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Capitalist peace

April 28, 2023

The capitalist peace, or capitalist peace theory, or commercial peace, posits that market openness contributes to more peaceful behavior among states, and that developed market-oriented economies are less likely to engage in conflict with one another.[1] Along with the democratic peace theory and institutionalist arguments for peace, the commercial peace forms part of the Kantian tripod for peace.[2] Prominent mechanisms for the commercial peace revolve around how capitalism, trade interdependence, and capital interdependence raise the costs of warfare, incentivize groups to lobby against war, make it harder for leaders to go to war, and reduce the economic benefits of conquest.[3]

Scholars have debated the empirical and theoretical validity of the commercial peace thesis, as well as the mechanisms behind the theory.[4][5][6] According to Erik Gartzke and Jiakun Jack Zhang, the evidence on the relationship between economic interdependence and conflict is inconclusive.[7]

History

The philosophical roots of the commercial peace, closely related to the concept of doux commerce, can be traced back to Montesquieu, David Hume, Richard Cobden, Immanuel Kant, Joseph Schumpeter, Norman Angell, and classical economic theory.[8][5] In his 1795 essay Perpetual Peace, Immanuel Kant argued, among other things, that "the spirit of commerce . . . sooner or later takes hold of every nation, and is incompatible with war."[9][2][8] In the early twentieth century Norman Angell reasoned that trade interdependence in modern economies makes war unprofitable.[10] Later, Joseph Schumpeter offered the observation that with the advancement of capitalism people form "an unwarlike disposition."[11] Karl Polanyi argues in The Great Transformation that the emergence of international finance was the main contributor to peace in Europe between the end of the Napoleonic Wars and World War I.[12]

Theory

Trade interdependence

The interdependent trade theory for the capitalist peace is built on the foundations of classical economic theory. This idea, which can be traced back to Kant, became the original theoretical explanation for the capitalist peace.[8] In 1996, Erich Weede tied trade and free markets to development and peace, proposing that trade interdependence caused peace between nations.[13] Weede followed this up with what he called the "capitalist peace".[14] However, the empirical findings of the link between trade and development have been drawn into question, as one study found that the proportion of GDP to foreign trade is only 0.08, measured by logged GDP per capita.[15] Stephen Gent and Mark Crescenzi have argued that economic interdependence has reduced interstate conflict over market power.[16]

Katherine Barbieri has pushed back on the commercial peace thesis, finding only limited empirical support for the thesis.[17] A 2021 study in International Security by Mariya Grinberg found that states frequently engage in trade even while they are conducting war against each other, which raises questions about the preventive power of trade interdependence.[18] Some scholars argue that asymmetric dependence and relative gains may spur conflict.[19][20][21][22] Henry Farrell and Abraham Newman argue that interdependence may spur conflict by provoking competition for important nodes in global economic networks.[6]

According to Dale Copeland, trade can have a pacifying effects on interstate relations, but only if states believe that they will reap the rewards of trade into the future.[5] Barry Buzan has argued, "Liberal and mercantilist structures each have both positive and negative impacts on the use of force, but these impacts become important only when they are complemented by noneconomic factors governing the use of force."[23]

The outbreak of World War I during a period of unprecedented globalization and economic interdependence has often been cited as an example of how economic interdependence fails to prevent war or even contributes to it.[24] Other scholars dispute that World War I was a failure for liberal theory.[25][26][27] Eric Gartzke and Yonatan Lupu argue that there was a lack of trade interdependence between the states that ignited WWI.[25] Patrick McDonald and Kevin McSweeney argue that globalization in the period prior to WWI revolved around reductions in transportation costs, not due to trade liberalization, which means that the pre-WWI period is not a great case for testing the capitalist peace thesis.[27]

A 2021 PNAS study found that trade openness considerably reduces the risks of conflict over strategic locations close to maritime choke points.[28]

Economic norms theory

Michael Mousseau has advocated for what he calls "economic norms theory", which entails that leaders of states with advanced market-oriented economies have a strong interest in guarding the principle of self-determination for all states in order to safeguard a robust global marketplace.[4] Leaders of states with weak internal markets have little regard for protecting the global marketplace.[4]

Economic norms theory links the economic conditions of clientelism, which prevail in many lower income societies, and a contract-intensive economy, which prevails in many higher income societies, with divergent political interests and habits.[29][30]

Economic norms theory arose as an alternative explanation to the democratic peace, because it identified the causal relationship between democracy and peace as spurious. Michael Mousseau identified contract-intensive economies as a possible cause of both democracy and peace. He defines contract-intensive economies as those that have high life insurance contracting rates and net immigration rates.[4] The explanation is based on two aspects widely accepted in social science: (1) bounded rationality; and (2) divergent hierarchies between clientelism and contract-intensive economies. In contract-intensive societies, individuals have a loyalty towards the state that enforces the contracts between strangers. As a consequence, individuals in these societies expect that their states enforce contracts reliably and impartially, protect individual rights, and make efforts to enhance the general welfare. Moreover, with the assumption of bounded rationality, individuals routinely dependent on trusting strangers in contracts will develop the habits of trusting strangers and preferring universal rights, impartial law, and liberal democratic government. In contrast, individuals in contract-poor societies will develop the habits of abiding by the commands of group leaders, and distrusting those from out-groups.

According to economic norms theory, the people in contract-rich nations enjoy a permanent and positive peace. As long as their states accede to popular demands and remain reliably impartial, individuals in nations with contract intensive economies have an interest in everyone's rights and material welfare, within and outside the nation. Consequently, contract-intensive nations not only avoid war with each other but engage in intense levels of mutual cooperation specifically aimed at promoting each other's material welfare. Leaders of nations with contract-poor economies, in contrast, pursue the interests of their dominant groups and have no interest in the security or welfare of members of out-groups, whether they are internal or external to the nation. In a 2019 analysis, Mosseau argued that voting patterns at the United Nations General Assembly support economic norms theory.[31]

One concern with Mousseau's theoretical explanation is that he suggests that contracting in life insurance "indicates a highly institutionalized norm of contracting in a society because… to contract in life insurance requires a great deal of trust…";[32] "In contract-intensive societies ... making contracts with strangers promotes loyalty ... to a state that enforces these contracts with... equal application of the rule of law,";[33] And "What distinguishes marketplace societies from others is that property confiscations are carried out with impartiality and in accordance with the rule of law."[34] However, the source that Mousseau references for the life insurance data (Beck and Webb) report that "... the rule of law or corruption cannot explain variation of Life Insurance Density across countries."[35] In contrast, they report that "income per capita, inflation, and banking sector development are the most robust predictors of life insurance consumption across countries and over time."[36] Thus, it is questionable as to whether life insurance truly "indicates a highly institutionalized norm of contracting in a society..."

Another concern with Mousseau's explanation of capitalist peace theory is his omission of almost every Latin American intervention between 1816 and 1992, a fact that allows the author to conclude that "joint highly democratic dyads are about 3 times more likely  …  to resolve their militarized conflicts with mutual concessions’ (Mousseau, 1998, p. 210; see also Bremer, 1993)."[37]

Costly signaling

Some scholars argue that nations that have greater trade flows and capital flows are less likely to end up in conflict because they are able to engage in costly signaling. When those countries issue explicit threats, their threats are taken seriously because the issuing of the threat leads investors and traders to pull investments and trade from the country.[38][39][40] This reduces the likelihood that crises inadvertently escalate into war.[39]

Capital and finance

Stephen G. Brooks has argued in a number of studies that the globalization of finance and the rise of multinational companies have contributed to a more peaceful international system.[41][42] In a 2005 study, he argues that conquest for economic purposes is pointless and counterproductive in an international system with extensive mobility of capital and elaborate global supply chains.[41] In a 2013 study, he argued, "there are no longer any economic actors who will be favorable toward war and who will lobby the government with this preference... the current structure of the global economy now makes it feasible for foreign direct investment to serve as an effective substitute for conquest in a way that was not possible in previous eras."[42]

Size of government

Patrick J. McDonald[43][44] has argued that smaller governments are more dependent than larger or socialist governments on raising taxes for fighting wars. This makes the commitments of nations with smaller governments more credible than those with larger ones, allowing for nations with smaller governments, and thus "capitalist" economies, to be better positioned for avoiding conflicts.

Ruling others by force

This theory, adduces that if men want to oppose war, it is statism that they must oppose. So long as they hold the tribal notion that the individual is sacrificial fodder for the collective, that some men have the right to rule others by force, and that some (any) alleged "good" can justify it—there can be no peace within a nation and no peace among nations.[45]

Lower economic benefits from conquest

According to Richard Rosecrance, states can accumulate power and enhance their security through trade and foreign direct investment in an economically open international system, whereas in previous era, states accumulated power through conquest of land.[46] Peter Lieberman has rebutted Rosecrance, arguing that states have reaped benefits from conquest in the 20th century.[47]

Golden arches theory

In Thomas L. Friedman's 1999 book The Lexus and the Olive Tree,[48] the following statement was presented: "No two countries that both had McDonald's had fought a war against each other since each got its McDonald's". He supported his belief, as a theory, by stating that when a country has reached an economic development where it has a middle class strong enough to support a McDonald's network, it would become a "McDonald's country", and will not be interested in fighting wars anymore.[non-primary source needed]

Shortly after the book was published, NATO bombed Yugoslavia. On the first day of the bombing, McDonald's restaurants in Belgrade were demolished by angry protesters and were rebuilt only after the bombing ended. In the 2000 edition of the book, Friedman argued that this exception proved the rule: the war ended quickly, he argued, partly because the Serbian population did not want to lose their place in a global system "symbolised by McDonald's" (Friedman 2000: 252–253).

In 2005, Friedman said that he framed this theory in terms of McDonald's Golden Arches "with tongue slightly in cheek".[49] In his 2005 book, The World Is Flat, he offered an updated theory he called the Dell theory.

In 2022, following the 2022 Russian invasion of Ukraine, McDonald's suspended all business in Russia, but said it would continue to pay employees.[50] Both Ukraine and Russia had a substantial amount of McDonald's locations in both countries before the invasion. McDonald's later sold all the locations in Russia to a Siberian licensee.[51] The restaurants were eventually reopened under different branding with many regular menu items, such as the Big Mac, no longer being sold.[52]

Dell theory

The Dell Theory of Conflict Prevention, or Dell theory, was presented by Thomas Friedman in his book, The World Is Flat. It is an updated version of his previous golden arches theory.[non-primary source needed]

"The Dell Theory stipulates: No two countries that are both part of a major global supply chain, like Dell’s, will ever fight a war against each other as long as they are both part of the same global supply chain."[53]

This theory failed when Russia invaded Ukraine in February 2014, seizing Crimea and cutting off Russia from essential military and civil components, including jet turbines for helicopters and aircraft, which were manufactured in Ukraine. The restricted supply of these items has negatively impacted Russia's later continuation of its war against Ukraine.[citation needed]

See also

References

  1. ^ Mansfield, Edward D. (2021). Pevehouse, Jon C. W; Seabrooke, Leonard (eds.). "International Trade and Conflict". The Oxford Handbook of International Political Economy. doi:10.1093/oxfordhb/9780198793519.013.27. ISBN 978-0-19-879351-9. from the original on 2021-05-15.
  2. ^ a b Russett, Bruce; Oneal, John R.; Davis, David R. (1998). "The Third Leg of the Kantian Tripod for Peace: International Organizations and Militarized Disputes, 1950-85". International Organization. 52 (3): 441–467. doi:10.1162/002081898550626. ISSN 0020-8183. JSTOR 2601398. S2CID 153665709.
  3. ^ Poast, Paul (2019). "Beyond the "Sinew of War": The Political Economy of Security as a Subfield". Annual Review of Political Science. 22 (1): 223–239. doi:10.1146/annurev-polisci-050317-070912. ISSN 1094-2939.
  4. ^ a b c d Mousseau, Michael (2019). "The End of War: How a Robust Marketplace and Liberal Hegemony Are Leading to Perpetual World Peace". International Security. 44 (1): 160–196. doi:10.1162/isec_a_00352. ISSN 0162-2889. S2CID 198952369.
  5. ^ a b c Copeland, Dale C. (2015). Economic Interdependence and War. Princeton University Press. pp. 1–25. ISBN 978-0-691-16159-4. JSTOR j.ctt7ztkw2.
  6. ^ a b Farrell, Henry; Newman, Abraham L. (2019-07-01). "Weaponized Interdependence: How Global Economic Networks Shape State Coercion". International Security. 44 (1): 42–79. doi:10.1162/isec_a_00351. ISSN 0162-2889. S2CID 198952367.
  7. ^ Gartzke, Erik; Zhang, Jiakun Jack (2015). "Trade and War". The Oxford Handbook of the Political Economy of International Trade. doi:10.1093/oxfordhb/9780199981755.013.27. ISBN 978-0-19-998175-5. from the original on 2016-05-21.
  8. ^ a b c Valeriyovych, Mykhaylenko Maksym (2016). "Thirty years of "peace": Reconsidering the Kantian tradition in foreign relations". Studia Humanitatis (3): 4. ISSN 2308-8079.
  9. ^ Kant, Immanuel. 1939 [1795]. Perpetual Peace. Translated and Edited by Nicholas Murray Butler. New York: Columbia University Press.
  10. ^ Angell, Norman. 1913 [1911]. The Great Illusion: A Study of the Relation of Military Power to National Advantage. G.P. Putnam's Sons: London.
  11. ^ Schumpeter, Joseph. 1955. Imperialism; Social Classes : Two Essays. Translated by Heinz Norden. New York : Meridian Books. Pp. 66-68
  12. ^ Polanyi, Karl; Károly, Polányi (1957). The Great Transformation. Beacon Press. pp. 9–13. ISBN 978-0-8070-5679-0.
  13. ^ Erich Weede, Economic Development, Social Order, and World Politics. Boulder, CO: Lynne Rienner (1996)
  14. ^ Erich Weede, Balance of Power, Globalization and the Capitalist Peace, Potsdam: Liberal Verlag (2005)
  15. ^ Mousseau, Michael (2010). "Coming to Terms with the Capitalist Peace". International Interactions. 36 (2): 185–192. doi:10.1080/03050621003785074. S2CID 36588941.
  16. ^ Gent, Stephen E.; Crescenzi, Mark J. C. (2021). Market Power Politics: War, Institutions, and Strategic Delay in World Politics. Oxford University Press. ISBN 978-0-19-752982-9.
  17. ^ Barbieri, Katherine (2002). The Liberal Illusion: Does Trade Promote Peace?. University of Michigan Press. ISBN 978-0-472-11300-2.
  18. ^ Grinberg, Mariya (2021). "Wartime Commercial Policy and Trade between Enemies". International Security. 46 (1): 9–52. doi:10.1162/isec_a_00412. ISSN 0162-2889. S2CID 236094316.
  19. ^ Mansfield, Edward D.; Pollins, Brian M. (2001). "The Study of Interdependence and Conflict: Recent Advances, Open Questions, and Directions for Future Research". The Journal of Conflict Resolution. 45 (6): 834–859. doi:10.1177/0022002701045006007. ISSN 0022-0027. JSTOR 3176160. S2CID 145366406.
  20. ^ Grieco, Joseph M. (1988). "Anarchy and the Limits of Cooperation: A Realist Critique of the Newest Liberal Institutionalism". International Organization. 42 (3): 485–507. doi:10.1017/S0020818300027715. ISSN 0020-8183. JSTOR 2706787. S2CID 148193812.
  21. ^ Mearsheimer, John J. (1994). "The False Promise of International Institutions". International Security. 19 (3): 5–49. doi:10.2307/2539078. ISSN 0162-2889. JSTOR 2539078. S2CID 153472054.
  22. ^ Gowa, Joanne (1995). Allies, Adversaries, and International Trade. Princeton University Press. ISBN 978-0-691-04471-2.
  23. ^ Buzan, Barry (1984). "Economic structure and international security: the limits of the liberal Case". International Organization. 38 (4): 597–624. doi:10.1017/S0020818300026886. ISSN 1531-5088. S2CID 154636614.
  24. ^ Rowe, David M. (2005). "The Tragedy of Liberalism How Globalization Caused the First World War". Security Studies. 14 (3): 407–447. doi:10.1080/09636410500323153. ISSN 0963-6412. S2CID 144723501.
  25. ^ a b Gartzke, Erik; Lupu, Yonatan (2012). "Trading on Preconceptions: Why World War I Was Not a Failure of Economic Interdependence". International Security. doi:10.2139/ssrn.1706942. ISSN 1556-5068.
  26. ^ Gowa, Joanne; Hicks, Raymond (2017). "Commerce and Conflict: New Data about the Great War". British Journal of Political Science. 47 (3): 653–674. doi:10.1017/S0007123415000289. ISSN 0007-1234. S2CID 155842355.
  27. ^ a b Mcdonald, Patrick J.; Sweeney, Kevin (2007). "The Achilles' Heel of Liberal Ir Theory? Globalization and Conflict in the Pre-World War I Era". World Politics. 59 (3): 370–403. doi:10.1017/S0043887100020864. ISSN 0043-8871. JSTOR 40060163. S2CID 154331885.
  28. ^ Gallea, Quentin; Rohner, Dominic (2021). "Globalization mitigates the risk of conflict caused by strategic territory". Proceedings of the National Academy of Sciences. 118 (39). Bibcode:2021PNAS..11805624G. doi:10.1073/pnas.2105624118. ISSN 0027-8424. PMC 8488659. PMID 34551977.
  29. ^ Michael Mousseau, "The Social Market Roots of Democratic Peace," International Security, Vol. 33, No. 4 (Spring 2009), 52-86.
  30. ^ Michael Mousseau, "Market Civilization and its Clash with Terror," International Security, Vol. 27, No. 3 (Winter 2002-2003), 5-29.
  31. ^ Mousseau, Michael. "The end of war: How a robust marketplace and liberal hegemony are leading to perpetual world peace." International Security 44, no. 1 (2019): 160-196.
  32. ^ Vasquez, John (2012). "9: A Market-Capitalist or a Democratic Peace?". What Do We Know About War?. Lanham, MD: Rowman & Littlefield Publishers. p. 199.
  33. ^ Mousseau, Michael (April 2009). "The Social Market Roots of Democratic Peace". International Security. 33 (4): 52–86. doi:10.1162/isec.2009.33.4.52. ISSN 0162-2889. S2CID 57572343.
  34. ^ Mousseau, Michael; Mousseau, Demet Yalcin (May 2008). "The Contracting Roots of Human Rights". Journal of Peace Research. 45 (3): 327–344. doi:10.1177/0022343308088813. ISSN 0022-3433. S2CID 37148120.
  35. ^ Beck, Thorsten; Webb, Ian. "Determinants of Life Insurance Consumption across Countries". CiteSeerX 10.1.1.17.7044. {{cite journal}}: Cite journal requires |journal= (help)
  36. ^ Beck, Thorsten; Webb, Ian (2003). "Economic, Demographic, and Institutional Determinants of Life Insurance Consumption across Countries" (PDF).
  37. ^ Gonzalez-Vicente, Ruben (2020). "The liberal peace fallacy: Violent neoliberalism and the temporal and spatial traps of state-based approaches to peace". Territory, Politics, Governance. 8: 100–116. doi:10.1080/21622671.2018.1550012. S2CID 149644869.
  38. ^ Gartzke, Erik (2007). "The Capitalist Peace". American Journal of Political Science. 51 (1): 166–191. doi:10.1111/j.1540-5907.2007.00244.x. ISSN 1540-5907.
  39. ^ a b Erik Gartzke and J. Joseph Hewitt (2010). "International Crises and the Capitalist Peace". International Interactions. 36 (2): 115–145. doi:10.1080/03050621003784846. hdl:10.1080/03050621003784846. S2CID 153845154.
  40. ^ Morrow, James D. (1999). "How Could Trade Affect Conflict?". Journal of Peace Research. 36 (4): 481–489. doi:10.1177/0022343399036004006. ISSN 0022-3433. S2CID 108818972.
  41. ^ a b Brooks, Stephen G. (2005). Producing Security: Multinational Corporations, Globalization, and the Changing Calculus of Conflict. Princeton University Press. ISBN 978-0-691-13031-6.
  42. ^ a b Brooks, Stephen G. (2013). "Economic Actors' Lobbying Influence on the Prospects for War and Peace". International Organization. 67 (4): 863–888. doi:10.1017/S0020818313000283. ISSN 0020-8183. S2CID 154735220.
  43. ^ Patrick J. McDonald, "The Purse Strings of Peace," American Journal of Political Science, 51:569-582 (2007)
  44. ^ Patrick J. McDonald (2010). "Capitalism, Commitment, and Peace". International Interactions. 36 (2): 146–168. doi:10.1080/03050621003784911. S2CID 154947013.
  45. ^ Ayn Rand (1966). "The Roots of War," Capitalism: The Unknown Ideal.
  46. ^ Rosecrance, Richard (1987). Rise Trading State. Basic Books. ISBN 978-0-465-07036-7.
  47. ^ Liberman, Peter (1998). Does Conquest Pay?: The Exploitation of Occupied Industrial Societies. Princeton University Press. ISBN 978-0-691-00242-2.
  48. ^ Friedman, Thomas. (2000) The Lexus and the Olive Tree. New York: Anchor Books.
  49. ^ Friedman, Thomas. (2005) The Guardian, 21 April 2005.
  50. ^ "McDonald's, Starbucks, Coke, Pepsi join exodus out of Russia". ABC News. Retrieved 2022-03-10.
  51. ^ agencies, Guardian staff and (2022-05-19). "Govor agrees to buy all McDonald's in Russia and rebrand them". the Guardian. Retrieved 2022-06-23.
  52. ^ Pennington, Zahra Ullah,Fred Pleitgen,Josh (2022-06-12). "Rebranded McDonald's restaurants are unveiled in Russia". CNN. Retrieved 2022-06-23.
  53. ^ The World is Flat (ISBN 1-59397-668-2), Thomas L. Friedman, pg 421

Further reading

  • Gartzke, Erik. "The capitalist peace." American journal of political science 51.1 (2007): 166-191. online
  • Gat, Azar. The causes of war and the spread of peace: but will war rebound? (Oxford University Press, 2017).
  • Gill-Tiney, Patrick. "A Liberal Peace?: The Growth of Liberal Norms and the Decline of Interstate Violence." Journal of Conflict Resolution (2021): 00220027211035554. online
  • Hall, Mitchell, ed. Opposition to War: An Encyclopedia of U.S. Peace and Antiwar Movements (ABC-CLIO, 2018) excerpt
  • Kulnazarova, Aigul, and Vesselin Popovski, eds. The Palgrave Handbook of Global Approaches to Peace (Palgrave Macmillan, 2019)
  • Schneider, Gerald, and Nils Petter Gleditsch. "The capitalist peace: The origins and prospects of a liberal idea." International Interactions 36.2 (2010): 107-114. online
  • Shea, Patrick E. "Money Talks: Finance, War, and Great Power Politics in the Nineteenth Century." Social Science History 44.2 (2020): 223-249; argues the Rothschilds helped Europe avert war in several episodes.
  • Smith, Andrew D., and Laurence B. Mussio. "Canadian Entrepreneurs and the Preservation of the Capitalist Peace in the North Atlantic Triangle in the Civil War Era, 1861–1871." Enterprise & Society 17.3 (2016): 515-545. online

April 28, 2023
capitalist, peace, capitalist, peace, capitalist, peace, theory, commercial, peace, posits, that, market, openness, contributes, more, peaceful, behavior, among, states, that, developed, market, oriented, economies, less, likely, engage, conflict, with, anothe. The capitalist peace or capitalist peace theory or commercial peace posits that market openness contributes to more peaceful behavior among states and that developed market oriented economies are less likely to engage in conflict with one another 1 Along with the democratic peace theory and institutionalist arguments for peace the commercial peace forms part of the Kantian tripod for peace 2 Prominent mechanisms for the commercial peace revolve around how capitalism trade interdependence and capital interdependence raise the costs of warfare incentivize groups to lobby against war make it harder for leaders to go to war and reduce the economic benefits of conquest 3 Scholars have debated the empirical and theoretical validity of the commercial peace thesis as well as the mechanisms behind the theory 4 5 6 According to Erik Gartzke and Jiakun Jack Zhang the evidence on the relationship between economic interdependence and conflict is inconclusive 7 Contents 1 History 2 Theory 2 1 Trade interdependence 2 2 Economic norms theory 2 3 Costly signaling 2 4 Capital and finance 2 5 Size of government 2 6 Ruling others by force 2 7 Lower economic benefits from conquest 3 Golden arches theory 4 Dell theory 5 See also 6 References 7 Further readingHistory EditThe philosophical roots of the commercial peace closely related to the concept of doux commerce can be traced back to Montesquieu David Hume Richard Cobden Immanuel Kant Joseph Schumpeter Norman Angell and classical economic theory 8 5 In his 1795 essay Perpetual Peace Immanuel Kant argued among other things that the spirit of commerce sooner or later takes hold of every nation and is incompatible with war 9 2 8 In the early twentieth century Norman Angell reasoned that trade interdependence in modern economies makes war unprofitable 10 Later Joseph Schumpeter offered the observation that with the advancement of capitalism people form an unwarlike disposition 11 Karl Polanyi argues in The Great Transformation that the emergence of international finance was the main contributor to peace in Europe between the end of the Napoleonic Wars and World War I 12 Theory EditTrade interdependence Edit The interdependent trade theory for the capitalist peace is built on the foundations of classical economic theory This idea which can be traced back to Kant became the original theoretical explanation for the capitalist peace 8 In 1996 Erich Weede tied trade and free markets to development and peace proposing that trade interdependence caused peace between nations 13 Weede followed this up with what he called the capitalist peace 14 However the empirical findings of the link between trade and development have been drawn into question as one study found that the proportion of GDP to foreign trade is only 0 08 measured by logged GDP per capita 15 Stephen Gent and Mark Crescenzi have argued that economic interdependence has reduced interstate conflict over market power 16 Katherine Barbieri has pushed back on the commercial peace thesis finding only limited empirical support for the thesis 17 A 2021 study in International Security by Mariya Grinberg found that states frequently engage in trade even while they are conducting war against each other which raises questions about the preventive power of trade interdependence 18 Some scholars argue that asymmetric dependence and relative gains may spur conflict 19 20 21 22 Henry Farrell and Abraham Newman argue that interdependence may spur conflict by provoking competition for important nodes in global economic networks 6 According to Dale Copeland trade can have a pacifying effects on interstate relations but only if states believe that they will reap the rewards of trade into the future 5 Barry Buzan has argued Liberal and mercantilist structures each have both positive and negative impacts on the use of force but these impacts become important only when they are complemented by noneconomic factors governing the use of force 23 The outbreak of World War I during a period of unprecedented globalization and economic interdependence has often been cited as an example of how economic interdependence fails to prevent war or even contributes to it 24 Other scholars dispute that World War I was a failure for liberal theory 25 26 27 Eric Gartzke and Yonatan Lupu argue that there was a lack of trade interdependence between the states that ignited WWI 25 Patrick McDonald and Kevin McSweeney argue that globalization in the period prior to WWI revolved around reductions in transportation costs not due to trade liberalization which means that the pre WWI period is not a great case for testing the capitalist peace thesis 27 A 2021 PNAS study found that trade openness considerably reduces the risks of conflict over strategic locations close to maritime choke points 28 Economic norms theory Edit Michael Mousseau has advocated for what he calls economic norms theory which entails that leaders of states with advanced market oriented economies have a strong interest in guarding the principle of self determination for all states in order to safeguard a robust global marketplace 4 Leaders of states with weak internal markets have little regard for protecting the global marketplace 4 Economic norms theory links the economic conditions of clientelism which prevail in many lower income societies and a contract intensive economy which prevails in many higher income societies with divergent political interests and habits 29 30 Economic norms theory arose as an alternative explanation to the democratic peace because it identified the causal relationship between democracy and peace as spurious Michael Mousseau identified contract intensive economies as a possible cause of both democracy and peace He defines contract intensive economies as those that have high life insurance contracting rates and net immigration rates 4 The explanation is based on two aspects widely accepted in social science 1 bounded rationality and 2 divergent hierarchies between clientelism and contract intensive economies In contract intensive societies individuals have a loyalty towards the state that enforces the contracts between strangers As a consequence individuals in these societies expect that their states enforce contracts reliably and impartially protect individual rights and make efforts to enhance the general welfare Moreover with the assumption of bounded rationality individuals routinely dependent on trusting strangers in contracts will develop the habits of trusting strangers and preferring universal rights impartial law and liberal democratic government In contrast individuals in contract poor societies will develop the habits of abiding by the commands of group leaders and distrusting those from out groups According to economic norms theory the people in contract rich nations enjoy a permanent and positive peace As long as their states accede to popular demands and remain reliably impartial individuals in nations with contract intensive economies have an interest in everyone s rights and material welfare within and outside the nation Consequently contract intensive nations not only avoid war with each other but engage in intense levels of mutual cooperation specifically aimed at promoting each other s material welfare Leaders of nations with contract poor economies in contrast pursue the interests of their dominant groups and have no interest in the security or welfare of members of out groups whether they are internal or external to the nation In a 2019 analysis Mosseau argued that voting patterns at the United Nations General Assembly support economic norms theory 31 One concern with Mousseau s theoretical explanation is that he suggests that contracting in life insurance indicates a highly institutionalized norm of contracting in a society because to contract in life insurance requires a great deal of trust 32 In contract intensive societies making contracts with strangers promotes loyalty to a state that enforces these contracts with equal application of the rule of law 33 And What distinguishes marketplace societies from others is that property confiscations are carried out with impartiality and in accordance with the rule of law 34 However the source that Mousseau references for the life insurance data Beck and Webb report that the rule of law or corruption cannot explain variation of Life Insurance Density across countries 35 In contrast they report that income per capita inflation and banking sector development are the most robust predictors of life insurance consumption across countries and over time 36 Thus it is questionable as to whether life insurance truly indicates a highly institutionalized norm of contracting in a society Another concern with Mousseau s explanation of capitalist peace theory is his omission of almost every Latin American intervention between 1816 and 1992 a fact that allows the author to conclude that joint highly democratic dyads are about 3 times more likely to resolve their militarized conflicts with mutual concessions Mousseau 1998 p 210 see also Bremer 1993 37 Costly signaling Edit Some scholars argue that nations that have greater trade flows and capital flows are less likely to end up in conflict because they are able to engage in costly signaling When those countries issue explicit threats their threats are taken seriously because the issuing of the threat leads investors and traders to pull investments and trade from the country 38 39 40 This reduces the likelihood that crises inadvertently escalate into war 39 Capital and finance Edit Stephen G Brooks has argued in a number of studies that the globalization of finance and the rise of multinational companies have contributed to a more peaceful international system 41 42 In a 2005 study he argues that conquest for economic purposes is pointless and counterproductive in an international system with extensive mobility of capital and elaborate global supply chains 41 In a 2013 study he argued there are no longer any economic actors who will be favorable toward war and who will lobby the government with this preference the current structure of the global economy now makes it feasible for foreign direct investment to serve as an effective substitute for conquest in a way that was not possible in previous eras 42 Size of government Edit Patrick J McDonald 43 44 has argued that smaller governments are more dependent than larger or socialist governments on raising taxes for fighting wars This makes the commitments of nations with smaller governments more credible than those with larger ones allowing for nations with smaller governments and thus capitalist economies to be better positioned for avoiding conflicts Ruling others by force Edit This theory adduces that if men want to oppose war it is statism that they must oppose So long as they hold the tribal notion that the individual is sacrificial fodder for the collective that some men have the right to rule others by force and that some any alleged good can justify it there can be no peace within a nation and no peace among nations 45 Lower economic benefits from conquest Edit According to Richard Rosecrance states can accumulate power and enhance their security through trade and foreign direct investment in an economically open international system whereas in previous era states accumulated power through conquest of land 46 Peter Lieberman has rebutted Rosecrance arguing that states have reaped benefits from conquest in the 20th century 47 Golden arches theory EditIn Thomas L Friedman s 1999 book The Lexus and the Olive Tree 48 the following statement was presented No two countries that both had McDonald s had fought a war against each other since each got its McDonald s He supported his belief as a theory by stating that when a country has reached an economic development where it has a middle class strong enough to support a McDonald s network it would become a McDonald s country and will not be interested in fighting wars anymore non primary source needed Shortly after the book was published NATO bombed Yugoslavia On the first day of the bombing McDonald s restaurants in Belgrade were demolished by angry protesters and were rebuilt only after the bombing ended In the 2000 edition of the book Friedman argued that this exception proved the rule the war ended quickly he argued partly because the Serbian population did not want to lose their place in a global system symbolised by McDonald s Friedman 2000 252 253 In 2005 Friedman said that he framed this theory in terms of McDonald s Golden Arches with tongue slightly in cheek 49 In his 2005 book The World Is Flat he offered an updated theory he called the Dell theory In 2022 following the 2022 Russian invasion of Ukraine McDonald s suspended all business in Russia but said it would continue to pay employees 50 Both Ukraine and Russia had a substantial amount of McDonald s locations in both countries before the invasion McDonald s later sold all the locations in Russia to a Siberian licensee 51 The restaurants were eventually reopened under different branding with many regular menu items such as the Big Mac no longer being sold 52 Dell theory EditThe Dell Theory of Conflict Prevention or Dell theory was presented by Thomas Friedman in his book The World Is Flat It is an updated version of his previous golden arches theory non primary source needed The Dell Theory stipulates No two countries that are both part of a major global supply chain like Dell s will ever fight a war against each other as long as they are both part of the same global supply chain 53 This theory failed when Russia invaded Ukraine in February 2014 seizing Crimea and cutting off Russia from essential military and civil components including jet turbines for helicopters and aircraft which were manufactured in Ukraine The restricted supply of these items has negatively impacted Russia s later continuation of its war against Ukraine citation needed See also EditAmerican Peace Award 1924 contest Big Mac Index Doux commerce The World Is Flat Democratic peace Economic interdependence Immanuel Kant Merchants of death idea that financiers amp munitions industry started World War I Liberal International relations theoryReferences Edit Mansfield Edward D 2021 Pevehouse Jon C W Seabrooke Leonard eds International Trade and Conflict The Oxford Handbook of International Political Economy doi 10 1093 oxfordhb 9780198793519 013 27 ISBN 978 0 19 879351 9 Archived from the original on 2021 05 15 a b Russett Bruce Oneal John R Davis David R 1998 The Third Leg of the Kantian Tripod for Peace International Organizations and Militarized Disputes 1950 85 International Organization 52 3 441 467 doi 10 1162 002081898550626 ISSN 0020 8183 JSTOR 2601398 S2CID 153665709 Poast Paul 2019 Beyond the Sinew of War The Political Economy of Security as a Subfield Annual Review of Political Science 22 1 223 239 doi 10 1146 annurev polisci 050317 070912 ISSN 1094 2939 a b c d Mousseau Michael 2019 The End of War How a Robust Marketplace and Liberal Hegemony Are Leading to Perpetual World Peace International Security 44 1 160 196 doi 10 1162 isec a 00352 ISSN 0162 2889 S2CID 198952369 a b c Copeland Dale C 2015 Economic Interdependence and War Princeton University Press pp 1 25 ISBN 978 0 691 16159 4 JSTOR j ctt7ztkw2 a b Farrell Henry Newman Abraham L 2019 07 01 Weaponized Interdependence How Global Economic Networks Shape State Coercion International Security 44 1 42 79 doi 10 1162 isec a 00351 ISSN 0162 2889 S2CID 198952367 Gartzke Erik Zhang Jiakun Jack 2015 Trade and War The Oxford Handbook of the Political Economy of International Trade doi 10 1093 oxfordhb 9780199981755 013 27 ISBN 978 0 19 998175 5 Archived from the original on 2016 05 21 a b c Valeriyovych Mykhaylenko Maksym 2016 Thirty years of peace Reconsidering the Kantian tradition in foreign relations Studia Humanitatis 3 4 ISSN 2308 8079 Kant Immanuel 1939 1795 Perpetual Peace Translated and Edited by Nicholas Murray Butler New York Columbia University Press Angell Norman 1913 1911 The Great Illusion A Study of the Relation of Military Power to National Advantage G P Putnam s Sons London Schumpeter Joseph 1955 Imperialism Social Classes Two Essays Translated by Heinz Norden New York Meridian Books Pp 66 68 Polanyi Karl Karoly Polanyi 1957 The Great Transformation Beacon Press pp 9 13 ISBN 978 0 8070 5679 0 Erich Weede Economic Development Social Order and World Politics Boulder CO Lynne Rienner 1996 Erich Weede Balance of Power Globalization and the Capitalist Peace Potsdam Liberal Verlag 2005 Mousseau Michael 2010 Coming to Terms with the Capitalist Peace International Interactions 36 2 185 192 doi 10 1080 03050621003785074 S2CID 36588941 Gent Stephen E Crescenzi Mark J C 2021 Market Power Politics War Institutions and Strategic Delay in World Politics Oxford University Press ISBN 978 0 19 752982 9 Barbieri Katherine 2002 The Liberal Illusion Does Trade Promote Peace University of Michigan Press ISBN 978 0 472 11300 2 Grinberg Mariya 2021 Wartime Commercial Policy and Trade between Enemies International Security 46 1 9 52 doi 10 1162 isec a 00412 ISSN 0162 2889 S2CID 236094316 Mansfield Edward D Pollins Brian M 2001 The Study of Interdependence and Conflict Recent Advances Open Questions and Directions for Future Research The Journal of Conflict Resolution 45 6 834 859 doi 10 1177 0022002701045006007 ISSN 0022 0027 JSTOR 3176160 S2CID 145366406 Grieco Joseph M 1988 Anarchy and the Limits of Cooperation A Realist Critique of the Newest Liberal Institutionalism International Organization 42 3 485 507 doi 10 1017 S0020818300027715 ISSN 0020 8183 JSTOR 2706787 S2CID 148193812 Mearsheimer John J 1994 The False Promise of International Institutions International Security 19 3 5 49 doi 10 2307 2539078 ISSN 0162 2889 JSTOR 2539078 S2CID 153472054 Gowa Joanne 1995 Allies Adversaries and International Trade 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ISSN 0043 8871 JSTOR 40060163 S2CID 154331885 Gallea Quentin Rohner Dominic 2021 Globalization mitigates the risk of conflict caused by strategic territory Proceedings of the National Academy of Sciences 118 39 Bibcode 2021PNAS 11805624G doi 10 1073 pnas 2105624118 ISSN 0027 8424 PMC 8488659 PMID 34551977 Michael Mousseau The Social Market Roots of Democratic Peace International Security Vol 33 No 4 Spring 2009 52 86 Michael Mousseau Market Civilization and its Clash with Terror International Security Vol 27 No 3 Winter 2002 2003 5 29 Mousseau Michael The end of war How a robust marketplace and liberal hegemony are leading to perpetual world peace International Security 44 no 1 2019 160 196 Vasquez John 2012 9 A Market Capitalist or a Democratic Peace What Do We Know About War Lanham MD Rowman amp Littlefield Publishers p 199 Mousseau Michael April 2009 The Social Market Roots of Democratic Peace International Security 33 4 52 86 doi 10 1162 isec 2009 33 4 52 ISSN 0162 2889 S2CID 57572343 Mousseau Michael Mousseau Demet Yalcin May 2008 The Contracting Roots of Human Rights Journal of Peace Research 45 3 327 344 doi 10 1177 0022343308088813 ISSN 0022 3433 S2CID 37148120 Beck Thorsten Webb Ian Determinants of Life Insurance Consumption across Countries CiteSeerX 10 1 1 17 7044 a href Template Cite journal html title Template Cite journal cite journal a Cite journal requires journal help Beck Thorsten Webb Ian 2003 Economic Demographic and Institutional Determinants of Life Insurance Consumption across Countries PDF Gonzalez Vicente Ruben 2020 The liberal peace fallacy Violent neoliberalism and the temporal and spatial traps of state based approaches to peace Territory Politics Governance 8 100 116 doi 10 1080 21622671 2018 1550012 S2CID 149644869 Gartzke Erik 2007 The Capitalist Peace American Journal of Political Science 51 1 166 191 doi 10 1111 j 1540 5907 2007 00244 x ISSN 1540 5907 a b Erik Gartzke and J Joseph Hewitt 2010 International Crises and the Capitalist Peace International Interactions 36 2 115 145 doi 10 1080 03050621003784846 hdl 10 1080 03050621003784846 S2CID 153845154 Morrow James D 1999 How Could Trade Affect Conflict Journal of Peace Research 36 4 481 489 doi 10 1177 0022343399036004006 ISSN 0022 3433 S2CID 108818972 a b Brooks Stephen G 2005 Producing Security Multinational Corporations Globalization and the Changing Calculus of Conflict Princeton University Press ISBN 978 0 691 13031 6 a b Brooks Stephen G 2013 Economic Actors Lobbying Influence on the Prospects for War and Peace International Organization 67 4 863 888 doi 10 1017 S0020818313000283 ISSN 0020 8183 S2CID 154735220 Patrick J McDonald The Purse Strings of Peace American Journal of Political Science 51 569 582 2007 Patrick J McDonald 2010 Capitalism Commitment and Peace International Interactions 36 2 146 168 doi 10 1080 03050621003784911 S2CID 154947013 Ayn Rand 1966 The Roots of War Capitalism The Unknown Ideal Rosecrance Richard 1987 Rise Trading State Basic Books ISBN 978 0 465 07036 7 Liberman Peter 1998 Does Conquest Pay The Exploitation of Occupied Industrial Societies Princeton University Press ISBN 978 0 691 00242 2 Friedman Thomas 2000 The Lexus and the Olive Tree New York Anchor Books Friedman Thomas 2005 The Guardian 21 April 2005 McDonald s Starbucks Coke Pepsi join exodus out of Russia ABC News Retrieved 2022 03 10 agencies Guardian staff and 2022 05 19 Govor agrees to buy all McDonald s in Russia and rebrand them the Guardian Retrieved 2022 06 23 Pennington Zahra Ullah Fred Pleitgen Josh 2022 06 12 Rebranded McDonald s restaurants are unveiled in Russia CNN Retrieved 2022 06 23 The World is Flat ISBN 1 59397 668 2 Thomas L Friedman pg 421Further reading EditGartzke Erik The capitalist peace American journal of political science 51 1 2007 166 191 online Gat Azar The causes of war and the spread of peace but will war rebound Oxford University Press 2017 Gill Tiney Patrick A Liberal Peace The Growth of Liberal Norms and the Decline of Interstate Violence Journal of Conflict Resolution 2021 00220027211035554 online Hall Mitchell ed Opposition to War An Encyclopedia of U S Peace and Antiwar Movements ABC CLIO 2018 excerpt Kulnazarova Aigul and Vesselin Popovski eds The Palgrave Handbook of Global Approaches to Peace Palgrave Macmillan 2019 Schneider Gerald and Nils Petter Gleditsch The capitalist peace The origins and prospects of a liberal idea International Interactions 36 2 2010 107 114 online Shea Patrick E Money Talks Finance War and Great Power Politics in the Nineteenth Century Social Science History 44 2 2020 223 249 argues the Rothschilds helped Europe avert war in several episodes Smith Andrew D and Laurence B Mussio Canadian Entrepreneurs and the Preservation of the Capitalist Peace in the North Atlantic Triangle in the Civil War Era 1861 1871 Enterprise amp Society 17 3 2016 515 545 online Retrieved from https en wikipedia org w index php title Capitalist peace amp oldid 1150505322, 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