Advocates of free trade have long argued that its benefits are not merely economic. Free trade also encourages people and nations to live in peace with one another. Free trade raises the cost of war by making nations more economically interdependent. Free trade makes it more profitable for people of one nation to produce goods and services for people of another nation than to conquer them. By promoting communication across borders, trade increases understanding and reduces suspicion toward people in other countries.
International trade creates a network of human contacts. Phone calls, emails, faxes and face‐to‐face meetings are an integral part of commercial relations between people of different nations. This human interaction encourages tolerance and respect between people of different cultures (if not toward protectionist politicians).
Ancient writers, expounding what we now call the Universal Economy Doctrine, understood the link between trade and international harmony. The fourth‐century writer Libanius declared in his Orations (III), “God did not bestow all products upon all parts of the earth, but distributed His gifts over different regions, to the end that men might cultivate a social relationship because one would have need of the help of another. And so He called commerce into being, that all men might be able to have common enjoyment of the fruits of the earth, no matter where produced.”
Open trade makes war a less appealing option for governments by raising its costs. To a nation committed to free trade, war not only means the destruction of life and property. It is also terrible for business, disrupting international commerce and inflicting even greater hardship on the mass of citizens. When the door to trade is open, a nation’s citizens can gain access to goods and resources outside their borders by offering in exchange what they themselves can produce relatively well. When the door is closed, the only way to gain access is through military conquest. As the 19th century Frenchman Frederic Bastiat said, “When goods cannot cross borders, armies will.”
History demonstrates the peaceful influence of trade. The century of relative world peace from 1815 to 1914 was marked by a dramatic expansion of international trade, investment and human migration, illuminated by the example of Great Britain. In contrast, the rise of protectionism and the downward spiral of global trade in the 1930s aggravated the underlying hostilities that propelled Germany and Japan to make war on their neighbors.