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The liberal peace – a capitalist peace? Lecture at HEI, 10 May 2007 Course E 584 Topics in Peace Research. Nils Petter Gleditsch Centre for the Study of Civil War (CSCW at International Peace Research Institute, Oslo (PRIO) & Department of Sociology and Political Science,

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    1. The liberal peace – a capitalist peace?Lecture at HEI, 10 May 2007Course E 584 Topics in Peace Research Nils Petter Gleditsch Centre for the Study of Civil War (CSCW at International Peace Research Institute, Oslo (PRIO) & Department of Sociology and Political Science, Norwegian University of Science and Technology

    2. A puzzle • The democratic peace: Democracy (at the dyadic level) is a sufficient condition for peace • A market economy is a (monadic) necessary condition for democracy • A + b = ? – nothing, really • But the debate about the capitalist peace arises out of this puzzle

    3. Four intersecting topics • The Liberal Peace • Globalization and conflict • How development modifies the liberal peace • The capitalist peace

    4. Brief history of the liberal peace • Kant (1795/1991: 114): ‘the spirit of commerce sooner or later takes hold of every people, and it cannot exist side by side with war’ • Montesquieu, Adam Smith: Market interests run counter to war • John Stuart Mill (1861/1998): Market forces render war obsolete • Norman Angell (1909/1938: 60): It has become impossible for one nation to seize by force the wealth or trade of another … war, even when victorious, can no longer achieve those aims for which peoples strive • Polachek (1980): Trade reduces conflict • Levitt (1983): Globalization • Rosecrance (1986): Trading states • Russett & Oneal (1996, 2001, etc.): The three-legged Kantian Peace • Barbieri (1996): Trade  conflict • Hegre (2000), Mousseau (2002, 2003): Economic limitations to the liberal peace • Weede (2004), Gartzke (2007): The capitalist peace

    5. Definition of globalization Globalization is a historical process where the world is tied more closely together on several levels - economically - technologically - ecologically - culturally - politically • the ‘process by which the experience of everyday life ... is becoming standardized around the world’ (Encyclopedia Britannica) • … increasing global connectivity, integration and interdependence in the economic, social, technological, cultural, political, and ecological spheres (Wikipedia) • A network of mutual dependence between continents • De-territorialization • Modernization? Westernization? • Uneven speed in different areas and different processes • Counter-reactions? (Jihad vs. McWorld)

    6. Alleged consequences of globalization • Security • More peace in a democratic and interdependent world? OR: Global anarchy and chaos, intolerance, and violence, civil war, fundamentalism, terrorism, drug trade? • More environmental cooperation? OR: Higher environmental insecurity? • Economic development and security? OR: More unemployment, mass flight of qualified labor to developed countries, political instability? • Greater mutual understanding? OR: Cultural imperialism? • End of history? OR: Clash of civilizations? • Inequality • Economic growth and welfare (as in Botswana, Chile, China, Hungary), human rights and women’s rights on the political agenda, WB and IMF changing? OR: Greater income differences within and between countries, between urban and rural areas? • Democracy • Diffusion of democracy, information society, Internet, new media? OR: Elite democracy, digital divide  Globalization at the root of all that is good and all that is evil?

    7. Grand theories of globalization? Liberalism • Globalization has transcended the state system, which opens up many new opportunities that are difficult to anticipate. Trade reduces conflict Radicalism • Globalization is but a new stage in international capitalism (economic imperialism). Trade exacerbates conflict Realism • Globalization influences our social, economic and cultural lives, but power politics and the interstate struggle for security is more fundamental. Trade is irrelevant to conflict

    8. Liberalism and globalization • Central thinkers: Locke, Bentham, Smith, Ricardo • Central concepts: Freedom, equality, property rights • Basic development optimism, harmony • Everyone gains from international trade and interaction via comparative advantage • Free markets and open economy is important for development because of competition

    9. Radicalism and globalization • Central thinkers: Rousseau, Marx, Lenin • Central concepts: Class struggle and revolution • Capitalism to blame for the gap between rich and poor • Private property breeds inequality • Trade leads to conflict (structuralists, neo-marxists) • Trade leads to war (marxists, leninists) • Markets must be governed • Revolution

    10. The liberal model Open economy Economic development Peace Democracy Source: Hegre, Gissinger & Gleditsch (2003)

    11. The radical model Conflict Open economy Inequality

    12. Empirics: trade and interstate conflict • Trade/openness leads to peace • Polachek et al., 1980, 1992,1999; Oneal et al., 1996, 1997, 1999ab, 2003; Gartzke, 2007 • Trade/openness leads to conflict • Mansfield, 1994; Reuveny, 1999ab; Barbieri, 1996, 2002 • Trade/openness leads to peace or conflict • conflict for poor dyads, not for rich (Hegre, 2003) • conflict for autocratic dyads, not for democratic (Gelpi & Grieco, 2003) For surveys of the debate, see Macmillan (1997), Schneider, Barbieri & Gleditsch (2003a,b), Mansfield & Pollins (2003)

    13. The Kantian liberal peace Source: Russett & Oneal (2001: 35)

    14. Substantive effect of the liberal peace Reduction in risk (%) All onsets Fatal MIDs Baseline 0 0 Democracy to 90th percentile -66 -86 Trade/GDP to 90th percentile -22 -32 Increase in IGO to 90th percentile -22 -43 Allies +03 +01 Capability ratio to 90th percentile -30 -71 All three liberal factors to 90th perc. -79 -95 Oneal, Russett & Berbaum (2003: 382)

    15. Is IGO membership a liberal factor? Russett & Oneal (2001): The number of common IGO memberships Boehmer, Gartzke & Nordstrom (2004): Only organizations with security mandates and the most sophisticated institutional structures count Pevehouse & Russett (2006): Densely democratic IGOs promote peace

    16. Limitations of the interstate democratic peace Source: Mousseau, Hegre & Oneal (2003: 298)

    17. Globalization and intrastate conflict Direct effect? (No) Indirect positive effect via development and democracy? Indirect negative effect via inequality? Source: This slide and the next two build mostly on Hegre, Gissinger & Gleditsch (2003). Additional support for the liberal model is found in Barbieri & Reuveny (2005), Bussmann, Schneider & Wiesehomeier (2005), and Bussmann & Schneider (2007)

    18. Indirect effect I: Globalization → economic growth? • Generally: strongest economic growth in the least developed countries • Trade/GDP and FDI/GDP have a positive, but not significant effect on economic growth (other studies find a positive and significant effect) • Reverse causation? FDI to countries with high economic growth • Trade has the greatest positive effect for rich countries, less good for countries with high exports of primary products • Economic openness (low tariffs and quotas, less extensive black market, low state control of the export sector) has a positive and significant effect

    19. Indirect effect II: Globalization → inequality? • High trade is associated with high inequality, but not significantly • Except for the very poorest countries, economic growth is associated with lower inequality • Economic openness leads to lower inequality, particularly for rich countries • Trade impacts poor and rich countries in different ways: • For poor countries trade leads to higher inequality (not significant) • For rich countries it is opposite: high trade reduces inequality (significant)  If trade leads to economic growth, trade can lead to less inequality in the long run

    20. Economic development and civil war • Apart from population size, economic development is the most robust correlate of civil peace (Collier et al., 2003; Fearon & Latitin, 2003; Hegre & Sambanis, 2006) • What explains the relationship: development  peace? • High level of education promotes peaceful conflict resolution • High income and low unemployment reduces the motivation for rebellion • More difficult to recruit rebels • More stable government, more difficult to challenge the leadership militarily • Rich countries more responsive to demands for a redistribution of resources • Rich countries less vulnerable to economic shocks • Rich countries have greater resources for surveillance of the population (bureaucratic infrastructure, but also policing) • Conflict is more costly in rich countries, stronger incentive to keep the peace

    21. Globalization  civil war? • High trade or FDI has no effect on civil war • High (vertical) inequality has no effect on civil war either • but how about horizontal inequality? • For the very poorest countries growth does not matter much for conflict • For other countries, economic growth reduces the risk of civil war • Level of economic development is, apart from population size, the factor that has the highest effect on the risk of civil war (Collier et al., 2003; Fearon & Laitin, 2003)  If trade and openness contribute to higher development in the long run, they will indirectly reduce the risk of conflict

    22. The growth of the liberal factors Source: Lacina, Russett & Gleditsch (2005)

    23. Capitalism  War Capitalism  imperialism  war (Hobson, 1902; Lenin, 1916/1964) ‘[T]he inevitability of war between capitalist countries remains in force.’ (Stalin, 1952) Economic development  increased volume and diversification  lateral pressure  influence abroad to secure raw materials and markets  more war (Choucri & North (1975) For a survey, see Väyrynen (2006)

    24. Capitalism  Peace Weede (2004): • Democracies rarely fight each other • Prosperity promotes democracy • Market economy and free trade promote growth • Bilateral trade reduces the risk of war Prosperity  Democracy ↗ ↘ Trade -------------------------------------------------- Peace

    25. Capitalism  Peace Gartzke (2007): • Changes in the nature of production makes it difficult to manage economies through force • Economic interdependence makes war and destruction counterproductive • Trade interdependence (Russett et al.) may not be the most important factor • Capital and monetary integration measured with eight variables from IMF • Three capitalist mechanisms lead to peace: - Economic development - Similar interests - Globalization of capital • Empirical findings: - Democracy and Trade significantly reduce MIDs - But no longer when Open markets is introduced - Development reduces violence for contiguous states (lower incentive for territorial expansion) - But increases it for non-contiguous states (greater ability to project power)

    26. Gartzke (2007): The capitalist peace

    27. Research conclusions • Mixed results, but more support for the liberal model than for the radical model (particularly for interstate conflict and inequality) • Economic openness reduces inequality, increases economic growth, reduces the danger of interstate conflict, negligible direct effect on internal conflict • Economic development (at least beyond a certain level) reduces inequality, growth, and all forms of conflict, increases regime stability • Unclear relationship between globalization and new forms of conflict (terrorism, political violence) • Open markets may be more important than democracy or trade • But what about reverse causation?

    28. Policy questions • Promoting economic growth is good for development, equality, and democracy – and also for peace (cf. Nobel Peace Prize 2006 to Grameen Bank) • Is the ‘long peace of ASEAN’ a capitalist peace? (Kivimäki, 2001; Goldsmith, 2007) • What can be done for the losers in the globalization process? • Exporting democracy by force may be useless or counterproductive • How can the market economy be exported?

    29. References (1) Angell, Normann, 1938. The Great Illusion – Now. Harmondsworth: Penguin. [First version published 1909.] Babst, Dean V., 1964. 'Elective Governments – A Force For Peace', Wisconsin Sociologist 3(1): 9 –14 Barbieri, Katherine, 1996. ‘Economic Interdependence: A Path to Peace or a Source of Interstate Conflict?’, Journal of Peace Research 33(1): 29–49 Barbieri, Katherine, 2002. The Liberal Illusion: Does Trade Promote Peace? Ann Arbor, MI: University of Michigan Press Barbieri, Katherine & Rafael Reuveny, 2005. ‘Economic Globalization and Civil War’, Journal of Politics 67(4): 1228–1247 Boehmer, Charles; Erik Gartzke & Timothy Nordstrom, 2004. ‘Do Intergovernmental Organizations Promote Peace?’, World Politics 57(1): 1–38 Bussmann, Margit & Gerald Schneider, 2007. ‘When Globalization Discontent Turns Violent: Foreign Economic Liberalization and Internal War’, International Studies Quarterly 51(1): 79–97 Bussmann, Margit; Gerald Schneider & Nina Wiesehomeier, 2005. ‘Foreign Economic Liberalization and Peace: The Case of Sub-saharan Africa’, European Journal of International Relations 11(4): 551–579 Bueno de Mesquita, Bruce & Randolph M. Siverson, 1995: ’War and the Survival of Political Leaders: A Comparative Study of Regime Type and Political Accountability’, American Political Science Review 89(4): 841–855 Chan, Steve, 1997: ’In Search of Democratic Peace: Problems and Promise’, Mershon International Studies Review 41(1): 59–91 Choucri, Nazli & Robert C. North, 1975. Nations in Conflict: National Growth and International Violence. San Francisco, CA: Freeman Collier, Paul; Lani Elliott, Håvard Hegre, Anke Hoeffler, Marta Reynal-Querol & Nicholas Sambanis, 2003. Breaking the Conflict Trap. Civil War and Development Policy. New York: Oxford University Press & Washington, DC: World Bank, http://econ.worldbank.org/prr/CivilWarPRR/ Doyle, Michael W., 1983: ’Kant, Liberal Legacies, and Foreign Affairs’, Philosophy & Public Affairs, part 1: 12(3) 205–235, part 2: 12(4): 323–353 Doyle, Michael W., 1986. ’Liberalism and World Politics’, American Political Science Review 80(4): 1151–1169 Fearon James D. & David D. Laitin, 2003. ‘Ethnicity, Insurgency, and Civil War’, American Political Science Review 97(1): 75–90 Gaddis, John Lewis, 2007. The Cold War. London: Penguin. [Originally published in the US by Penguin Press, 2005] Gartzke, Erik, 2007. ‘The Capitalist Peace’, American Journal of Political Science 51(1): 166–191 Gelpi, Christopher & Joseph Grieco, 2003. ‘Conceptualizing the Liberal Peace’, in Edward D. Mansfield & Brian Pollins, eds, Economic Interdependence and International Conflict. Ann Arbor. MI: University of Michigan Press  Goldsmith, Benjamin E, 2007. ‘A Liberal Peace in Asia?’, Journal of Peace Research 44(1): 5–27

    30. References (2) Hegre, Håvard, 2000. ’Development and the Liberal Peace: What Does It Take to be a Trading State?’, Journal of Peace Research 37(1): 5–30 Hegre, Håvard, 2003. Disentangling Democracy and Development as Determinants of Armed Conflict’, paper presented at the 44th Annual Convention of the International Studies Association, Portland, OR, 25 February–1 March Hegre, Håvard; Ranveig Gissinger & Nils Petter Gleditsch, 2003. ‘Globalization and Internal Conflict’, in Gerald Schneider, Katherine Barbieri & Nils Petter Gleditsch, eds, Globalization and Armed Conflict. Lanham, MD: Rowman & Littlefield (251–276) Hegre, Håvar & Nicholas Sambanis, 2006. ‘Sensitivity Analysis of Empirical Results on Civil War Onset’, Journal of Conflict Resolution 50(4): 508–535 Hobson, John A., 1902/1965. Imperialism: A Study. Ann Arbor, MI: University of Michigan Press Kant, Immanuel, 1795/1991. ‘Perpetual Peace: A Philosophical Sketch’, reprinted in Hans Reiss, ed., Kant’s Political Writings. Cambridge: Cambridge University Press (93–130) Kivimäki, Timo, 2001. ‘The Long Peace of ASEAN’, Journal of Peace Research 38(1): 5–25 Lacina, Bethany; Bruce Russett & Nils Petter Gleditsch, 2005. 'The Declining Risk Of Death In Battle', Paper Presented To The 46th Annual Convention Of The International Studies Association, Honolulu, 2–5 March Lenin, Vladimir, I., 1916/1964. Imperialism – the Highest Stage of Capitalism. Moscow: Foreign Languages Publishing House, 1951, www.marxists.org/archive/lenin/works/1916/imp-hsc/ Levitt, Theodore, 1983. ‘The Globalization of Markets’, Harvard Business Review 61(3): 92–102 Macmillan, Susan M., 1997. ‘Interdependence and Conflict’, Mershon International Studies Review 41(1): 33-58 Mansfield, Edward D. 1994. Power, Trade, and War. Princeton, NJ: Princeton Universitz Press Mansfield, Edward D. & Brian M. Pollins, 2003. Economic Interdependence and International Conflict. Ann Arbor, MI: University of Michigan Press. Marshall, Monty; Keith Jaggers & Ted Robert Gurr, 2004. The Polity IV Project, Political Regime Characteristics and Transitions, 1800–2004, Www.Cidcm.Umd.Edu/Polity/. Mill, John Stuart, 1861/1998. Utilitarianism. Oxford: Oxford University Press Mousseau, Michael, 2002. ‘An Economic Limitation to the Zone of Democratic Peace and Cooperation’, International Interactions 28(2): 137–164 Mousseau, Michael, 2003. ’The Nexus of Market Society, Liberal Preferences, and Democratic Peace: Interdisciplinary Theory and Evidence’, International Studies Quarterly 47(4): 483–510 Mousseau, Michael, Håvard Hegre & John R. Oneal, 2003. 'How the Wealth of Nations Conditions the Liberal Peace', European Journal of International Relations 9(2): 277–314 Oneal, John R; Frances H. Oneal, Zeev Maoz & Bruce Russett, 1996. The Liberal Peace: Interdependence, Democracy, and International Conflict, 1950-85’,Journal of Peace Research 33(1): 11–28

    31. References (3) Oneal, John R. & Bruce Russett, 1997. ‘The Classical Liberals Were Right: Democracy, Interdependence, and Conflict, 1950–85’, International Studies Quarterly 41(2): 267–2 Oneal, John R. & Bruce Russett, 1999a. ‘Assessing the Liberal Peace with Alternative Specifications: Trade Still Reduces Conflict’, Journal of Peace Research 36(4): 423–442 Oneal, John R. & Bruce Russett, 1999. ‘The Kantian Peace: The Pacific Benefits of Democracy, Interdependence, and International Organizations, 1885-1992’, World Politics 52(1): 1–37 Oneal, John R. & Bruce Russett, 2003. ‘Modeling Conflict while Studying Dynamics. A Response to Nathaniel Beck’, in Gerald Schneider, Katherine Barbieri & Nils Petter Gleditsch, eds, Globalization and Armed Conflict. Lanham, MD, Rowman & Littlefield (179–188) Oneal, John R.: Bruce Russett & Michael L. Berbaum, 2003. ‘Causes of Peace: Democracy, Interdependence, and International Organizations, 1885–1992’, International Studies Quarterly 47(3): 371–393 Pevehouse, Jon C. & Bruce Russett, 2006. ‘Democratic International Governmental Organizations Promote Peace’, International Organization 60(4): 969–1000 Polachek, Solomon W., 1980. ‘Conflict and Trade’, Journal of Conflict Resolution 24(1): 55–78 Polachek, Soloon W. & Judith A. McDonald, 1992. ‘Strategic Trade and the Incentive for Cooperation’, in Manus Chatterji & Linda R. Forcey, eds, Disarmament, Economic Conversions, and Management of Peace. New York, Praeger (273–284) Polachek, Solomon W.; John & Yuan-Ching Chang, 1999. ‘Liberalism and Interdependence: Extending the Trade-Conflict Model’, Journal of Peace Research 36(4): 405–422 Reuveny, Rafael, 1999a, ‘The Political Economy of Israeli-Palestinian Interdependence’, Policy Studies Journal 27(4): 643–664 Reuveny, Rafael, 1999b, ‘Israeli-Palestinian Economic Interdependence Reconsidered’, Policy Studies Journal 27(4): 668–671 Rosecrance, Richard, 1986. The Rise of the Trading State. Commerce and Conquest in the Modern World. New York: Basic Books Russett, Bruce & John R. Oneal, 2001. Triangulating Peace. Democracy, Interdependence, and International Organizations. New York. Norton. Schneider, Barbieri & Gleditsch, 2003a,b Stalin, Joseph, 1952. Economic Problems of Socialism in the USSR. Moscow: Foreign Languages Publishing House, excerpted in Robert V. Daniels, ed., A Documentary History of Communism, rev.ed. Hanover, NH: University Press of New England, 1984: 172. (Cited from Gaddis, 2007: 14) Väyrynen, Raimo, 2006. ‘Capitalism, War, and Peace: Virtual or Vicious Cycles’, ch. 10 in Raimo Väyrynen, ed., The Waning of Major War. Theories and Debate. London: Routledge (239–279) Weede, Erich, 2004. ‘The Diffusion of Prosperity and Peace by Globalization’, Independent Review 9(2): 165–186

    32. Next week (17 May):Public holiday Thursday 24 May: Presentations of term paper outlines