International Trade as a Peace Project

Abstract

This paper explores the importance of international trade in generating both immediate economic benefits and broader benefits of peace. We discuss the theoretical foundations of international trade as a source of economic and non-economic benefits that foster peace. Next, we review the empirical evidence in four categories—(1) evidence in support of the capitalist peace, (2) evidence of the interaction between capitalism and democracy, (3) evidence against the capitalist peace, and (4) evidence on the composition of trade and peace. We then consider three extensions and challenges to international trade and offer responses—(1) the association of capitalism with imperialism, (2) the argument for war by economic means as a source of peace, and (3) the view that international trade requires nation-state liberal hegemony. We conclude with a discussion of how international trade should be viewed as part of an ongoing peace project whereby people engage in an ongoing process of discovering different ways of navigating conflict to live with others.

Keywords: international trade, capitalist peace, democratic peace, imperialism

JEL Classification: F13, F14, P10, P45