Bryan Caplan  

Does Comparative Advantage Stand in the Way of Perpetual Peace?

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Arnold's got a "non-pacifist syllogism" to counter my "pacifist syllogism". I think all of Arnold's premises are wrong or misleading. Point-by-point:

Premise 1: There will always be individuals and groups whose comparative advantage is plunder and extortion. Call them pirates.
For any conceivable activity there is always, by definition, someone with a comparative advantage in it. So far, so good. However, this does not imply that every activity will actually be performed! Someone, somewhere has a comparative advantage in making silent movies, but that does not imply that anyone will pursue this occupation or continue producing silent movies. Similarly, someone, somewhere, has a comparative advantage in hunting bears with his bare hands, but it doesn't mean anyone will actually do so. This point underlies my claim that wealth turns men into cowards: Rich people rarely hunt bears with their bare hands, or risk their lives attacking other people.

Premise 2: Private property ultimately depends on the willingness and ability to use force to defend it. Capitalism that is not backed by the force of arms cannot survive. Peace only prevails where and when the absolute military advantage of the armed capitalists is sufficient to suppress the pirates.
This sounds like solid hard-headed Hobbesianism, but again, it's deeply misleading. In the modern world, how many wars are fought for material gain, anyway? Leaving aside a few Third World countries with valuable natural resources, modern wars don't pay. The history of post-war Germany is a beautiful example of the deep lesson that it is now cheaper to pay for goods than fight for them.

All we need for world peace, then, is for (a) People to recognize that war doesn't pay and/or (b) Get so rich that they're scared to fight even if they falsely believe that it does pay.

And if this seems Utopian, look at the EU. The citizens of dozens of countries that fought like mad for centuries have settled into a peaceful bourgeois existence. (And if you want to bet that peace on the Continent is temporary, I'm open to another bet).

Premise 3: Pirates will always find places, circumstances, and methods with which to challenge armed capitalists.
See the critique of Premises 1&2.

Bottom line: Arnold's argument proves too much. The plain fact is that economic progress and international peace have long been expanding hand-in-hand. All I'm doing is projecting this progress into the future. Arnold almost seems to be denying that this progress is possible.


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COMMENTS (18 to date)
Sharper writes:

A quick google search to test your theories resulted in the following available on the first page of results:

A relatively recently founded silent movie making group ( http://www.silentmovies.com/neosilent/founders.htm) and an Oregon State park that suggests using your bare hands to fight back if attacked by a bear (http://www.oregonlive.com/outdoors/index.ssf/2007/10/new_state_park_records_bear_co.html).

So apparently, even your ridiculous made-up examples like that may actually happen in reality.

The basic problem with the pacifist syllogism you postulate is that it only takes one single exception to overthrow it, that one person who for whatever reason decides that if everyone else is going to be a coward, he'd just as soon be the ruler of them.

Or in more economic terms, for one person to exist for whom wealth isn't a valid satisfaction substitute for power over others and be able to do something about his desires.

These kinds of evil people do actually exist. While it's true that totalitarian systems such as Stalin's Russia encourage them to come out of the woodwork in order to run things much more than a more free and wealthier property-protecting society based on the rewards inherent in the system, to think that they would ALL be eliminated at some level of wealth just isn't realistic when you look at every individual's variations in intrinsic motivations.

Sean writes:

War doesn't pay? Maybe not for the combatants, the civilians, mother nature, or human decency, but it does pay for arms dealers, politicians, and corporations who profit off fueling these wars...

Mark Seecof writes:

Your entire analysis has been anticipated, and, one might argue, disproved. Before the Great War of 1914-18, European philosophers and diplomatists argued that since war between industrial powers was uneconomical and dangerous, it would not eventuate.

I think the problem is that wars can be started by irrational actors (e.g., the present-day US war in Iraq), or by rational actors who are willing to trade their countries' welfare for their own. (In almost every land, a "war leader" may gain great personal power even if he ruins his country.)

Warlike behaviour has a very strong social component which is not nicely calculated by sober and dispassionate economists. Once a leader pushes for war a large portion of the population will fall in behind him, and another portion will stand aside rather than be denounced as traitors.

If you want to end war, don't look at the costs to society. Find a way to bring costs home to politicians who expect personal (and sometimes idiosyncratic or irrational) gain from war.

Erich Schwarz writes:

The entire world-historical period on which you're basing your entire global analysis is, as far as I can tell:

1989-2000.

Before 1989, we had a Cold War where we kept the peace by a pact of mutually assured nuclear destruction with something called the Soviet Union. And before that mutual suicide pact (which we almost carried out in 1963), we had a little bobble called "World War II" -- quite irrational, quite economically inefficient, but a bit vivid anyway. Before then, we had the 1930s, where people were making these same sorts of rational arguments why war was obsolete; appeasement was an effort to politically satisfy such folk. Before before then, we had that "World War I" thingie. And before before before then, as others have noted, we had lots more rational proofs that war was obsolete in those wonderfully advanced Edwardian times. And before^4 then ....... it goes back to Cain killing Abel, figuratively if not literally.

After 2000, we had a spot of unpleasantness with something called "Wahabbi Islam". Maybe you've noticed. Benazir Bhutto had a permanent encounter with that sociological phenomenon a few days ago, and I'm almost sure she noticed.

Even the times of recent "peace" weren't really peace. R.J. Rummell tried to tally up the people killed by their own governments in the 20th century (he called it "democide"). His most recent estimate came out to something like 260 million human beings. Two of the three most effective architects of that mass killing -- Stalin and Mao -- died peacefully in their beds.

You're betting on your own individual wit being giddily cleverer than several thousand blood-soaked years of human history. It's a pleasant fancy. Possibly it's even true -- for what it's worth, I'd be happy if it were. But, for some reason, I'm ever so slightly unpersuaded.

Adam Ruth writes:

Rich people may be afraid to fight, but will never be afraid to hire people to fight for them.

I believe this analysis could be improved by separating states from humans. States are recent organizations, the first appearing about five thousand years ago. States form spontaneously as a consequence of human action but not necessarily of human design. The seminal libertarian text here is The State by Franz Oppenheimer, 1908. You should read and understand this book to get a clear picture of the distinction between states and humans.

States fight for states' reasons. Humans fight for humans' reasons. We need to recognize and talk about the distinction.

Prakhar Goel writes:

Interesting. Arms dealers and the like do not start wars. They catalyze them. Wars are started by conflicts of interest. When group A wants B and group C wants D and it is not possible to have both at the same time. As times go on, these conflicts get worse and eventually, there is some action taken to release these tensions. When, this conflict becomes severe enough, this is war. Personally, a world without war would be a bit disturbing to me. It is an indication that people have no interests. A society such as that is destined for death.

Morgan writes:

What is fascinating here is that the same bad assumptions that underlie this silly little 'syllogism' also underlie their bad economics.

I refer specifically to the fact that they think that people always pursue their economic self interests. This is untrue for several reasons, the first being that there is something in this reality called imperfect information. In addition, while people will in a world with imperfect information pursue thier self interest, this is in many cases not necessarily their economic self interest. People are motivated by other things besides their economic well being. Sit in a courthouse for a few hours and see for yourself.

Secondly, the 'syllogism' assumes the best interests of a corporate body are the best interests of its constituent parts. This is an error that someone who has actually worked in a corporation will know to be totally false, let alone someone who has worked in government.

I think it is interesting not because of the silly syllogism which would seem to be a total waste of time for economic professors, but sadly is almost definitive of the breed, but because of what it illuminates about their other economic theories.

SheetWise writes:

All we need for world peace, then, is for (a) People to recognize that war doesn't pay and/or (b) Get so rich that they're scared to fight even if they falsely believe that it does pay.

The problem is that wealth and "richness" are ordinal and not cardinal. People have tried to iron out that wrinkle, with less than satisfying results.

Binky writes:

SheetWise is correct. How much money will be lost by each 'rational' side in the current writers strike (conflict?) by trying to make a point, or whatever they're trying to achieve?

Stephen W. Stanton writes:

Sorry, Bryan. Arnold wins.

Premise 1: Your criticism is true, but it only requires a minor edit of Arnold's original text. I agree that it doesn't matter that some people have a "competitive advantage" in plunder. It would be better stated as follows:
"Some individuals/groups will always have strong incentives to plunder and the means to do it."

Premise 2: You're anthropomorphizing nations. Who cares that war is not in the interests of most nations? Wars are always in the best interest of certain people. Saddam got filthy rich and powerful through war. One reason that Europe is so peaceful is that the ruling class is able to extract supernormal profits and power through the "legitimate" government. They would risk wealth through war.

Premise 3: Arnold's point stands. Point 1 states that pirates have incentives to plunder. Point 2 states that capitalists must be prepared to protect their booty from pirates. Point 3 states that pirates and capitalists will always be in conflict, no matter how well capitalists prepare to defend themselves. However, the better prepared we are, the less consequential the conflicts.

FWIW - Pirates are largely in power in Europe (and the US increasingly). When the population allows itself to be plundered, there is little reason for external war. But the French riots are just one example of internal conflict a brewin'.

aaron writes:

Some wealthy capitalists just bought yacht to travel the world for a couple years. It'll be staffed. They'll be living a life of luxury. It's too large for many ports, it can only visit the more secure and prestigeous.

But they're still concerned about prirates. There's a .50 cal gun (which will hopefully never be used, or only to fire warning shots) and an ample supply of shotguns stored throughout the boat (that, I believe, everyone on board will be prepared to use).

aaron writes:

I tend to agree more with Arnold.

1. There will tend to be more inequality in the developed world as less resourses will be required to produce necessities (but wealth will be required to allocate them, and the income generated). Physical needs will be more easily met, but there will be less mobility and lots of intellectual capacity that will never be needed/utilized. This will lead to a lot of frustration, both in the upper and lower tiers of society (it will become more and more difficult to do something truly productive and revolutionary: things will get too boring for many).

2. Since productivity grows and needs don't, people will be more and more focused on various game playing for status, rather than on productivity which will procede with efforts of very few.

aaron writes:

This also pre-suposes that growth of wealth and income and the global economy will continue to be stable. It ignores the blackswans that we will happen upon. Could be disease, could be climatic, could be socialogical/political. We live in unusual times... And things seem more stable to us because we off-shore much of our risk (it's the south americans, indians, indonesians, and chinese that are setting up expensive production facilities that are quickly obsoleted by ample supply competition).

8 writes:

In the modern world, how many wars are fought for material gain, anyway?

As a means or an end? Osama Bin Laden seeks to overthrow the Saudi government to fund a global jihad and simultaneously cripple the world economy. Saddam wanted Kuwaiti oil fields. The Soviet Union's expansion had material aims. (Is there any other justification for a materialist philosophy?)

Here's my syllogism:

1. You cannot achieve peace without war. (Peace through strength)
2. You cannot maintain wealth without peace.
Conclusion: Those unwilling to fight will have neither wealth nor peace.

aaron writes:

Greenspan seems to have believed that invading Iraq was worth it just to reduce the threat Saddam posed to oil flows.

aaron writes:

Hehehe. Metallica: "To declare peace is to... prepare for war."

Psychohistorian writes:

Caplan and Kling's propositions are non-contradictory. Kling's makes a prediction as to what will happen, and Caplan makes a prediction as to what would happen given a hypothetical that may never happen. Thus, they could both be correct, if the conditions of Caplan's hypothetical are never met.

That said, both are wrong, at least in part.

Caplan's proposition is valid but not sound. If a culture places enough emphasis on military service as a means to honor or glory, wealthy people could be brave. Also, a system could exist that made going to war more cowardly than not going to war, for example by imposing the death penalty on draft dodgers. I won't waste space expounding this, but it seems possible, if unlikely, and thus makes the syllogism unsound.

Kling needs more philosophy. War is never mentioned in his premises (peace is, but not in a way that would require that it cannot always happen). This necessarily invalidates the argument. Even if we're charitable and allow him to define war implicitly, he would need a literally new definition of war for the argument to hold together. A gang exacting "rent" from local shopkeepers would qualify as war under his definition, as (technically) would a child with a knife being beaten up by a bully for his lunch money. His premises guarantee no more than this. It does not follow from the premises that there will always be some mechanism by which a large group or state can perpetuate violence against another large group or state. Kling's conclusion may well be correct, but his argument is, to say the least, poorly formulated.

There are other problems (it is possible the benefits of "war" are always outweighed by the costs, for example), but this post is long enough.

This may be why so few people argue in syllogisms.

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