James Holmes

Economic Interdependence = Less Conflict?

Could economic logic come to govern international politics, driving out competitive impulses?

James R. Holmes

A question came up last week at the International Studies Association (ISA) conference in San Francisco about how U.S.-China economic interdependence relates to maritime security. Through a bit of serendipity, we covered World War I — which marked the close of an age when arguments about the economics/geopolitics interface were much in vogue — this week in Newport. While we spent some time with this subject in seminar, I didn't answer at the ISA panel, lest I hog up more of the Q&A session than I already did. Let's correct that oversight.

Now, I am a professor. As such I reserve the sacred right to answer a question with a question. My non-response at ISA would have run something like this. There's a spectrum of views on this topic. Few would maintain that interdependence bears no relation to geopolitical competition. For one thing, fighting against a trading partner would clearly drive up the costs of the enterprise. Losing a market or a source of imports is no small thing. But fighting at all would tend to elevate the costs, simply because of the prospect that neutral shipping, aircraft, or land conveyances that transport raw materials and finished goods would be caught in the crossfire. Lloyd's of London and other firms would raise insurance rates for cargoes transiting the conflict zone, much as they have for merchantmen traversing pirate-infested waters off Somalia. In Clausewitzian terms, belligerent leaders would have to place high value on their political goals to justify paying such costs.

Short of that, opinions about the extent to which interdependence deters war vary widely. We can put the faces of David Starr Jordan, Norman Angell, and Thomas Friedman on three schools of thought. Jordan, a long-ago president of Stanford University, made a speech in 1913 that began as follows: "What shall we say of the Great War of Europe, ever threatening, ever impending, and which never comes? We shall say that it will never come. Humanly speaking, it is impossible." He wisely left himself an out, conceding the possibility that "some half-crazed archduke or some harassed minister of state" would set the continent ablaze. But after tallying up outstanding debts from past wars and estimating the costs of a general conflagration, Jordan reaffirmed his strong prediction that high costs rule out warfare. No sane statesman would pay such a price.

Angell stopped short of seconding Jordan's estimate of the pacifying effects of economics. An English intellectual and author of The Great Illusion, he argued that economic logic should — but wouldn't — avert war. He accused most everyone of false consciousness. The mathematics of commerce and warfare discouraged the resort to arms, but pacifists were "at one with the veriest fire-eaters" — Alfred Thayer Mahan, call your office — in their assumption that nations could improve their geopolitical fortunes through military might. Where Jordan prophesied, Angell pled. Statesmen would heed economic logic if only they could see the national interest clearly.

Fast-forward a century, to Friedman. A few years back the New York Times columnist told PBS host Charlie Rose that interdependence raises the costs of geopolitical competition but cannot end it altogether. Sounds like common sense to me. There exist human motives apart from dollars and cents. Honor and fear can be the prime movers behind foreign policy, and they color perceptions of what may look like objective interests. Leaders and societies may prove willing to pay an exorbitant price to preserve or improve their standing in the international pecking order, avenge past slights, or burnish their reputation for martial prowess. Such not-strictly-rational motives can deflect policy from the course a David Starr Jordan or Norman Angell would prescribe as the obvious one.

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Will economic logic come to govern international politics, driving out the competitive impulse? Sure, when men become angels and lambs lie down with lions. Until then, I'll keep company with the fire-eaters who put their trust in a strong navy. But you knew that already.