Pax Capital?

Eric Gartzke claims that capitalism reduces conflict. What do you think is the basis of the statistical regularities reported in his paper “The Capitalist Peace“?

This entry was posted in Free Markets, Political economy of conflict and tagged , , , . Bookmark the permalink.

32 Responses to Pax Capital?

  1. Hagan says:

    I found the paper intriguing especially when discussing the belief in post WWII that democracies reduced wars when looking back at the cold war, and seeing this idea driving most of the policies. I would like to see a comparison of how non-capitalist countries do in a similar study, plus a larger sample size as mentioned in the article. I feel that the theory will hold up as capitalism to me seems to be better at harnessing individual’s natural tendencies to be individualistic. I also strongly agree with the idea that future democracies might not agree or like older democracies. I feel that because there is no set standard of what a democracy has to include specifically that dramatically different democracies will appear that constantly try to improve on the last. This will create that friction between the two, but trade as the article shows will lessen this affect as trade becomes much more intertwined between countries and better.

  2. Wong says:

    The article does bring up rather good points about why Capitalism reduces conflicts with other capitalistic states. Because of the tendency for unlike states to go to war, it makes sense that capitalism matches capitalism. But why? Is it because of open trade among nations? Or is it because conflict doesn’t exist among capitalist states. I believe that its definitely both. Trade helps states to avoid conflict. We already discussed that when we talked about the PPF. When countries trade, ideas, goods, services, and diplomacy are traded between states. This reduces the chances of conflict. Now let us examine the thought about capitalist states not going to war amongst each other. Although today, England is a capitalistic country, it wasn’t always so. They’ve had a monarchy and we’ve clashed with them in two different wars during the time they had a King. The American Revolution and the War of 1812. Now, because of their change of capitalism later in the 1900’s, we’ve not had a conflict with them since. We’ve relied on each other for trade and services. We became dependent on each other, which disallows conflict. However, if you take a look at Communism which does not promote free trade with other capitalistic countries, we’ll tend to go to war, i.e. The Cold War. Therefore, the article does a great job of outlining why capitalism really help develops a country’s economy and infrastructure because of the way it promotes open trade.

    • Rory says:

      I agree that capitalism is clearly a contributing factor to peace between nations, however, I don’t think the Revolutionary War vs. US-UK relations is a strong argument for this case because you argue that it is both trade and capitalism that lead to peace. First off, it was England’s Mercantilism that predated its Capitalism. The monarchy was a government institution and should not be confused with the economic system of Capitalism. This is important because it was this system of Mercantilism that led the English to colonize North America. It should not be forgotten in the analysis of this case that the colonies were English, and they traded heavily with the rest of the British Empire. Following your logic, this would make it unlikely for them to experience conflict.

  3. Lozier says:

    I agree with this article. I feel that the reason why capitalist countries don’t fight other capitalist countries is because they are able to come to an agreement easier. They have the same perspective when it comes to increase their utility, so trade is available for them. For example the United States and Japan, when Japan attacked the United States they were an imperialistic state but not that they are a capitalist state we now trade and compromise with them. So there some evidence out there that shows that Capitalist states do not engage in conflict with on another. An example of an non capitalist vs a capitalist country would be United States and North korea. We have strong tension with them and do not trade with them. So eventually we will have some sort of conflict with them because their views of increasing their utility is not the same as the United States which will lead to problems down the road.

  4. Nick Bracco says:

    I believe Gartzke ‘s claim that capitalism reduces conflict is relatively accurate and is statistically founded. The idea that capitalist countries will not engage in conflict with one another is logical at a basic political sense and economically in that whatever can be gained from conflict is not worth the loss of trade profit that will be lost as a result of conflict and thus political debate is the rational choice. In comparison, capitalist nations are still likely to engage in conflict with non capitalist or democratic nations in which political debate will not result in gains, thus conflict may become the most effective and rational choice for the capitalist country because satisfactory gains cannot be made from political debate.

  5. Siewers says:

    In Eric Gartzke’s piece, The Capitalist Peace, he examines the idea that countries that share similar ideals such as capitalism and democracy should not engage in conflict. In particular, I would like to explore the importance of trade amongst nations, which is easier between capitalist and democratic nations. International trade allows countries to export goods and bring in revenue while importing allows countries to acquire goods from other countries that would otherwise be more costly to individually produce. Altogether, countries that engage in trade will improve their domestic economic conditions. Consumers will be able to afford goods at cheaper prices. Thus, the dollar will have a higher value, allowing the consumer’s income to have higher purchasing power. As Gartzke states, countries that mutually benefit from trading with one another will less likely go to war. Traditionally, the gain from trade experienced by capitalistic countries outweighs the potential gains from going to war. War would lead to an end of trade between the two countries, which ultimately would harm each country’s economy. Additionally, war requires a substantial amount of resources, which would further deplete the economic resources of the countries.

  6. Jacoby says:

    In the article, The Capitalist Peace, by Eric Gartzke he talks about how democracies fit the bill to not go to war because of common perceptions, large potential settlement regions and civil liberties. The statistical evidence shows us that democracies tend not to go to war and the democratic institutions limit the desire for war. I agree in the part that economic development plays a huge factor in maintaining peace and staying away from conflict. For example countries with strong economies will avoid conflict with other countries with strong economies for the fear of the ability for that other country to continue war for a long period. The threat of punishment over reward keeps countries from fighting each other.

    • Kitchen says:

      Cadet Jacoby, I agree with you completely and would like to add to your comment. In the article, Gartzke touches on the fact that countries with strong economies have less incentives to go to war. He mentions that going to war is expensive and it uses up the countries resources as well as destructs property. So why exhaust each others resources when both countries that are going to war are already economically stable? If two countries with strong economies go to war the fighting will last much longer than say countries with poor economies. In the end the war would be won by the country who has a stronger economy. Essentially the longer the fighting continues, the less chance of peace between the countries. So what I am getting at is if a poor countries economy can be improved then the chances of them going to war are less likely.

  7. shehanwf10 says:

    In The Capitalist Peace by Eric Gartzke he talks about how in the post World War II world one thing that has limited conflict with countries or at least developed countries is overlapping foreign policy goals. I think this is a huge factor in why especially in Europe there are less conflicts in the modern world. Not only do they have overlapping foreign policy goals but with the creation of the European Union they also an economic link between them that also helps them resolve conflict more peacefully.

  8. Stansbury says:

    This article helped to supplement the points drawn in class about why democracies limit the desire to go to war. First of all, democratic countries usually have common perceptions. This means that there is a potential for peaceful resolution. Gartzke confirms this by saying that a conflict between two democracies becomes very expensive. Knowing this, the two nations will most likely opt for a negotiation. This is just one example of how democracies mitigate the desire to go to war. However, throughout the paper, Gartzke suggest that it is Capitalistic principles that are actually limiting the amount of conflict. Things such as civil liberties and trade help to lower malevolent interests. Gartzke concludes that Capitalism leads to more development, and a more peaceful world. Although the United States has been through many conflicts throughout ints history, It has been able to stay out of many more because of Capitalism and Democracy.

    • marinp10 says:

      I absolutely agree with what my brother rats are saying. As Stansbury says, democratic countries usually have common perceptions. And naturally like countries will communicate more thus have a better relationship than unlike countries and ultimately inducing trade and promote peace. Shehan touches on the European Union quite which is what comes to my mind when I read The Capitalist Peace. It is interesting when you realize you see who is in the European Union and realize the history of each country and how different it was just years ago. What if something remotely close to the EU existed 65 years ago? Would Germany have invaded Poland, France..etc? The answer is probably not, ceteris paribus when looking at the economy. Yes, all of Europe would have suffered because Germany’s economy was in the tank and the rest of Europe would have to have supported them just as the EU is with Greece now. But again, war would probably have been much less likely. The EU is a great example of how trade/capitalism reduces conflict..

  9. Kitchen says:

    In reply to cadet Jacoby, I completely agree with you and the fact that economic development plays a large part in maintaining peace. I would also like to add to this that Gartzke touched on the fact that countries with strong economies are less likely to go to war. He explains the facts that going to war only leads to the use of resources and destruction of property which really provides no benefits for either country, only more work in the long run. Gartzke also mentions the expenses of war. Since war is so expensive, the country with the largest or strongest economy will be victorious. So therefore if two countries with strong economies go to war, then they will fight longer resulting in more exhaustion of their resources and more destruction to their country. So what I am getting at is should a country with a strong/stable economy have any incentives to go to war?

  10. Osen says:

    The article did a great job in outlining why it seems some democracies dont go to war with each other. At first it was normally thought that because two countries are both democratic that they wont go to war with each other, or Democratic countries would only go to war with countries that are not democratic. This theory is countered by an economic theory. I think that reason is because of capitalism makes it much less advantageous to wage war against other capitalist countries. There are far more economic ties to two capitalist countries so it would drain the local economies to loose that revenue stream with the opposing country. Two economic countries have a better chance of coming out better off through peaceful means than throwing their respective armies and resources at each other. So the more capitalist the world becomes it makes since that the world would see less war between countries.

  11. Kennedy says:

    I would agree with what many others have said here, that based on Gartzke’s paper one can derive the idea that two democratic or capitalist countries will do everything in their power to try and avoid conflict with each other. Since a conflict between two of these types of countries would come at such a great cost to both they will try and negotiate a solution in order to avoid conflict. I would agree that neither country would have anything to gain from coming into conflict. There is a variety of factors that determine hows countries interact with each other, however most capitalistic countries will seek trade with a similar country and will most likely seek to create a policy to reduce their chances of future possible conflict. This can been seen through, as Shehan said, the European Union, or here in America through the North American Free Trade Agreement (NAFTA). These two systems are prime examples how countries will create policies over trade in order to try and reduce any conflict that may arise. If a country has interest in a country for acts such as trade they will be more likely to negotiate problems in order to not ruin their market there.

  12. Busche says:

    I found the section in “The Capitalist Peace” by Erik Gartzke about economic development very interesting because it has provided me with a new way to look at a developing area. Gartzke states, “If development is clustered and neighbors no longer covet territory, capabilities can be devoted to pursuing the nation’s secondary or tertiary interests.” If a country along with its neighbors begins to move forward to its secondary interests this can infer that the countries in that area are developing.

  13. Nick Mari says:

    I absolutely agree with what my brother rats are saying. As Stansbury says, democratic countries usually have common perceptions. And naturally like countries will communicate more thus have a better relationship than unlike countries and ultimately inducing trade and promote peace. Shehan touches on the European Union quite which is what comes to my mind when I read The Capitalist Peace. It is interesting when you realize you see who is in the European Union and realize the history of each country and how different it was just years ago. What if something remotely close to the EU existed 65 years ago? Would Germany have invaded Poland, France..etc? The answer is probably not, ceteris paribus when looking at the economy. Yes, all of Europe would have suffered because Germany’s economy was in the tank and the rest of Europe would have to have supported them just as the EU is with Greece now. But again, war would probably have been much less likely. The EU is a great example of how trade/capitalism reduces conflict.

  14. Cory Reinecke says:

    I think that Gartzkes thoughts on how capitalism and similar perceptions in democratic nations can diminish conflict, are very accurate when we look at the amount of wars that democratic nations have participated in. We see that democratic nations have substantially less domestic and foreign conflict unlike many other countries that do not govern themselves in the same manner. We see a link in underdeveloped countries who often have inner and outer conflicts with each other due to the lack of trade and common perceptions. Gartzke makes a historic connection in regards to his thoughts by explaining how conflicts like the cold war and our current conflict with North Korea have developed. We see that both of these conflicts arose out of the lack of trade and the differences in our styles of trade, we are capitalist while the opposing forces were communist. This difference in perceptions caused tension between us and consequently resulted in war. I believe that we will see a continuation of non conflict between those whom we trade with due to the fact that trade also can lead to things like trust which helps to prevent conflict

  15. Bull says:

    I found the article to be very intriguing and especially applicable to today’s society. In terms of the basis of the statistics in this article, you can very easily apply it to today with current conflicts and wars that have gone on. While we are a free state and a huge democracy, we find ourselves in a lot of conflict as the super power of the world, but when you look at who we are in conflict with, it is never another democracy as stated in the article that “Mature democracies do no go to war with states that are democratic.” Our conflicts are usually uprooting a dictator regime, or in terms of the Cold War a communist party. He also talks about with democracies in the time of election, presidents and party leaders are going to side with the people’s wants which is most of the time no war.

  16. Gant says:

    Gartzke’s argument against the Democratic Peace Theorem is a brilliant way of challenging one of the most highly regarded theories in International Relations Theory. He does so through a quantitative analysis of the general paradigm behind the Democratic Peace Theorem, and that is Liberalism. Liberalism says that for peace to occur countries need to trade with one another, belong to similar international organizations as one another, and trade with one another. Without these three pieces of the “Kantian Triangle” war can occur. As Gartzke shows, trade is perhaps the most important feature to the Democratic Peace Theorem. I agree with this, and I also believe that trade between non-democratic and democratic regimes produces peace, because why go to war with the person who produces your goods and buys your products? The US has not gone to war with its trade partners who are not democracies and this is an important feature that the Democratic Peace Theorem does not address. The UN General Assembly Affinity dataset that he mentions is also a good measure of conflict likelihood, but if you are to look at the data for Iran and Iraq during their war in the 1980s they had a nearly perfect vote record, so it is obviously not as important a factor as trade is. Overall, he made a substantial contribution to the Liberal Tradition through his analysis of these factors, and he showed how trade is the most important factor to avoiding war.

  17. Staib says:

    Eric Gartzke’s The Capitalist Peace discusses many of the points we have discussed in class that directly affect the outcome of conflicts. He points at that democratic nations are typically less inclined to go to war with one another. He also talks about the direct correlation of capitalism and low conflict nations. This is due in part to the open trade that capitalism typically is associated with. These two factors combine to create peaceful situations between multiple countries. Throughout history, countries that have been democratic and/or capitalistic have been involved significantly less conflict.

  18. Rian Ellis says:

    I strongly agree with what Wong said about the article regarding how Capitalism reduces conflicts with other capitalistic states. Wong mentions some other good points that I would like to expand on. For example, Communism group tend to go to war more likely them a Capitalism group. I believe this is because of the culture of the individual of each group (Communism and Capitalism). Since they grew up in different cultures they tend to have certain beliefs that don’t match up. This will result in conflict, even though trading (peace) would be better for each group.

  19. I believe that Erik Gartzke articulately summed up his argument in one of his closing statements saying “What is the ‘larger’ relationship between development, capitalism, and democracy? It might be that democracy actually lies behind the apparent impact of capitalism on peace” (Gartzke, 182). Essentially, while democracy appears to be the entity responsible for peace in the modern world, it is actually the combined effects of free markets and the capitalist system that lead to lasting peace.
    One of the more interesting parts of the paper was the paradox associated with 3rd world countries experiencing economic development. Economic development may allow these nations to deter foreign powers from conducting abusive resource extractions, allowing a longer threshold on the concept of security though time, resulting in more investment and capitalistic behavior. However, this economic development also gives the governments of these nations the ability to project power both regionally and globally in congruence with their national interests. Considering the atrocities of these nations’ pasts, they may be very likely to be aggressive in dealing with foreign countries.
    Although Aristotle and Plato lived long before Adam Smith, I believe that the social institutions attributed to free market play a strong role in developing the formal institutions of the legal entities involved in democracies. Therefore, practice of capitalist economic policies is virtually a necessity in order to properly develop a peaceful, economically prosperous, democratic nation.

  20. Daniel Miller says:

    This paper gave excellent insight into the causation of war in the past and present. The idea of fellow democracies going to war with each other seems ridiculous to most people, however, the reasoning why democratic countries don’t go with each other was still murky. Gartzke highlights that as we develop, out incentives to conquer based on resource needs diminish as we still remain profitable through other means. Developed countries have more incentive to trade than to invade and steal as it is more profitable to maintain good relationships with those around you in the long run. However, as we develop we are able to project our power as we have gain superior technology and thus we have the power to engage in conflicts farther away. This takes us back to the ideology that democracies wont go to war with each other, but will go to war with countries with different political environments. If there are large policy differences then countries are more likely to go to war and with democracies being able to project their power, are more likely to go to war with countries farther away than they would have in the past.

  21. Scott Pease says:

    Liberal peace has been debated amongst scholars for decades. Most research has dedicated itself to understanding liberal peace through the lens of political science, and has attributed this peace to democracy being the catalyst. In Erik Gartke’s article, The Capitalist Peace, he carefully analyzes and dissects the democratic peace theory that has become widely accepted by many scholars. Further, he posits his thesis that peace is actually derived from capitalist traditions, which happen to be closely tied to democracy although not limited to democratic societies. He gives his analysis of political liberalism and how this view of conflict has lead researchers to gravitate towards the notion that democratic states will not go to war. However, Gartke’s analysis of economic liberalism sings a different tune. He acknowledges that democracies do have peace between them, but research thus far has failed to control for capitalism within their data set. Gartke then posits four hypotheses about liberal peace, which after statistical analysis leads him to the conclusion that the opportunities and perceptions associated with capitalism lead to liberal peace. This conclusion allows us to understand that through capitalism and development politics are freer which leads to liberal peace. The globalization that is caused by free trade and capitalism draws nations closer to one another. This interdependence between nations is likely to inflict damages upon the nation starting conflict thus making them less likely to initiate conflict. This means nations will act in a manner that is best for themselves which has a positive externality because their fear of pursuing conflict makes them less likely to engage in it thus other nations prosper from this peace.

  22. KIER says:

    Pax Capital helped explain the notion that democracies are less likely to go to war because they have common perceptions which helps lead to trade and more profitability. One of the things I would’ve like know more about was more data or analysis of how the interactions of international organizations such as the International Monetary Fund, United Nations or World Trade Organizations. I think a large part of the declining violence in the world stems from organizations such as those.

  23. Michael Custer says:

    This article clearly illustrates that capitalism reduces conflict. This is because capitalist countries are patient, and should have low interest rates. Delta, is found from the interest rate. High interest rates, are typically found in countries that don’t have some sort of democratic government structure. Capitalist nations trade with each other, increasing the settlement area, giving a higher chance of peace. The discounted rate of conflict generally results in a lower net present value for capitalist countries, meaning that it actually is in their best interest not to go to war.

  24. cockebt10 says:

    In “The Capitalist Pease” by Erik Gartzke, I agree with the statement made that capitalism does in fact decrease conflict. I feel that evidence presented in the article clearly supports this statement. Capitalistic countries tend to be those that are the most developed and it was found in the results that the development variables tend to have a substantive impact on dispute propensity. The greater the level of development the greater the reduction of disputes that occur generally within that nation. I feel that the evidence given to support the statement that free markets and prosperity have a great potential to discourage war than that of a democratic peace.

  25. nowakowski says:

    This article further reinforced the model we went over last week. Since most democracies have an open dialog with one another and the fact that most democracies are also capitalist economies they tend to trade an ample amount with one another. This allows their perceptions of the outcome of a potential conflict to be more inline with one another, lowering the possibilities of conflict. Gartzke is an advocate of the saying “If goods do not cross boarders than armies will.”

  26. Dutter says:

    Earlier in class we learned that trade is a key factor in developing civilizations. And this is enhanced when it is “free trade” ie when it is in a capitalist society and not restrained by controlling governments. Using this basis we can apply the points that Gartzke makes in his paper. His point being that democratic countries work together in order to allow capitalism and common interstate interests and in doing so limits conflict between nations. This abundance in resources through free trade allows each country to divert attentions away from using conflict to ensure food is on the table (like the Vikings) and instead invest in things associated with prosperity.

  27. Grant says:

    “The Capitalist Peace” article by Eric Gartzke was an interesting article. The author suggests that countries with strong democracies and capitalist structures are less likely to go to war with one another and he offer several examples to strengthen his argument. He says that the idea of countries which have economic freedom generally have interstate peace can be traced back as far as the enlightenment. The article states that there are two stages of interaction between two countries at war. The both must be willing and able to compete and they must not be able or willing to solve disputes diplomatically. The thing that I found most interesting about this article is that, according to Gartzke, two countries with capitalist structures will be more likely to “buy” the other out of going to war or that the war would be too costly for both of the countries which will cause them to refrain from war altogether. This article offered some interesting perspectives that I had not previously thought about.

  28. marinp10 says:

    The patience-conflict model is interesting. I can see how the model can be applicable to evolving states, such as BRICK countries, but how about world super powers, such as the U.S, Russia, Germany, England..etc? It seems that the models base themselves around evolving countries, which means they are already unstable, thus can be said to have lower patience and at risk for more conflict (civil war) etc. My question is, where is impatience born from? Yes, the USSR collapsed, thus a super power was in a form of unrest, but that was not due to impatience, was it? How can we apply the model to superpowers? Is it possible for superpowers to be affected by impatience? I don’t know. Any ideas?

  29. N. Warack says:

    I have several issues with this article. Theoretically, having similar economic institutions that promote free markets does seem to deter conflict, my issue is not in that theory so much, but the research design. Gartzke seems to have empirical evidence to support his hypothesis, but the formulas, data, functions, variables, etc. seem to have room for error. It already is an issue that math is being “created” ,so to speak, but its another to pull specific examples from strictly Oneal and Russett’s findings and using variables to support Gartzke’s hypothesis. However, Gartzke claims using a standard democratic peace model ensures this issue is not a problem. I am not completely sure what that means, and I’ll admit I am a little naïve to what models and empirical approaches should be used or what I feel SHOULDN’T be used, but it seems to me there is a lot of room for error. I think, instead, making a more legitimate argument for a capitalist peace should be measured more by growth, changes, and effects. Maybe this somewhat does with the whole GDPPC aspect. I am not sure, like I said I am naïve to some of this and I am only trying to pose questions that I have.

    As I stated earlier, I do feel this theory of a capitalistic peace and free trade across nations is a deterrent for conflict. It seems this only holds true if the result of winning a conflict is less then trading. So developing and/or poor nations would seem to be stuck in a conflicting rut if the benefits of trade are never realized or if they are as beneficial as trading. (typically nations defined as poor or developing, fight for basic resources, land, and primal needs) If they are realized, then the obstacle of time and patience and ultimately communication must be achieved as well to reach such results.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s