The Diffusion of Prosperity

and Peace by Globalization

Article review by
Velicioiu Miruna Iulia
Group 973

As we know capitalism and freedom promote peace. The process of market expansion and
integration as the universalization of capitalism is best known as globalization.
The progress of globalization who has begun in the late nineteenth century was interrupted between
the 2 World war an the great depression for about a half of century but regained his normal path. Before
this all the trade and foreign investments were fairly globalized and because of low political obstacles to
international migration we can say that the labor markets were more globalized at the beginning of the
century than at its end.
Technological innovation is the main determinant of globalization, helping with inexpensive and fast
communication and transportation . Also, another important determinant of globalization is the political
decisions in rich and poor countries with tariffs and non tariffs reductions regarding the trade. If the trade
between countries is truly free, then it promises to enrich all nations. But free trade is vulnerable because
tracking free trade becomes politically attractive if foreigner as perceived as a cause of the need to adjust.
Globalization provides reason for hope regarding the expansion of economic freedom and secure
property rights because it ties politicians hands and prevents them from pursuing politically attractive but
self-defeating policies.
Competition in politics does not guarantee a movement toward greater efficiency or economic
freedom.
The security benefits of globalization are that democracies rarely fight each other, prosperity or high
income per capital promotes democracy and export in poor countries , open markets in rich countries
promote growth and prosperity in poor countries, bilateral trade reduces the risk of war between dyads of
nations.
Why trade contributes to the prevention of war?
War is likely to disrupt trade . The higher the level of trade in a pair of nation is the greater the cost of
trade disruption are likely to be. Secondly, commerce might contribute to the establishment or
maintenance of moral capital.
Trade seems to play a pivotal role in the prevention of war because it exerts direct and indirect
pacifying effects. Besides that the indirect effect of free trade as the consequent growth, prosperity and
democracy reduce the risk of militarized disputes and war. Economic freedom and globalization would
still retain their crucial role in overcoming mass poverty and in establishing the prerequisites of the
democratic peace even if the direct peace but trade effect were discredited .

Acording to Lee Kuan Yew the most enduring lesson of history is that ambitious growing countries
can expand either by grabbing territory, people resource, or trading with other countries. The alternative
to free trade s not just poverty is war.
We can say that capitalist-peace theory summarizes some known pacifying effects, but it does not
summarize conflict promoting variables and their effects .The researchers found that power balance
matter too and they use as an example WW1.
Peace by trade is at least as important as peace by democracy. Trade (because of its contribution to
prosperity) underwrites democracy and thereby the democratic peace where it prevails. Moreover, it does
not suffer from a geopolitical complication that affects peace by democratization because the risk of war
between democracies is much lower comparing with the risk of war between a democracy and an
autocracy.
An important idea is that democracy can cause peace only among democracies and then
democratization does not contribute everywhere to peace.
Acording to Mousseau, Hegre and Oneal peace by trade in contrast to peace by democratization
applies regardless of the level of economic development of nations.
Rummel stated that autocracy as the result of rebellion , civil war and revolution killed even more
people than interstate war rebellion or revolution in the twentieth century. the preservation of democracy
where it already exists and the establishment of democracy elsewhere must be part of the solution to the
problems of rebellion, political violence, and war.
According to Lipset the viability of democratic regimes and the likelihood of transitions to
democracy depend on the level of economic growth. The more prosperous the country is , the likely it is
to become and to remain a democracy. This help can be provided in different ways .Firstly, prosperous
countries influence foundations for capitalism or economic policies elsewhere, prosperous and democratic
countries may provide open markets for exports from poor countries, rich and democratic countries may
provide FDI to poor countries and finally rich and democratic countries may provide economic aid.
The beneficial outside influences are that the mere existence of prosperous and developed countries
generates advantages of backwardness and opportunities for faster growth of less-developed countries as
they can borrow technology from more developed countries and grow faster.
According to Giersch the capitalist-peace strategy rests on a policy of de politicization. Under
capitalism, material well-being depends less on political affiliations and more on market success. The

capitalist peace depends on a universalistic ethic and its acceptance. Free trade and the principle of
nondiscrimination between peoples or races and between domestic and foreign producers guide
consumers to buy from the best and cheapest producers.
As a conclusion we can say that globalization promises to enlarge the market and therefore to increase
the division of labor and to speed productivity gains and economic growth.