Download a pdf of this Backgrounder Steven A.
Quantitative studies have shown that trade fosters peace both directly, by reducing the risk of military conflict, and indirectly, by promoting prosperity and democracy.
Globalization can be understood as a process of market expansion and market integration, as the universalization of capitalism.
After a short discussion of the political economy of globalization, I turn to the frequently overlooked security benefits of globalization. The diffusion of prosperity, free trade, and democratization is part of the story.
Quantitative studies provide a great deal of evidence for a causal chain running from free trade via prosperity and democracy to the avoidance of military conflict, as well as for another causal relationship between trade or economic openness and conflict avoidance.
After a review of the quantitative literature and a discussion of some methodological issues, I illustrate the capitalist peace by historical examples and contemporary applications. The Political Economy of Globalization The process of globalization had already begun in the late nineteenth century.
Before World War I, trade and foreign investment were fairly globalized.
Because of low political obstacles to international migration, labor markets actually were more globalized at the beginning of the twentieth century than at its end.
The two world wars and the Great Depression between them interrupted the process of global market integration for about half a century. Thereafter, the process regained force and speed. Now, inexpensive, fast, and reliable communication and transportation enable producers of goods and some service providers in low-wage countries to challenge high-cost producers in rich countries on their home turf, but technological innovation resulting in falling prices and rising speed of intercontinental communication and transportation is not the only determinant of globalization.
Political decisions in rich and poor countries alike contribute strongly to globalization, too. Tariffs and, to a lesser degree, nontariff barriers to trade have been reduced.
Many countries try to find and exploit their comparative advantage, to realize economies of scale and gains from trade by looking for buyers and sellers everywhere.
If trade between countries is truly free, then it promises to enrich all nations.
In principle, globalization is the logical endpoint of the economic evolution that began when families switched from subsistence farming and household production to production for the market.
As long as globalization is not yet completed-and it certainly is not yet-gains from trade remain to be realized by further market expansion. Because globalization adds to competitive pressure, however, it causes resentment, and because globalization springs from technological innovation and political decisions that promote free trade, these innovations and decisions attract resentment, too.
The world is already globalized enough that national resistance does limited damage.
Free trade is vulnerable. If foreigners are perceived as a cause of the need to adjust, then attacking free trade becomes politically attractive.
After all, no politician benefits from the affection of foreigners who cannot vote. Of course, economists who insist on the benefits of free trade even if your trading partner does not practice free trade are right.In L'Express, the French news magazine, Canadian academic, and environmental activist David Suzuki called Canada's immigration policy "disgusting" (We "plunder southern countries to deprive them of their future leaders, and wish to increase our population to support economic growth") and insisted that "Canada is full" ("Our useful area is reduced"), even though Canada has one of the smallest .
Immigration should be a mutually beneficial and respectful relationship between Canada and immigrants. Immigration policies should be designed to promote not only overall economic growth but, more important, per capita GDP growth.
This study on the impact of broadband on the economy was prepared by Dr. Raul Katz, Director, Business Strategy Research, at the Columbia Institute for . investigating the nature of the causal relationship between immigration and two macroeconomic indicators, GDP per capita and unemployment by using Greek data during the period between .
Canada: Survey of Labour and Income Dynamics, The education status of immigrants varies considerably. Just like the relationship between younger and older native-born people, young immigrants are generally much more educated “Immigration and Economic Growth in the OECD Countries A Panel Data Analysis.
There is a gap between theory and quantitative evidence.
Theoretically, one expects a relationship between the level of economic freedom and growth rates. Empirically, however, the relationship between improvements in economic freedom and growth looks more robust than the relationship between the level of freedom and growth. 5.