World Peace Through World Trade
William H. Peterson
by William H. Peterson
Think of a still green high-school graduate from Jersey City, me, arriving on his first day as a mail clerk in 1938 at 590 Madison Ave., N.Y., IBM headquarters. There I — then also a new after-hours undergraduate studying economics at New York University — got a lesson not just on free trade's raising productivity in participating countries nor its power to thereby lift living standards, including those of the poor, but on its power to wage peace. Peace. Peace.
For on an outside wall at the entrance was a huge 40-foot-high vertical sign, painted in black and gold, reading ...
That thought was the brainstorm of Thomas J. Watson, founder and head of IBM, who also served as president of the Paris-based International Chamber of Commerce. He had apparently worried about the dubious outcome of World War I, the League of Nations, and the vicious rise of Adolph Hitler in Nazi Germany and of Joseph Stalin in the Soviet Union. Yet he also saw how voluntary peaceful trade lifts living standards and so directly benefits people. So he prodded the world to see the folly of war as armed forces unknowingly shoot or bomb customers and investors, actual or potential — so denying the peace underlying what Ludwig Mises called "social cooperation."
Yes, Mr. Watson was not an economist but surely his case for world trade spurring world peace makes sense. Think of rising interdependency as trading nations rely more and more on each other for selling or buying or both. Or think of the spontaneity or social cooperation involved — friendly relations amid rising international commerce. Or think how international division of labor leads to greater economic growth — to more profits and higher wages. Or think how lessening or eliminating trade protectionism cuts back corruption and special interests in the halls of government — corruption that often conflicts with peaceful relations among nations.
Yes, such reasoning may be well and good but by 1939 Hitler from the west and Stalin from the east in a strange alliance invaded and in a few weeks time divvied up Poland. World War II was on.
Yet wars later we still find ourselves once again locked in combat, bleeding, this time in Afghanistan and Iraq — but not just against armed insurgents a la Vietnam but also against "jihadists" or suicide bombers. For jihadists in our so-called War on Terrorism intend to not only destroy themselves but — and this is critical — others, usually innocents in an "enemy" state. Look. They've already so hit Madrid and London but got foiled in near-by Toronto.
Well, can jihadists be stopped here in America, free of terrorist attacks for more than five years after 9/11? Maybe. Yet much more so if we practice truly free trade. (Not so-called "fair" or bilateralized trade but, if need be, unilateral free trade — and why not?) For then we'd not only fight poverty here and in places like Africa but enjoy a likely growing realization among the jihadists themselves, along with their intelligensia, that their chosen "enemy," including you and me, is in fact the friend and helpmate of their very own people.
Yet the rub with the current situation is the Democrat takeover of Congress on November 7th by protectionists galore, seemingly masterminded by Lou Dobbs of CNN. He and they, full of economic venom for China, should be reminded that protectionism inadvertently courts further jihadism and a lost War on Terrorism.
In any event, I thank you, Thomas J. Watson, upstairs, for pointing out the pleasant fact of life of "World Peace Through World Trade." That fact may save our neck in a race against time, in a race for free trade.
November 20, 2006
William Peterson [send him mail] is an adjunct scholar at the Ludwig von Mises Institute and the 2005 Schlarbaum Laureate.
Copyright © 2006 William H. Peterson