How free trade promotes global peace
Acton Institute Powerblog

How free trade promotes global peace

Thomas L. Friedman said in The Lexus and the Olive Tree that no two countries with McDonald’s within their borders have ever been in a war since having a McDonald’s. Since it was proposed in 1999 this explanation of how globalization affects foreign policy and conflict has become known as the Golden Arches Theory of Conflict Prevention.

There are several examples that prove Friedman’s theory is wrong (e.g., India and Pakistan in 1998, Georgia and Russia, 2008). But in general, globalization does tend to reduce conflict between nations. As economist Donald Boudreaux says, one of the most important benefits of freer trade and global economic integration is that it promotes increased prospects for peace. Consider, says Boudreaux, China’s warning to North Korea that it won’t come to their aid if they launch missiles threatening the U.S. and there is retaliation:

>Would Beijing have issued the same warning 50 years ago? While the answer is uncertain, it’s plausible to suppose that Beijing back then would have been less likely than today to warn a communist ally not to start a war with the United States. If the United States suffers severe damage from nuclear (or even conventional) weapons, China today has far more to lose than it did under Mao Zedong. Unlike China under Mao, the Chinese today have legions of commercial customers and suppliers in the United States. And a pretty good rule of business is “Don’t kill your customers.” Don’t even be complicit in such killing.

Perhaps we are today reaping one of the unsung benefits of freer trade and the international economic integration that it promotes: a greater reluctance of trading partners to go to war with each other. Maybe, just maybe, the United States’ much-derided economic integration with China will not only continue to enrich the people of both countries materially, but also — and far more importantly — prevent senseless slaughter.

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Joe Carter

Joe Carter is a Senior Editor at the Acton Institute. Joe also serves as an editor at the The Gospel Coalition, a communications specialist for the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and as an adjunct professor of journalism at Patrick Henry College. He is the editor of the NIV Lifehacks Bible and co-author of How to Argue like Jesus: Learning Persuasion from History's Greatest Communicator (Crossway).