Classical Liberalism - Free Trade and World Peace

Free Trade and World Peace

Several liberals, including Adam Smith and Richard Cobden, argued that the free exchange of goods between nations could lead to world peace, a view recognised by such modern American political scientists as Dahl, Doyle, Russet, and O'Neil. Dr. Gartzke, of Columbia University states, "Scholars like Montesquieu, Adam Smith, Richard Cobden, Norman Angell, and Richard Rosecrance have long speculated that free markets have the potential to free states from the looming prospect of recurrent warfare." American political scientists John R. Oneal and Bruce M. Russett, well known for their work on the democratic peace theory, state:

The classical liberals advocated policies to increase liberty and prosperity. They sought to empower the commercial class politically and to abolish royal charters, monopolies, and the protectionist policies of mercantilism so as to encourage entrepreneurship and increase productive efficiency. They also expected democracy and laissez-faire economics to diminish the frequency of war.

Adam Smith argued in the Wealth of Nations that, as societies progressed from hunter gatherers to industrial societies, the spoils of war would rise but that the costs of war would rise further, making war difficult and costly for industrialised nations.

...the honours, the fame, the emoluments of war, belong not to ; the battle-plain is the harvest field of the aristocracy, watered with the blood of the people...Whilst our trade rested upon our foreign dependencies, as was the case in the middle of the last century...force and violence, were necessary to command our customers for our manufacturers...But war, although the greatest of consumers, not only produces nothing in return, but, by abstracting labour from productive employment and interrupting the course of trade, it impedes, in a variety of indirect ways, the creation of wealth; and, should hostilities be continued for a series of years, each successive war-loan will be felt in our commercial and manufacturing districts with an augmented pressure. Richard Cobden When goods cannot cross borders, armies will. – Frédéric Bastiat By virtue of their mutual interest does nature unite people against violence and war…the spirit of trade cannot coexist with war, and sooner or later this spirit dominates every people. For among all those powers…that belong to a nation, financial power may be the most reliable in forcing nations to pursue the noble cause of peace…and wherever in the world war threatens to break out, they will try to head it off through mediation, just as if they were permanently leagued for this purpose. (Immanuel Kant: The Perpetual Peace.)

Cobden believed that military expenditures worsened the welfare of the state and benefited a small but concentrated elite minority, summing up British imperialism, which he believed was the result of the economic restrictions of mercantilist policies. To Cobden, and many classical liberals, those who advocated peace must also advocate free markets.