Jun 14 2018 at 12:43am
It feels like there is an interesting moral argument here. Whether you assume that you have a duty to help the less fortunate or not, there is a fairly strong consensus that if you can help others without incurring a cost you should definitely do it.
So, if you could help others while actually benefitting, is that not an even bigger moral imperative? So, rather than “Mexico gains more from the US” the argument becomes “We are helping poorer countries, so even if we took a small loss it would be moral; but we are in fact earning some positive gain.”
How moral would you consider someone who stopped someone from putting money in a beggar’s cup, or giving them a job? That should be the argument for free trade.
Mike W
Jun 16 2018 at 12:40pm
It seems that Professor Tucker’s alternative to military intervention is not so much “free trade” as it is “selective engagement”.
“Currently, we are caught between a mirage and a mistake, their harm compounded by the view on the Left that America should withdraw from the world because we are not good enough for it, and the view on the Right that we should build walls because the world is not good enough for us. The alternative principle to either of these extreme views—selective engagement—rests on an assessment more forgiving of both ourselves and the world.”
But, as Barry Posen points out:
Selective engagement has its own problems. First, the strategy lacks a certain romance: will the cool and quiet, steady, long-term exercise of U.S. power in the service of stable great power relations win the political support of any major constituency in the United States? Compared to other strategies, there is relatively little idealism or commitment to principle behind the strategy.
Second, the strategy expects the United States to ignore much of the trouble that is likely to occur in the world. America’s prestige and reputation might suffer from such apparent lethargy, however, which could limit its ability to persuade others on more important issues.
Third, selective engagement does not provide clear guidance on which ostensibly “minor” issues have implications for great power relations, and thus merit U.S. involvement.
Fourth, selective engagement is not as selective as its advocates would have us believe. Europe and Asia matter because that is where the major powers reside; and the Middle East matters because of its oil resources. Much of the world, therefore, matters.
Finally, neo-isolationists would argue that there is one huge tension in the selective engagement argument. The United States must maintain substantial military forces, threaten war, and risk war largely for the purpose of preventing war.
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