Commentary

Trade Brings Security

By Gerald P. O'Driscoll Jr. and Sara J. Fitzgerald
This article was published in the Orange County Register, Feb. 11, 2003.

Here’s a fact that could throw a wrench into the next anti-globalization march (and the next call to arms): The free trade that protestors decry promotes more than just prosperity. A growing body of research suggests it also promotes something much closer to their hearts: Peace.

The evidence has become so strong that President Bush has used it to show why a liberal trade policy is a necessary part of a strong national defense. The latest “National Security Strategy of the United States of America” says free trade and open markets can be as important to securing the peace for the long run as robust military funding.

The document represents new thinking in the government that U.S. security depends on economic success in other countries, that economic and political repression breed poverty, frustration and resentment, and that open markets — as well as open governments and open societies — can alleviate the causes of the terrorist threat against the West.

It is not that poverty causes terrorism. The 19 hijackers of Sept. 11 were chiefly middle class in origin, with 15 coming from oil-rich Saudi Arabia. But the conditions that produce poverty — lack of economic freedom — also produce the sense of hopelessness and despair that breeds resentment.

Terrorist organizations exploit the situation to recruit new members. Meanwhile, the leaders of these countries blame the United States rather than accept responsibility for the policies impoverishing their own people.

As the Bush administration put it in its National Security Strategy document, “economic growth supported by free trade and free markets creates new jobs and higher incomes. It allows people to lift their lives out of poverty, spurs economic and legal reform, and the fight against corruption, and it reinforces the habits of liberty.”

Helping the poor of the world prosper and reinforcing “the habits of liberty” certainly is an attractive alternative to a permanent war against radical Islam. And it would be far less costly.

Despite exceptions, such as Bahrain, most states in the Middle East produce little economic growth for their populations. Even the vast oil supplies usually benefit only the elite.

A report by the World Bank says that 2 billion people — most of them in sub-Saharan Africa, the Middle East and the former Soviet Union — “live in countries that are being left behind.” These countries have failed to integrate with the world economy, failed to knock down barriers to trade and investment flows, failed to establish property rights and, as a result, failed to grow into modern economies.

And, according to research by Edward Mansfield of the University of Pennsylvania and Jon Pevehouse of the University of Wisconsin, that’s a recipe for trouble. Mansfield and Pevehouse have demonstrated that trade between nations makes them less likely to wage war on each other — and keeps internecine spats from spiraling out of control. They also found these trends are more pronounced among democratic countries with a strong tradition of respect for the rule of law.

Countries that trade with each other are far less likely to confront each other on the battlefield than are countries with no trade relationship. And the size of the economies involved doesn’t affect this relationship, which means small, weak countries can enhance their defense capabilities simply by increasing trade with the world’s economic giants.

Experts, including Mansfield and Pevehouse, say intensive trade integration, perhaps more than any other factor, has led to an unprecedented five decades of peace in Western Europe.

The countries of North and South America, they determined, generally have sought to integrate their economies in a variety of trade alliances, and international disputes on both continents tend to have been resolved without war. Conversely, countries of the Middle East and Africa, as well as Eastern Europe, historically have been less active in establishing trade relationships — and more active on the battlefield.

Trade is no substitute for a strong national defense, but the latter can’t guarantee security on its own. Free trade, free markets, and free peoples bring not only prosperity, but also peace. And that’s a goal shared by those who believe in globalization — and those who don’t.

Gerald P. O’Driscoll Jr. is senior fellow at the Cato Institute. Sara Fitzgerald is a trade policy analyst at the Heritage Foundation.