Does Trade Promote Peace? An Historical and Global Perspective

Global History of Trade and ConflictLucia Coppolaro and Francine McKenzie
Editors of A Global History of Trade and Conflict Since 1500 (Palgrave, 2013)

In the early 17th century, Jan Pieterszoon Coen, the Dutch East India Company’s governor-general in the Indies, explained that trade and war were inseparably linked: ‘we cannot make war without trade nor trade without war’.[1] The utility of war and other violent methods to secure an advantageous commercial position was an extreme view even by the mercantilist standards of the day, but trade and conflict were commonly connected. About one hundred years later, Montesquieu, the Enlightenment political philosopher, reached the radically different conclusion that trade was an instrument of peace; thus in 1748, he wrote ‘Peace is the natural effect of trade’.

Propelled by Adam Smith’s Wealth of Nations (1776), belief in the connection between trade and peace spread. That is, that trade promoted interdependence and prosperity, which enhanced the economic benefits of peace and the economic costs of war. At the same time that the liberal conception of trade gained currency, there were counter-examples – as the trans-Atlantic slave trade of the 18th century and the Opium Wars (1839-42 and 1856-60) – of the non-peaceful pursuit and consequences of trade. Despite such evidence, the association of international trade with a more peaceful and prosperous world became a mainstream view. By the end of the Second World War, British and American governments largely based their conceptions of a peaceful postwar trade order on the liberal tenets of non-discrimination, openness, and reciprocity.[2] But trade disputes and trade-related conflicts persisted nonetheless.

The recurrence over the last five hundred years of trade-related violence, coercion, brutality, destruction and, in its most extreme form, warfare, cannot simply be dismissed as deviations from the norm or as exogenous forces that interfered with the natural development of trade. In nine richly detailed historical case studies, spread over 500 years and spanning the globe, the contributors to the volume explore the dynamic between trade and conflict and examine the consequences of their intersection, direct and indirect, immediate and long-term, anticipated and unexpected, transformative and destructive. The case studies include Portuguese efforts to trade with China in the early 16th century, the Carreira da India in the 17th century, the Haitian revolution, the impact of Napoleon’s continental system on British trade and Brazilian independence, British imperial and global trade in the 1920s and 1930s, Winston Churchill’s political rhetoric on trade, the global wheat war during the Great Depression, the General Agreement on Tariffs and Trade, and US President Richard Nixon’s foreign economic policy, with a far-reaching afterword that explores the long-standing, varied and enduring link between trade and conflict. The contributors break new ground by collectively showing that trade and conflict have been reciprocally constitutive: trade sparks conflict and conflict in turn provokes the adaptation of trade. Scholars who affirm a close association between trade and peace will have to take into account the close and enduring connection between trade and conflict, as will the makers of current trade policy.

While the sum of this volume does not disprove the association between trade and peace, it does show the claim to be one-sided. The contributors see trade as an inherently competitive endeavour in which participants vie to establish their dominance which is achieved by defeating or besting others. The case studies also show that historically conflict has not stopped trade. It sparks dramatic change which creates new opportunities even as it shuts down existing ones. Trade adapts, moves, and recovers, creating new competitive conditions. The intersection of trade and conflict has therefore been transformative or, as Steve Topik has put it, destructively-constructive. The dynamic is reinforcing even when conflict takes its most violent form – warfare. Rather than seeing a zero-sum dynamic defining the relationship between trade and conflict, we have found that the relationship is reciprocal and transformative.

It might be tempting to suggest that the violence that characterized international trade from the 16th to 18th centuries belonged to a more brutal age. But as this volume has suggested, even if the expression of conflict has mostly shifted from physical violence to rhetorical disputes, the encounters remained highly conflictual. Moreover, commercial competition remains a cut-throat contest in which not all will thrive or survive. Neither has the shift from mercantilism to liberalism that demarcated commercial eras accounted for a lessening of violence. Wars have been pursued in the name of free trade. There was also the specific commercial variant – trade war – that provoked anxiety throughout the 20th century. The casualties would no doubt be counted differently from battlefield deaths, but the suffering was expected to be far-reaching and acute. Although it would be understandable to expect that a volume examining the historical intersection of trade and conflict would be a tale of destruction, such a conclusion would misrepresent the powerfully transformative, if painful, impact of trade and conflict that was experienced five hundred years ago and today.

[1]Quoted in R. Findlay and K. H. O’Rourke (2007) Power and Plenty: Trade, War and the World Economy in the Second Millenium (Princeton and Oxford: Princeton University Press), p. 178.

[2]T. W. Zeiler (1999) Free Trade, Free World: the Advent of GATT (Chapel Hill: University of North Carolina Press); F. McKenzie (2002) Redefining the Bonds of Commonwealth: the politics of preference 1939-1948 (Basingstoke: Palgrave). K. Barbieri and G. Schneider (1999) ‘Globalization and Peace: Assessing New Directions in the Study of Trade and Conflict’Journal of Peace Research, vol. 36, No. 4, Special Issue on Trade and Conflict, p. 389.

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