Global trade and it's peace dividend- Part 2

Idea of ‘Gentle commerce’ or commerce as a positive sum, wealth creating enterprise is an idea of European Enlightenment. However, that idea went in to various trials and tribulations and finally blossomed to its fully matured meaning only by the end of 20 th century. Interestingly, too many related and simultaneous phenomenon happened in the last two decades of the 20 th century. One was the end of communism and the march of capitalism which lead to demise of an ideologically polarised world. Secondly, knowledge based economy was taking center stage of the global economic order. Thirdly, WTO platform was created to give an institutional framework to regulate and promote global trade. Besides, a large number of technological leapfrogs happened which lead to faster and cheaper movement of goods, service, capital and human beings which resulted in a more connected world than ever before.

 With the rise of knowledge economy, human brains became the most valuable commodity in this planet. Much of the wealth creation in today's world is happening owing to the human ingenuity, technical and scientific know-how, best organisational and management practices and less due to mines and oil wells. Trade among-st the nations became the ’cheapest’ way to gain a valuable product rather than raiding or conquering. Meanwhile, cost of war increased and it ceased to be a profitable enterprise. Gains from peaceful pursuits began to far outweigh any likely gains from wars and raids.

In the modern, post-Soviet world, recognition and honor comes largely from the economic gains that an individual makes out of peaceful pursuits by engaging in economic activities. Countries ceased to debate on ideological pathways, withdrew from war and channelized their aspiration to strive to be a commercial power.  National elites are now being recognized and honored not just by the size of their army they command or the territories they control, but more by the leverage they possess in global economy, the technical know-how and patent they hoards and the standard of living its citizen enjoy. Entrepreneurs and technology czars became new popular icons in place of star studded Generals and medal heavy veterans. Ambitious young men and women channelized their desire for honor and social mobility by pursuing commerce and entrepreneurship. Unlike their forefathers, now they are not required to go to battle fields and die for protecting their ‘honor’.

Knowledge economy also leads us to come out of the Malthusian mentality of scarcity and resource constraints. Primary resources for economic development in today’s world are neither land nor mines underneath, but practically inexhaustible resources in the form of human brains. Hence no country will be deprived of fruits of development and prosperity just by not having enough natural resources within it. In today’s world, all and every country has an opportunity to prosper, if the national government build right kind of institutions and pursue right kind of policies and programmes that are necessary for economic growth.

Global trade in modern times played a catalytic role in propagating this idea of ‘Peaceful emergence’. Trade became a Positive sum gain where both and all the partners involved in it gets prosper. This positive sum gain dynamics alters the incentive for violence. The central idea is 'your trading partner is more valuable when he is alive and exchange goods with you than he is dead and you expropriating his wealth'.  Those nations which opened its borders, not only exchanged goods and services but also ideas, attitudes, and dreams. Trade hence allow people to know more about ‘others’ and their cultures, values and so to respect his life, limbs, property and dignity. In other words, a free market put premium on empathy.

Such a network of inter-dependencies are not just economic changes but also are accompanied by change in attitude. French philosopher Samual Ricards named this phenomenon as ‘Gentle commerce’ where in which society engaged in commerce develops an attitude of ‘Reciprocal altruism’. This reciprocal altruism enables people to be altruistic, at least to extent it is being well rewarded by the market forces and other similar economic actors.

However, this ‘Gentle commerce’ would work effectively only if the trade is happening on account of human ingenuity and entrepreneurial efforts in an open economy and free market setting. If goods can simply mined and sell off to others without having to do any value addition, (for example, rough diamonds, crude oil etc) it will have an entirely opposite effect. Again, if ideas and free thoughts can’t be imported along with consumer goods, it is unlikely to create any positive impacts on society. (For ex, countries like Saudi Arabia). These insular societies starved of ideas from rest of the world will always remain a threat to a pacified world despite having exports and imports of gigantic size.

As a concluding remark, my whole argument can be summarized here. Global trade by itself do not bring peace. However, it has a catalyzing effect in generating certain political, economical and ideological forces that incentivise peace and peaceful resolution of conflicts. Whenever and wherever it’s catalyzing effect does not get effective, or the incentives for peace are outwitted by primordial notions of honor, faith etc, conflicts may happen and wars can erupt. However, even under these circumstances, a web of inter-dependencies and forces of economic integration created by global trade can reduce and contain any such conflicts to a manageable limit. So is the role of global trade in fostering and promoting global peace.