Economic Policy and International Security:

Abstract

Although states engaging in free trade may go to war against each other, free trade nevertheless promotes the avoidance of war, although not necessarily directly nor instantaneously. Free trade promotes prosperity and prosperity promotes democracy. Democracies do not fight each other, i.e. they constitute separate zones of peace. Also there is some feedback from zones of peace, whether defined by hegemony or alliances, to free trade. In order to exploit these relationships for the sake of international security and peace, the West should maintain its unity and deepen its commitment to free trade. Unfortunately, special interest groups are both influential in democracies and opposed to free trade. Free trade and rent-seeking are incompatible one with the other. The future world order depends on whether Western democracies succeed in subduing special interests, or on whether special interest groups undermine prosperity in the short run and democracy and peace in the long run.