“Trade Isn’t War. It’s Peace”

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From The Boston Globe:

Nations don’t trade with each other. We speak as if they do out of habit and convenience, but it’s not true. The United States and Canada are not competing firms. America doesn’t buy steel from China, and China doesn’t buy soybeans from America. Rather, hundreds of individual American companies choose to buy steel from Chinese mills and fabricators, and hundreds of Chinese-owned firms make deals to buy soybeans from far-flung American growers. Unlike wars, which really are fought by nation against nation, international trade occurs among countless sellers and buyers, all acting independently in their own best interest.

Tariffs don’t punish countries. They punish innumerable consumers, wholesalers, importers, exporters, farmers, manufacturers — the myriad discrete actors whose choices and preferences are the true substance of international trade. To those individuals, national trade deficits and surpluses are irrelevant. They aren’t competing — they’re cooperating. Buyers and sellers aren’t in conflict with each other, let alone with each other’s countries.

On the contrary: By doing business together, traders create wealth and connections, knitting the world together in mutual interest, making the planet more harmonious.

Trade war is an insidious term. The metaphor notwithstanding, trade isn’t war. It’s peace.

He’s absolutely right. From my paper currently under review at Economic Affairs:

Using data from the World Bank’s Doing Business rankings and the EFW Index, Michael Strong (2009) finds a close connection between peace, economic liberalization, and business-friendly environments. As a case study, Strong looks to Northern Ireland between 1975 and 2000, determining that the increased economic freedom, the consequential economic boom, and the decrease in violence were interconnected…Using a data set of 243,225 country-pair observations from 1950 to 2000, Lee and Pyun (2016) find that the probability of interstate military conflict is reduced with an increase in bilateral trade interdependence and global trade openness. However, proximity matters, seeing that bilateral trade has a greater peace-promoting effect for neighboring countries, while global trade openness has a greater effect on more distant countries. After analyzing data spanning from 1970 to 2005, De Soysa and Fjelde (2010) find that higher economic freedom lowers the risk of civil war. This corresponds with a later study by De Soysa and Flaten (2012), which finds that higher levels of globalization (particularly economic globalization) reduce the risk of civil war as well as state violations of human rights. Other research finds that free-market conditions and economic liberalization are associated with lower levels of various societal insecurities, including open armed conflict, violent crime, murder, societal militarization and political instability (Stringham & Levendis, 2010; Bjornskov, 2015; De Soysa, 2011, 2016).