Trade versus Conquest

Peter Cresswell's picture
Submitted by Peter Cresswell on Mon, 2005-12-12 21:47

Here's a lesson from history on the subject of trade and conquest, and which one of the two methods of inter-human interaction works best. Think about it:

* Pre-1940 Japan was a country in desperate recession, with strict trade barriers, no natural resources, and a desperate desire for them. They wanted to secure Malaya's tin and rubber, the Dutch East Indies' oil, and Manchuria's iron ore, coal and agricultural land. To get them, they produced bombs, guns, planes, and they militarised the whole population. Within fifteen years Japan was in ruins, the countries of South East Asia and the South Pacific had been subjected to war and violence and slavery, and millions had been killed. Japan's policy of militarism and conquest had failed, and the whole Eastern hemisphere had paid the price.
* Post-1940 Japan was a country in ruins, its population in shock, with two major cities destroyed by atom bombs and its capital flattened by fire-bombing -- and still with no natural resources, and an even more desperate desire for them. Within fifteen years however, Japan was thriving, millions were enjoying the fruits of trade and prosperity, and the countries of South East Asia, the South Pacific -- and indeed all the rest of the world -- were enjoying the fruits of Japanese production: cameras, transistor radios and stereos, automobiles and motorcycles, and truly world-class tourists. Japan had found free trade, and the whole world was reaping the benefits.

Trade works. As Frederic Bastiat observed, "when goods don't cross border, armies will." Countries that trade with each other don't go to war with each other: there's just too much for them to lose, and too many voices calling a halt.

Free trade helps quell government's passion for war. "It creates powerful lobbying groups on all sides that demand the preservation of peace and the triumph of diplomacy over hostility. International trade networks create intermediating structures of business relations that work as a barrier to bombs and belligerence."

Trade trumps conquest. It makes lives better. Rather than seeing trade itself as a conflict, as something involving embargoes, sanctions and agressive 'trade wars,' we should realise that peace and free trade are mutually dependent. Ludwig Von Mises explained how trade works when he pointed out that the easiest way for Canadians to get watches is to grow grain; the easiest way for the Swiss to get grain is to make watches.

What Mises describes is the harmony of interests given reality by trade. The unfortunate thing is that this lesson took a World War and the death of millions for Japan to learn. After sixty years of peace and prosperity, we may all be glad the lesson has -- for the most part -- been learned. It is one that needs to be re-learned every generation.

With trade, everyone wins. With conquest, no one does. With a policy of trade, the primary reason for production is the production of things that make people happy, keep them housed and fed and generally make their lives better. With a policy of conquest, the primary reason for production is the production of things that destroy, that kill, and that once used are spent.

Trade is good. With trade, everyone wins. Trade is a tool of liberation. It is also a powerful weapon for peace.

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That's presuming

Robert Malcom's picture

they know how to read.

A very eloquent example

Phil's picture

A very eloquent example drawn from the 20th century. I hope some of those antiglobilization protestors that you see all hot under the collar when representatives from various countries meet and discuss evil of trade, read this.

Excellent Post

Jason Quintana's picture

That is a world class post Peter.

- Jason

Power and Market: Either or.

milesian's picture

Thanks for the essay, Peter. It is a nice bit of work.
It is too bad that we do not have SOLO Points here.
"I have slipped the surly bonds of Earth
and danced the skies on laughter-silvered wings."

And the same can be said

Scott Wilson's picture

of western Europe, despite what is bad about the EU, it also has been a vehicle for liberalising trade within its boundaries, which has worked partly because those boundaries have been extended periodically.

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