Does free trade lead to peace?

[Sympo]

I'm sure many on this forum has heard this argument before but I'm gonna try to explain the idea in a simplified matter.

Basically, some pro-capitalists believe that the more economically intertwined states are, the less likelyhood is there that there's gonna be a war between those states. That's the impression I have from it, anyway.

What is the main issue with this reasoning?

Is it impossible for all states to have good economic relations with eachother? If so, why is this so?

[Lew]

Sympo wrote:

Basically, some pro-capitalists believe that the more economically intertwined states are, the less likelyhood is there that there's gonna be a war between those states. 

Britain, France and Germany were very economically intertwined (they also shared basically the same religion), but that didn't stop WW1 and WW2.– Lew

[Anonymous]

Sympo wrote:

Is it impossible for all states to have good economic relations with eachother? If so, why is this so?

In a word, capitalism.  It is the cause of the rivalries that lead to war in the modern world. In general, these conflicts between states and within states are over property. Specifically, it is competition over markets, sources of raw materials, energy supplies, trade routes, exploitable populations and areas of strategic importance. Within each state in the world there is a conflict of interests over social priorities. But all over the world there are conflicts of interest between states which lead to war when other means fail.Under capitalism social production takes place for profit, not directly for human need. It is this global system of competitive accumulation that creates the rivalry that leads to war.

[Sympo]

Lew wrote:

Britain, France and Germany were very economically intertwined(…)but that didn't stop WW1 and WW2.

Did Nazi Germany really trade a lot with France/Britain prior to WW2? What's the reason behind the fact that European nations have not fought eachother post-WW2? Was it because of the Soviet state capitalist threat?

[Sympo]

gnome wrote:

It is this global system of competitive accumulation that creates the rivalry that leads to war.

Why isn't it possible for all capitalist nations to benefit from cooperation with eachother? Can't they all get satishfied?

[Anonymous]

Sympo wrote:

Why isn't it possible for all capitalist nations to benefit from cooperation with eachother? Can't they all get satishfied?

To simplyfy it even further. Why can't balliffs work in harmony with  people who can't afford their mortgage?  Irreconcilable conflict of economic interests.Why can't the seller of labour power live in harmony with the buyer of labour power? Same reason.  You cant have harmony and capitalism

[Sympo]

Vin wrote:

You cant have harmony and capitalism

Why exactly though isn't it possible for nations to "cut the cake" so that both nations feel like they have gotten their fair share? Doesn't states often want to avoid war?

[Bijou Drains]

Sympo wrote:

Vin wrote:

You cant have harmony and capitalism

Why exactly though isn't it possible for nations to "cut the cake" so that both nations feel like they have gotten their fair share? Doesn't states often want to avoid war?

i suppose it's  a bit like the mafia. Yes at times organised criminals can get together to share out the spoils of their ill gotten gains in a way that is established as fair. The mafia did this to some extent in the 40s and 50s. But then one section or gang decides they do t like the way the deal is cut so gang warfare breaks out. Similarly with capitalism, one group don't like the way it's working for them and in some cases war can be the consequence.

[Anonymous]

Sympo wrote:

What's the reason behind the fact that European nations have not fought eachother post-WW2? Was it because of the Soviet state capitalist threat?

Dominant trading blocs and spheres of influence change over time for a variety of reasons – allies can become bitter enemies in the blink of an eye.Italy and Germany had long before 1914 entered into the colonial scramble but they developed late and found all the best territories and strategic ocean highways already dominated by the 'older and fatter bandits'. The line-up before 1914 was, on the one side, the 'Triple Alliance' of Germany, Italy and the Austro-Hungarian Empire, and arrayed against their expansionist ambitions the 'Triple Entente' of Britain, France and Russia. The background of the first world war was the clash in the Balkans. Germany aimed to move through the Balkans across the Dardanelles and onwards, taking in the Middle East with its oil resources and strategic importance. It was given dramatic expression in the planned Berlin-Baghdad railway. Such a thrust meant cutting off Russia from its Balkan protégés and an outlet to the Mediterranean, and meant severing the British Empire life-line through the Suez Canal to India and beyond.When WW1 came in 1914 Italy deserted the Triple Alliance while Turkey joined it. Part of the Allied bribe to Italy was the secret promise of a rich share in the spoils of victory – a promise which Italy claimed was never kept.Later on, in the early nineteen-twenties, with Germany prostrate and Russia weakened by the civil war and Allied intervention, Europe was dominated by France and the French system of alliances with Poland, Czechoslovakia and Romania, a system aimed both against the revival of Germany and against Russia. The British Government, following its traditional European balance of power policy, saw the need in the interest of British capitalism of helping Germany recover to offset French preponderance. A new factor came into being after the world crisis in 1931: the coming to power in Germany of the Hitler dictatorship.The 1931 crisis was the breakdown in the system of international payments. Country after country went off the gold standard. The Wall Street crash of 1929 had triggered off a slump in trade and a contraction of the world market. Gold became concentrated in the hands of capitalists in the USA., Britain, France and the countries associated with them. These states also had a monopoly of access to most of the sources of raw materials in the world. The world thus became divided into two groups; those countries which had the gold and raw materials and those which lacked them. Germany, Japan and Italy were in the second group and in a bid to solve the problems this presented, the governing parties organised on an aggressive totalitarian basis and resorted to policies which challenged the other, dominant group. To get gold and currencies to buy essential raw materials the totalitarian states tried dumping, i.e. selling their products below cost. In their trade with other countries they used devices which avoided gold, such as barter and bilateral trade agreements and credits which had to be used to buy their goods.All these devices tended to tie their trading partners to them and thus take them out of the world market. The decline in the use of gold threatened the financial centres of London and New York. London was also threatened as the centre of dealings in raw materials. Pursuing these policies Germany had considerable success in Southern Europe and Latin America. Japan made headway in the markets of Southern Asia. In 1931 Japan used armed force in Manchuria to set up a trading monopoly there. In the past the imperialist powers had decided on an open door policy for trade with China as none of them was strong enough to exclude all the others. Now Japan was trying to do just this, a policy which inevitably led to conflict with America and Britain. Italy used force to get an overseas market in Abyssinia in 1935.The dominant powers decided on a determined campaign to regain the markets lost to the totalitarian countries. German, Japanese and Italian goods were boycotted. Credits were offered to the countries of Southern Europe to win them away from dependence on Germany. The more successful these policies were the more desperate became the economic position of German capitalism. Without the funds to give credits, force appeared to be the only way. Hence the annexation of Austria in 1938 and the breaking up of Czechoslovakia in 1939.By now the conflict of economic interests was coming to a head. Germany was trying to keep its gains in Southern Europe by all means, including force, and Britain and France were using credits to undermine German influence. There was no backing down on either side. War would break out as soon as Britain and France decided to resist force with force. This was delayed as long as possible, particularly because of the vague anti-war feelings of British and French workers; but in September 1939 when Germany invaded Poland the second world war began.In a few years Russia and the USA were drawn in also. It was a war which blazed over all Europe and Asia and parts of Africa. The second world war was fought between rival groups of capitalist states over markets and sources of raw materials. It was not about democracy or Fascism. No one country can be blamed as the capitalist system is international. It was capitalism which caused the rival states to come into conflict. The contraction of the world market in the nineteen-thirties led to more intense competition and after a series of minor clashes to WW2.

[robbo203]

 Hi Sympo Yes its fairly familiar argument you are referring  to.  It is grounded in the dogma that free trade is a necessarily a "positive sum game" – meaning both parties to a market transaction must necessarily benefit from it – assuming it is freely carried out without coercion – otherwise the transaction simply wouldn’t happen in the first place.  The seller wouldn’t sell if the price was too low in her view and the buyer wouldn’t buy if the price was too high in his view. Ergo, insofar as they agree on a price they must both be more or less happy with it (meaning it satisfies both their interests). Marx himself noted this argument in Capital vol 1 (I think) and more or less took the view that it was a truism.  Free market types then take this basic argument and extend it into a general statement along the lines that if we had a genuine free market economy this would eliminate the kind of conflicting interests that lead to war.  What would be promoted instead is the mutual interest implicit in free trade, thereby crowding out the prospect of war I think the argument is bogus for several reasons 1)       the fact the both parties to a market transaction benefit from it does not mean , of course , they don’t still have conflicting interests.  This conflict takes the form of haggling. But even when a price is finally agreed it is still the case the buyers’ interests would have been better served had the agreed price been lower and, conversely, the sellers’ interests would have better served had the agreed price been higher.  There remains in other words the seed corn of potential conflict at all times.  To put it simply, if a buyer was in a situation to seize by force something that the seller was selling it is not out of the question that the cost of doing so might be less than the cost of buying it.  That would make war or military conquest an attractive option in some cases e.g. colonialism 2)       As is typical of free market types, they cannot see the wood for the trees.   This is the basic problem with their whole approach which is based on “methodological individualism” .  That means focussing single-mindedly on the single market transaction in question in splendid isolation from everything else that is going on around it.  For instance, a seller and a buyer might strike a deal but this might very well have the effect of damaging the interests of another potential seller, for example who had been deliberately excluded from the proceedings and might feel aggrieved as a result. Here too we see the seed corn of potential conflict that could lead to war 3)       Free marketeers look upon trade as a matter of purely rational self-interest.  The basic argument they put is that it not in the rational self-interest of anyone to engage in war since the costs involved are likely to exceed the benefits gained.  This is naïve because it overlooks that war is not simply a matter of rational self-interest.  On the contrary the drive to war normally engages irrational factors such as nationalistic sentiments to an extraordinary degree and the problem is that once you get locked into the logic of nationalism,  it is all too easy to be pushed over the edge into a war situation by the sheer momentum and fanaticism of nationalist irrationalism itself But our free marketeers don’t seem to understand that you cannot really have a market without a state.   These two institutions are like Siamese twins.  One could not survive without the other – at least not in the modern world of capitalism.  So while it is primarily states that wage wars rather than private business corporations, they both need to each other albeit for different reasons. And that’s the problem. Since you cannot have such a thing as a stand-alone free market economy without a state, it follows you cannot disentangle or detach yourself from what goes with the modern state itself – namely nationalism and by extension the possibility of war that is built into a nationalist worldview

[alanjjohnstone]

Quote:

Did Nazi Germany really trade a lot with France/Britain prior to WW2?

I did a quick google on this Before the war, 70% of Germany's export trade was with European countries, mostly the Netherlands, France, and England

[Anonymous]

Is there anything known as Free Trade in the capitalist society ? 

[Sympo]

robbo203 wrote:

I think your reply was good but I would like to play devil's advocate here and question a few things."For instance, a seller and a buyer might strike a deal but this might very well have the effect of damaging the interests of another potential seller, for example who had been deliberately excluded from the proceedings and might feel aggrieved as a result."Can't the second seller get in on the action (i.e. why can't the buyer buy half of X from seller 1 and half from seller 2)?"On the contrary the drive to war normally engages irrational factors such as nationalistic sentiments to an extraordinary degree"Are capitalist states inherently irrational? Is there no way for them to permanently stay away from extreme nationalism?

[Sympo]

alanjjohnstone wrote:

I did a quick google on this Before the war, 70% of Germany's export trade was with European countries, mostly the Netherlands, France, and England

That only tells us how much of Germanys exports that went to France and Britain though. It doesn't tell us how much Germany traded with France and Britain. From what I've heard, Nazi Germany aspired autarky. Isn't that true?

[Anonymous]

It is the socialist case that war is part of capitalism and to back that claim up capitalism has never had a day of peace. What is the likelyhood of that changing? 

[Author]

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