Wednesday, September 13, 2006

War is bad for business

I wrote previously on the link between democratisation and peace. Here is a good article by Llewellyn H. Rockwell, Jr. on how commerce has the potential to thaw relations between the United States and China:
"It was Bastiat who observed the trade-off between trade and war. When goods don't cross borders, he said, armies will. Without trade, there is less to lose from the mass destruction that war implies. Countries that trade have a mutual stake in the preservation of open, friendly relations. This is one reason that free commercial activities promote peace, and why protectionism and trade sanctions generate war tensions."
Economics is becoming increasingly important.

3 Comments:

At September 14, 2006 11:36 pm, Anonymous mikey said...

In the real world tha'ts not always true, I reckon.

If trade relations are uneven, as they nearly always are, his promotes discontentment, not harmony. The recen history of Latin America is a good example.

The stand-off between Bush and Chavez is not just about socialism vs 'capitalism'(no matter how hard Bush spins it.) It's also abou Venezuelans feeling ripped off by the terms of trade and voting accordingly.

 
At September 15, 2006 9:55 am, Blogger Sukrit Sabhlok said...

Trade relations are rarely 'uneven', in economic terms. If Venezuela (or America for that matter) completely abolishes tariffs, quotas and subsidies it's consumers who will be better off, regardless of whether the other countries they are trading with do the same. In other words, complete free trade is fair trade - because it's the ordinary people who benefit from lower prices and better quality products...thus improving standard of living.

 
At September 18, 2006 3:11 am, Anonymous mikey said...

I agree that its not a zero sum game, at least economically speaking. But, I don't agree that when two countries with vastly different purchasing power (for example) give each other the same concessions, that the consumers of the weaker country are neccesarily better off (even economically speaking.)

And I don't agree that is the norm for the stronger party to give up similar conditions. The Aus/US free trade agreement is exhibit A. But, then, I never studied economics :-)

 

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