Tag: Cold War

Free Trade’s “Peace Dividend”

“Peace on earth, good will toward men” is a phrase we associate with the Christmas season. One bit of good news that you will probably not see in the newspaper or on cable TV over the holiday is that the world in recent decades has actually been moving closer to that ideal, and free trade and globalization have played a role.

In its latest “Trade Fact of the Week,” the pro-trade Democratic Leadership Council reminds us that “The world has become more peaceful.”

Citing a recent report from the Human Security Center in British Colombia, the DLC memo notes that wars are less frequent and less bloody than in decades past. The average annual death toll from armed conflicts has been declining since the 1950s, from an average of 155,000 down to 17,000 in 2002-2008. None of the world’s “great powers” have clashed since the 1969 border conflict between Russia and China, and none of the major European powers have exchanged fire for 65 years—-the longest intervals of peace for centuries.

In Chapter 8 of my 2009 Cato book, Mad about Trade: Why Main Street America Should Embrace Globalization, I describe this phenomenon as “Free Trade’s ‘Peace Dividend’” (pp. 140-143). There are two main ways that globalization promotes peace: The growing network of global trade and investment has raised the cost of war, so that now if two nations go to war, they not only lose soldiers and tax dollars, they also lose markets and cause lasting damage to their economies. Globalization has also reduced the spoils of war by allowing people to acquire resources through peaceful exchange rather than conquest.

The DLC Trade Fact memo shares the credit with decolonization, the end of the Cold War, the spread of democracy, and peacekeeping missions, while also recognizing the contribution of economic openness:

[L]ower trade barriers, more open economic policies, more efficient logistics industries and better communications technology speed up and deepen integration across borders through trade and investment, strengthening mutual interests and reducing reasons for conflict. The [Human Security Center] report suggests that a 10 percent increase in FDI reduces a nation’s chance of international or civil war by about 3 percent, and that globalization reduces the reasons a country might want to fight:

“[T]he most effective path to prosperity in modern economies is through increasing productivity and international trade, not through seizing land and raw materials. In addition, the existence of an open global trading regime means it is nearly always cheaper to buy resources from overseas than to use force to acquire them.”

Eliminating all remaining trade barriers would be one of the best Christmas presents our politicians could give us.

Eisenhower’s Lament

Spurred on by a new release of documents from the archives, the past few weeks have witnessed a renewed interest in the military-industrial complex (MIC), the term forever associated with Dwight David Eisenhower.

Or, at least, that should be the case. Eisenhower – the West Point graduate, career military officer, and hero of World War II – was one of the first to ever use the phrase, in a televised Farewell Address to the nation on January 17, 1961. Over the years, however, the MIC has become a mantra for progressives and left liberals, usually used in tandem with an assault on private enterprise, writ large, or as part of an elaborate conspiracy theory that equates crony capitalism with market economics. The left’s capture of the term has enabled too many on the right to dismiss it out of hand.

That is unfortunate. Dwight David Eisenhower was no liberal; far from it. And though the neoconservatives have attempted to expunge Ike from our collective memory, it is appropriate that his legacy is enjoying yet another revival. For what it’s worth, I’ll be doing my small part, at a half-day conference next month, and throughout 2011, to offer a perspective on the military-industrial complex that might appeal to devotees of limited, constitutional government.

This work will focus not just on Ike’s farewell address, but also on one of his first public addresses, the Chance for Peace Speech, delivered before the American Society of Newspaper Editors in April 1953. Taken together, the speeches highlight two of Eisenhower’s enduring concerns: opportunity costs, money spent on the military cannot be spent elsewhere; and the political and social costs of the United States becoming a garrison state, the creation of a permanent armaments industry, Ike feared, had already precipitated major changes in the nation’s economy, and threatened to change the nation itself.

Speaking in January 1961, during one of the darkest periods of the Cold War, Eisenhower viewed the MIC as a necessary evil. He viewed the threat posed by the Soviet Union and its sometime communist allies as sufficient justification for maintaining a large standing army, and a vast and technologically advanced Air Force and Navy. He also presided over a dramatic expansion of the nation’s nuclear arsenal, and realized (belatedly) that he had far too little control over those weapons and the men tasked with using them.

But I suspect that the permanence of the MIC would be most disturbing to President Eisenhower, were he with us now. Twenty years after the collapse of the Soviet Union, Americans today spend more on the military than at any time since World War II, and more than twice as much – in inflation-adjusted dollars – than when Ike left office. The general-president clearly failed to convince his fellow Americans of the need to limit the military’s growth. For all practical purposes, the MIC won.

Here’s hoping that many Americans will rediscover Eisenhower, and take heed of his warning, starting in 2011. They could start by supporting efforts to refocus our military on a few core objectives and reduce the Pentagon’s budget.