Exclusive: Neoliberal dogma holds that “free trade” brings peace and thus Donald Trump’s criticism of trade deals presages war. But that view is not only bad history but ignores valid points that Trump raises, says James W Carden.
By James W Carden
Shikha Dalmia, a fellow at the Koch brothers-funded think tank, the Reason Foundation, has castigated CATO’s Doug Bandow and The Nation’s Stephen F. Cohen for having the temerity to note that the Republican presidential nominee, Donald J. Trump, has raised several important foreign policy issues which need addressing, and soon.
Those questions include why the United States must play the role of world policeman, whether NATO’s mission is obsolete, why the U.S. always pursues “regime change” when the results – in Iraq, Libya, Ukraine, Syria, etc. – are a “disaster,” and why Russia has been made into an enemy.
Bandow has praised Trump’s independence from the “neoconservatives and militaristic interventionists who dominate the Republican Party,” while Cohen has argued that “Trump’s questions are fundamental and urgent, but instead of engaging them, his opponents (including President Obama) and the media dismiss the issues he raises about foreign policy as ignorant and dangerous.”
But Dalmia dismissed these “Trump-loving peaceniks” for “kidding themselves” because “above all, his militant protectionism will mean more war, not less.” In an article published in The Week on May 31, Dalmia maintained that Trump and those who see some refreshing thinking in his policy statements fail to appreciate the salubrious (and if Dalmia’s analysis is to be believed, perhaps even miraculous) effect free trade has had on international relations since the end of the Second World War.
The story, as told by Dalmia, is by-now familiar: World War II was brought about, in part, because European nations took refuge in mercantilist trade policies in the aftermath of the Great Depression. Today, it is virtually impossible imagining, say, France going to war with Germany. Why so?
According to Dalmia’s ahistoric piece of sophistry, prior to WWII “military conflict was practically de rigueur in Europe.” (It wasn’t. Between 1871- with the end of the Franco-Prussian war – and 1914 the peace was largely kept on the continent but for a brief Russian-Turkish war in 1877. But never mind.)
What caused this supposedly momentous change in the politics of the continent after World War II? Dalmia tell us that it wasn’t “NATO’s security guarantee” that “put an end to the great wars of dictators. Trade did. Indeed, the more countries trade and the more partners they trade with, the less likely they are to go to war.”
Trade Equals Peace?
This is what is commonly known as the theory of economic interdependence which holds that high levels of trade between countries will inexorably result in global peace and stability. It is said that countries that trade with each other have less motive to fight one another and countries will avoid costly wars that only serve to undermine their mutually beneficially trade relations.
As Dalmia puts it: “trade doesn’t just eliminate reasons for war, it generates forces of peace: Attacking your trade partner means either destroying your buyers or your supplier or both. Trade gives each side a stake in the other’s well being.” This, she worries, is lost on Mr. Trump.
This kind of thinking, such as it is, was the regnant ideology in Bill Clinton’s Washington and was used with abandon to disguise aggressive geopolitical actions – such as the expansion of NATO eastwards – by couching them in the benevolent rhetoric of neo-liberalism.
In a West Point commencement address in 1997, Clinton claimed that “our security is tied to the stake other nations have in the prosperity of staying free and open and working with others.” NATO expansion would, according to Clinton’s Deputy Secretary of State Strobe Talbott, help to create a Europe “increasingly united by a shared commitment to open societies and open markets.”
From the vantage point of 2016, the increasingly authoritarian nature of the governments in Poland, Hungary and Estonia, to say nothing of the war in Ukraine, have put an end to these grand ambitions.
Yet, is there any compelling reason to give credence to Dalmia’s claim that “the more countries trade and the more partners they trade with, the less likely they are to go to war?” Not really.
To see why, lets examine the years leading up to the First World War. In The Economic Consequence of the Peace, John Maynard Keynes opens his account of the Versailles negotiations by describing the situation on the continent as it obtained during the mostly peaceful 45-year period from 1870-1914.
“What an extraordinary episode in the economic progress of man that age was which came to an end in August 1914!” he exclaimed.
What was taking place was nothing less than what the neo-imperialist economist and historian Niall Ferguson has called “the first age of globalization.”
Keynes tells us that before the war, an illusion of permanence held sway over the middle and upper European classes, indeed, “the projects and politics of militarism and imperialism, of racial and cultural rivalries … appeared to exercise almost no influence at all on the ordinary course of social and economic life, the internationalization of which was nearly complete in practice.” [emphasis mine]
Still more, according to Keynes, “the interference of frontiers and of tariffs was reduced to a minimum, and not far short of three hundred millions of people lived within the three Empires of Russia, Germany and AustriaHungary … over this great area there was an almost absolute security of property and of person.” Keynes observed that “the statistics of economic interdependence of Germany and her neighbors are overwhelming.”
Sounds like a free trader’s paradise, one which Dalima and the rest of Washington’s neoliberal cheerleaders would happily approve. And yet, by August 1914, the war came. Trade was no match for the toxic brew of nationalism and populism unleashed by an assassination in Sarajevo.
Nevertheless, while the idea that free trade paves the way for peaceful inter-state relations is wholly unsupported by the historical record, it remains oddly pervasive over a century after the commencement of the Great War. Even worse, it becomes the trusted panacea that prevents a critical examination of other foreign policy illusions that could be laying the groundwork for another war.
James W Carden is a contributing writer for The Nation and editor of The American Committee for East-West Accord’s eastwestaccord.com. He previously served as an advisor on Russia to the Special Representative for Global Inter-governmental Affairs at the US State Department.
The proposed “Free” Trade deals across the Atlantic and the Pacific oceans are nothing but “carte blanche’ for multinational companies, most of them of US origin. To even contemplate the possibility of a global company taking a nation to a “kangaroo court like
tribunal is just mind-boggling. Forget it!
The tremendous amount of trade and economic interdependence between Ukraine and Russia did not prevent war from breaking out in 2014. So “free trade = peace” was unfortunately incorrect before WW I, and it is demonstrably incorrect now.
Perfect time to discuss this James W Carden. Your statement: “This is what is commonly known as the theory of economic interdependence which holds that high levels of trade between countries will inexorably result in global peace and stability.” is what I learned in Econ. 101 in the mid 60’s. It probably still is largely true except that what we see in trade “agreements” is something akin to an unreliable narrator. I first realized this when I read the “Devil’s Chessboard” by David Talbot. The Dulles brothers were negotiating in Versailles, retributions against Germany, and those were so outrageous that they were nearly impossible for the German people to overcome in one lifetime. In conditions like that; sensible penalties are the reasonable and diplomatic solution. The Dulles brothers are often behind much of our contemporary ills. I see the same disingenuousness in the text of trade agreements (when revealed). So the problem is not so much trade agreements but who writes, negotiates and approves of them.
The Clinton’s have proven to be unreliable negotiators in foreign relations, much like Alan Dulles and his brother John Foster…
I am sorry but maybe Trump should make a FDR speech
Indeed. Trade in the form of legalized extortion and coertion (vide TTIP), disguised under the mask of something ‘free’, is more likely to lead to hatred, despair, and a violent reaction, than almost anything else.
Q : ‘Free’ what, anyway?
A : ‘Free to compete, and be crushed, if you’re a small country, or a small business.
Here is an article that explains how the current administration appears to be attempting to start a new global trade cold war:
The haste to sign the Trans-Pacific Trade Agreement is being driven by one factor; the pathological need for the United States to beat China at its own game and start a “trade cold war”.
Take another look at containment. China has already successfully countered it with a profitable pivot to the Atlantic. Freight trains now follow the old spice trails from the Chinese Pacific to Madrid, capital of Spain.
The US war machine pivot to the Pacific rests on borrowed billions while the Chinese container railroad pivot to the Atlantic is a money maker.
What a crock of limousine liberal baloney: “free trade” brings peace, what a knee-slapper that is. “Free trade” is a euphemism for the transfer of profits extracted from U.S. workers to business investment abroad. If limousine liberals and Republicans are now using the “world peace” argument to dress up their support for “free trade” it’s nothing more than morally and ethically repugnant.
I wish I knew what Trump would be likely to do if elected president. He lies more than any other candidate, by politifact statistics. And he changes his mind frequently. And although he is interested in and successful in negotiating, sales, and real estate, he doesn’t seem to have much interest in most aspects of government. So if elected, I can only imagine he will hand almost everything over to other people. Therefore, it seems prudent to look at the people he surrounds himself with.
>He lies more than any other candidate, by politifact statistics.
Hillary has that title. People died and were tortured because of her support for war and torture.
Doesn’t Trump want war and torture too? All US presidents since 1950, in effect, have promoted war and torture.
A good point, but look at the disastrous “choices” made by POTUS Obama for nearly every important position in his maladministration.
As the Consortium has noted in at least one previous article on Iran, a larger cause of WW2 wasn’t lack of trade or U.S. ‘leadership’ but rather the perception by the Germans that the treaty of Versailles was illegitimately imposed on them and to be resisted. Whether you consider it harsh or not is irrelevant, the Germans believed it to be so and fully agreed to the rearming of their military. After WW2 the allies treated Germany far differently and had far better results. Trade was a small factor.
Treating another country with respect and dignity paid dividends, it is not ‘appeasement’. Now today, the U.S. and NATO are determined to replay the 1980’s playbook but with greater abandon. Unless Trump gets elected, this will not end well.
Trade certainly demotivates aggressive war among trading partners, but does not prevent it. There was lots of trade before WWI, but not nearly so much as today. The other causes of WWI (interlocking mutual-defense treaties, the assassination, German fears of the France-Russia connection, etc.) predominated.
And trade is not necessarily “free trade” by any definition. Vigorous trade and economic dependency demotivate war and promote communication. But perhaps “free trade” meaning secretive agreements beyond domestic law may not necessarily have those effects.
These five questions are crucial and worth answering:
1. Should the United States always be the world’s leader and policeman?
2. What is NATO’s proper mission today, 25 years after the end of the Soviet Union and when international terrorism is the main threat to the West?
3. Why does Washington repeatedly pursue a policy of regime change, in Iraq, Libya, possibly in Ukraine and now in Damascus, even though it always ends in “disaster”?
4. Why is the United States treating Putin’s Russia as an enemy and not as a security partner?
5. And should US nuclear-weapons doctrine include a no–first use pledge, which it does not include?
Dalmia doesn’t really say what’s wrong with these questions but, after a couple of inconclusive comments, introduces her subject: “Most troubling, however, is his prescription to “Make America Great Again” — which is to seal it off from the world by erecting walls, tearing up trade agreements, and forcing American companies to stay put.” Two of those topics merit further discussion, but she instead instead jumps to the claim that Trump is an isolationist and doesn’t believe in trade (hence the title of her article: “The foolishness of Trump Isolationism”). She uses what you refer to as “the theory of economic interdependence” to claim that an isolationist trade policy will lead to war.
You do an excellent job of undermining this principle with historical facts.
There still are some questions I’m interested in, and they are:
• Is Trump an isolationist? I don’t think so but that would require some discussion.
• What’s wrong with the five questions?
To me each of them demands an answer, and I think in asking these questions Trump reveals a good grasp of the current situation.
Thank you for your article.