Tuesday, 13 December 2005

Trade versus conquest

Here's something to think about on the subject of trade and conquest:
  • Pre-1940 Japan was a country in desperate recession, with strict trade barriers, no natural resources, and a desperate desire for them. They wanted to secure Malaya's tin and rubber, the Dutch East Indies' oil, and Manchuria's iron ore, coal and agricultural land. To get them, they produced bombs, guns, planes, and they militarised the whole population. Within fifteen years Japan was in ruins, the countries of South East Asia and the South Pacific had been subjected to war and violence and slavery, and millions had been killed. Japan's policy of militarism and conquest had failed, and the whole Eastern hemisphere had paid the price.
  • Post-1940 Japan was a country in ruins, its population in shock, with two major cities destroyed by atom bombs and its capital flattened by fire-bombing -- and still with no natural resources, and an even more desperate desire for them. Within fifteen years however, Japan was thriving, millions were enjoying the fruits of trade and prosperity, and the countries of South East Asia, the South Pacific -- and indeed all the rest of the world -- were enjoying the fruits of Japanese production: cameras, transistor radios and stereos, automobiles and motorcycles, and truly world-class tourists. Japan had found free trade, and the whole world was reaping the benefits.
Trade works. As Frederic Bastiat observed, "when goods don't cross border, armies will." Countries that trade with each other don't go to war with each other: there's too much to lose.

Further, free trade helps quell government's passion for war. "It creates powerful lobbying groups on all sides that demand the preservation of peace and the triumph of diplomacy over hostility. International trade networks create intermediating structures of business relations that work as a barrier to bombs and belligerence."

Trade trumps conquest. Rather than seeing trade itself as a conflict, as something involving embargoes, sanctions and agressive 'trade wars,' we should realise that peace and free trade are mutually dependent. Ludwig Von Mises explained how trade works when he pointed out that the easiest way for Canadians to get watches is to grow grain; the easiest way for the Swiss to get grain is to make watches. This is the harmony of interests given reality by trade. The unfortunate thing is that this lesson took a World War and the death of millions for Japan to learn. After sixty years of peace and prosperity, we may all be glad the lesson has -- for the most part -- been learned. It is one that needs to be re-learned every generation.

With trade, everyone wins. With conquest, no one does. With a policy of trade, the primary reason for production is the production of things that make people happy, keep them housed and fed and generally make their lives better. With a policy of conquest, the primary reason for production is the production of things that destroy, that kill, and that once used are spent.

Trade is good. With trade, everyone wins. Trade is a tool of liberation. It is also a powerful weapon for peace.

Related topics: Economics, War, History-Twentieth_Century, Politics


  1. Nicely Put. Its so obvious an argument, it really irks me so many other countries (and people in NZ) have their heads in the sand on trade issues.

  2. 'Trade is a tool of liberation'.

    Which is precisely why the usual communist suspects masquerading as greens, peaceniks and the myriad of losers to be found screaming and yelling at any anti-globalist rally, hate it.

    It shows their true totalitarian aims.

    'Free' & 'Liberty' are not synonymous with 'Ban' & 'Comply'.

  3. Thanks JJ and Sus for the comments. It's good to know that the time spent writing this sort of piece is appreciated. :-)

  4. PC, just to be devil's advocate - an argument can be made that Japan had NOT discovered free trade, but rather had discovered export oriented trade. Japan allowed inwards free trade for inputs for exported goods, it did not allow such free trade for domestic consumption. It still doesn't for agriculture (and restricts imports for that greater than the EU), and is very restrictive on a whole host of other products and services - the chickens are coming home to roost on some of those.

  5. It could also be pointed out that Japan got into the position of being an economic powerhouse in Asia (as compared to China, which was very insular until the 1911 revolution) by the free trade conditions the country was forced into during the 1800s. Of course, the country closed up as the Japanese military gained more power, and the ultra-nationalists gained office.


1. Commenters are welcome and invited.
2. All comments are moderated. Off-topic grandstanding, spam, and gibberish will be ignored. Tu quoque will be moderated. Links to bogus news sites (and worse) will be deleted.
3. Read the post before you comment. Challenge facts, but don't simply ignore them.
4. Use a name. If it's important enough to say it, it's important enough to put a name to it.
5. Above all: Act with honour. Say what you mean, and mean what you say.