Dean's World

Defending the liberal tradition in history, science, and philosophy.

The Commercial Peace?

Dan Drezner notes a new paper from by political scientist Erik Gartzke suggesting that free markets are better at reducing war than democracy.

As I noted in Dan's comments, I'm skeptical of the more provocative conclusions. Democracies do not make war on each other. Of course you have to define democracy, but if you simply look at Freedom House ratings, no two nations rated either "free" or "partly free" has ever gone to war with another. As in ever. Claims that the sample size is too small or the number of years too low are simply based on ignorance; the sample size is staggeringly enormous; if you look at every set of neighboring free or partly-free nations that could go to war with each other but have not, you have literally tens of thousands of years of peace between them, and exactly zero of war. For a fast reference, see Professor Rummel's current Democratic Peace Chart. For deeper analysis, I can refer you to any number of more in-depth references.

What is a worry with democracies is what happens when they become unstable and their democratic institutions collapse. Now an interesting fact about that is that no democracy has ever failed once it achieved a per capita income of $6,055 per year. But what the data also shows is that, regardless of form of government, the higher income levels are the more stable a government tends to be, whether it's autocratic or democratic. Dictatorships which can deliver a high average income tend to be more stable too.

So is it possible that a "benevolent dictator" could force a pro-growth free market economy on people and bring them enough wealth that he stays in power? Sure. Mind you, I believe you'll find that democracies deliver free markets and economic growth better in most cases, but theoretically you could have such a regime. So, if you're willing to put up with a dictator who clamps down on free speech, forbids free press, forbids private firearm ownership, tortures its own citizens, commits mass murder against its own citizens, and so on and so forth, just so long as you have a free market and they never actually go to war, well, okay then.

I'll have to sit down and read the paper in more detail, but those are my initial reactions.

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Photon Courier (mail):
Dictatorships are "brittle" in a systems sense. You may have decades of stability and reasonably decent government, but all it takes is one bad guy (or one formerly-acceptable guy turning bad) and you now have a tyranny of the worst kind with no way out other than large scale violence.
9.9.2005 12:10pm
Martin L. Shoemaker (www):
I don't care about his thesis. I honestly don't, whether it's true or not. Because I don't see reducing war as a worthy goal in itself.

Some things are worse than war; and if war is a way to stop them, then war is a good thing. Some of those things include lack of freedom, poverty (real poverty, not relative poverty like we have here in the USA), and the crushing of human rights

Now democracy, on the other hand, is a worthy goal in itself, because it leads to lots of good things... including freedom, prosperity, and human rights.

As you've promoted the democratic peace theory, I've been all for it, because it shows that democracy brings peace, along with all the other good things it brings. But it's the other good things that matter most. Peace in itself is only good if it's a free peace.

I also have strong doubts that free markets can last in a non-democratic society. One key element of free market decision making is knowing that the rules are fixed and knowable, so that you can find a way to work within them to your best advantage. In a tyrrany, the rules are just whims, and can change with the mood of the tyrants. That means decision makers are more cautious and less likely to take risks and invest in things that might lead to growth. You get more hoarding and less investment.
9.9.2005 1:31pm
Scott Harris (mail) (www):
Would Monaco qualify as a benevolent dictatorship???
9.9.2005 1:44pm
Dave Schuler (mail) (www):

no democracy has ever failed once it achieved a per capita income of $6,055 per year

Give us a chance, Dean. There's no limit to what we can achieve if we put our minds to it. ;-)
9.9.2005 2:10pm
Nick Axam (mail) (www):
Germany freely voted for Hitler.... It's like the "MacDonalds peace theory" which worked until NATO bombed Belgrade...
9.9.2005 4:30pm
TallDave (mail) (www):
Democracies are generally the only form of government that allow free markets.

Free markets, free minds, free people... it's a recipe for success.
9.9.2005 4:58pm
Steven Malcolm Anderson (www):
I agree with Martin L. Shoemaker. Peace is not a good in itself, and the pursuit of it can only lead to appeasement, surrender, slavery. There are many things worse than war, many things better than peace, many things worth fighting for, above all, freedom.
9.9.2005 7:13pm
Dean Esmay:
The Germans did not freely vote for Hitler. That's a myth.
9.9.2005 7:17pm
Nick Axam (mail) (www):
How is it a myth exactly Dean? Or is the "myth" of their vote a myth? I'm sure you have the history to back it up, but if so I would be interested to see it: as far as I was aware the '33 elections were as free and fair as any comparable at the time...
9.9.2005 7:51pm
Dean Esmay:
Hitler was not elected to power in the '33 elections. His party did moderately well in those elections, capturing something on the order of 30% of the vote. Through backdoor maneuvering and no small amount of treachery he managed to get himself installed parliamentarily to the seat of government, and then through still more treachery wound up subverting the government, abolishing the old Weimar Republic's constitution, and making himself absolute dictator--none of which was ever once ratified by the voters.

There was nothing democratic in the entire chain of events except the one election where his party--not he, his party--did moderately well but certainly never captured a majority.

If you wanted to draw a comparison, imagine Bill Clinton in 1992, after winning 43% of the vote (which he did) within a few weeks dissolving the House and the Senate and firing most of the Supreme Court, installing his own cronies to replace most of them, and declaring himself Supreme Leader of America. That would be roughly equivalent--although even that would be more "democratic" and "freely chosen" than what happened under Hitler.

Read The Rise and Fall of the Third Reich for more.
9.9.2005 8:05pm
Martin L. Shoemaker (www):
Dean, I'd have to say it's even more of a stretch than that. It would be like Bill Clinton in 1992 winning 43% of the vote, and then James Carville steps up as the real power in the party and within a few weeks dissolves the House and the Senate and fires most of the Supreme Court, installs his own cronies to replace most of them, and declares himself Supreme Leader of America.

Oh, did I just give myself the heebie-jeebies!
9.9.2005 8:38pm
Dishman (mail):
For a free-market dictatorship, there's Singapore. It appears that China is trying to head in that direction as well. It may well be that China is what Gartzke had in mind.

For "things worse than war", my understanding is that through all of history, some 100-150M people have died in war. For comparison, self-described socialists and communists have killed on the order of 150-200M people outside of war. In my book, that makes socialists worse than war.
9.9.2005 9:14pm
Dean Esmay:
Dishman: autocratic governments have in just the last century killed far more people than wars have. Which is one of many reasons why the notion that war is the worst of all possible outcomes is so pernicious.
9.9.2005 9:47pm
Dean Esmay:
Note however that I wouldn't say "socialists" have done all that butchery; it's too big and too catch-all a term. Yes, communists and fascists did a lot of that, as did a lot of monarchs and religious theocracies. The only form of government which has not engaged in mass murder of its own citizens is democracy.
9.9.2005 9:59pm
Nick Axam (mail) (www):
Hi Dean. Well, yes and no. Everything Hitler did was legal and constitutional. There was no armed coup. From 1932 the Nazi party was the largest party in their parliament, the Reichstag, which Hitler used as a lever to secure power. It may not be democracy in the Greek sense, but in the UK it is common for parties without an overall majority to form governments (the Labour party in the 1970s, the Conservatives in the 1990s). Indeed, to state the bleeding obvious, Bush won less votes first time around.

Therefore I believe it is fair to say democracy resulted in Hitler and Hitler resulted in war.
9.10.2005 5:35am
Dishman (mail):
I agree completely with what you said, Dean. My (obscure) point there was that A.N.S.W.E.R. is based on an ideology that is actually among the things that are demonstrably worse than War.
9.10.2005 5:45am
TallDave (mail) (www):
That's a good point Dean, once that's too often forgotten.

Ironically, many Germans believed the Nazis would hold elections again once the war was over.
9.10.2005 4:39pm
TallDave (mail) (www):
There are a few free-market dictatorships, but the vast majority are not.

The CIA seems to disagree that Singapore is a dictatorship.

Government type: parliamentary republic
Suffrage: 21 years of age; universal and compulsory

Economy - overview: Singapore, a highly developed and successful free market economy, enjoys a remarkably open and corruption-free environment, stable prices, and a per capita GDP equal to that of the Big 4 West European countries.
9.10.2005 4:44pm
Steven Malcolm Anderson (www):
As I understand it, the Nazis did hold subsequent elections. But, like the Communists, they, uh, somewhat simplified the ballot.
9.10.2005 4:46pm
Dean Esmay:
CIA World Factbook cannot be relied on for more than very shallow description of government structures. Click here to read the Freedom House report on Singapore. In terms of freedom, they are rated at "partly free," and at the lowest end of that.

They're a republic, and certainly not a very democratic one, and basic civil liberties are severely lacking. For the region, which includes places like China and North Korea, on the other hand, they're above average.

Their average income is high and they aren't warlike. And if you were Chinese or North Korean, it would undoubtedly seem like heaven. But they are lacking certain very basic civil liberties.
9.10.2005 9:09pm
Steven Malcolm Anderson (www):
No, I'm sorry to say Singapore is not free.
9.10.2005 11:45pm
maor (mail):
"Would Monaco qualify as a benevolent dictatorship???"

Monaco actually declared war years ago on its neighbors. It's just that no one has noticed.
:)
9.11.2005 7:14am
Dean Esmay:
9.11.2005 8:29am
Steven Malcolm Anderson (www):
Yes, it is. Good!
9.11.2005 11:39am
Jeff Licquia (mail) (www):
I suppose this is like saying that the cold air, and not the frozen water, kills people who freeze to death. It's a quibble. Cold is what kills hypothermia victims, and freedom is what kills war.

Furthermore, it's a mistake to separate freedom into economic and political varieties.

Freedom of action is a prerequisite for changing a company's strategy or executing a plan, or even for getting to work and back safely. Besides the productivity losses that come from workers jailed for their "subversiveness", you have the fear that comes if the Dear Leader takes a dim view of your company, or invests and takes a loss. Does he measure losses in bullets per share, "paid" to the management team?

Freedom of speech is required for people to have honest assessments, both good and bad. Reviewers, like political dissidents, need the freedom to tell people what sucks and what doesn't, as do financial analysts.

China is trying to walk this tightrope, as is Singapore. I note that Singapore is still partly free; clearly, they err on the side of economic prosperity. China, for its part, appears to be reaping the economic rewards of a slightly more open society; will those rewards stop coming, and will they continue to open up to keep the economy rolling? Time will tell, I suppose, though their current oil shock and failing stock market indicate otherwise.
9.12.2005 12:53am
Dean Esmay:
Therefore I believe it is fair to say democracy resulted in Hitler and Hitler resulted in war.

Only in the broad sense that democracy crumbled and collapsed after Hitler took power.

Comparing Hitler to Clinton or Bush, who both came to power with less than a majority, is still ridiculous; not only did Hitler's party do much less well than either American President did, but neither man threw out the elected legislatures of their nation. Hitler did completely overthrow the Weimar republic and toss its Constitution aside.

Comparisons to other minority governments won't do--those governments had to act in coalition with the other elected members of their national parliaments. They did not simply outlaw the opposition party and jail dissenters--unlike Hitler.

Democracies do sometimes tumble. That's the lesson you can draw from Hitler.
9.12.2005 5:54am