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Free markets key to peace Bandow, fellow at Cato Institute, 05 (Doug Bandow, fellow at Cato Institute, 11/10/05, http://www.cato.org/pub_display.php?pub_id=5193) In a world that seems constantly aflame, one naturally asks: What causes peace? Many people, including U.S. President George W. Bush, hope that spreading democracy will discourage war. But new research suggests that expanding free markets is a far more important factor, leading to what Columbia University's Erik Gartzke calls a "capitalist peace." It's a reason for even the left to support free markets.
The capitalist peace theory isn't new: Montesquieu and Adam Smith believed in it. Many of Britain's classical liberals, such as Richard Cobden, pushed free markets while opposing imperialism. But World War I demonstrated that increased trade was not enough. The prospect of economic ruin did not prevent rampant nationalism, ethnic hatred, and security fears from trumping the power of markets. An even greater conflict followed a generation later. Thankfully, World War II left war essentially unthinkable among leading industrialized - and democratic - states. Support grew for the argument, going back to Immanual Kant, that republics are less warlike than other systems. Today's corollary is that creating democracies out of dictatorships will reduce conflict. This contention animated some support outside as well as inside the United States for the invasion of Iraq. But Gartzke argues that "the 'democratic peace' is a mirage created by the overlap between economic and political freedom." That is, democracies typically have freer economies than do authoritarian states. Thus, while "democracy is desirable for many reasons," he notes in a chapter in the latest volume of Economic Freedom in the World, created by the Fraser Institute, "representative governments are unlikely to contribute directly to international peace." Capitalism is by far the more important factor.

The shift from statist mercantilism to high-tech capitalism has transformed the economics behind war. Markets generate economic opportunities that make war less desirable. Territorial aggrandizement no longer provides the best path to riches. Free-flowing capital markets and other aspects of globalization simultaneously draw nations together and raise the economic price of military conflict. Moreover, sanctions, which interfere with economic prosperity, provides a coercive step short of war to achieve foreign policy ends.
Positive economic trends are not enough to prevent war, but then, neither is democracy. It long has been obvious that democracies are willing to fight, just usually not each other. Contends Gartzke, "liberal political systems, in and of themselves, have no impact on whether states fight." In particular, poorer democracies perform like non-democracies. He explains: "Democracy does not have a measurable impact, while nations with very low levels of economic freedom are 14 times more prone to conflict than those with very high levels." Gartzke considers other variables, including alliance memberships, nuclear deterrence, and regional differences. Although the causes of conflict vary, the relationship between economic liberty and peace remains. His conclusion hasn't gone unchallenged. Author R.J. Rummel, an avid proponent of the democratic peace theory, challenges Gartzke's methodology and worries that it "may well lead intelligent and policy-wise analysts and commentators to draw the wrong conclusions about the importance of democratization." Gartzke responds in detail, noting that he relied on the same data as most democratic peace theorists. If it is true that democratic states don't go to war, then it also is true that "states with advanced free market economies never go to war with each other, either." The point is not that democracy is valueless. Free political systems naturally entail free elections and are more likely to protect other forms of liberty - civil and economic, for instance. However, democracy alone doesn't yield peace. To believe is does is dangerous: There's no panacea for creating a conflictfree world. That doesn't mean that nothing can be done. But promoting open international markets - that is, spreading capitalism - is the best means to encourage peace as well as prosperity. Notes Gartzke: "Warfare among developing nations will remain unaffected by the capitalist peace as long as the economies of many developing countries remain fettered by governmental control." Freeing those economies is critical. It's a particularly important lesson for the anti-capitalist left. For the most part, the enemies of economic liberty also most

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stridently denounce war, often in near-pacifist terms. Yet they oppose the very economic policies most likely to encourage peace. If market critics don't realize the obvious economic and philosophical value of markets - prosperity and freedom - they should appreciate the unintended peace dividend. Trade encourages prosperity and stability; technological

innovation reduces the financial value of conquest; globalization creates economic interdependence, increasing the cost of war. Nothing is certain in life, and people are motivated by far more than economics. But it turns out that peace is good business. And capitalism is good for peace.

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3 Capitalism protects freedom of thought and allows for human growth Tracinski, editor of the Intellectual Activist, 08 (Robert W. Tracinski, editor of the Intellectual Activist, 08, http://www.capitalismcenter.org/philosophy/Essays/The_Moral_Basis_of_Capitalism.htm) What no one has grasped yet is that capitalism is not just practical but also moral. Capitalism is the only system that fully allows and encourages the virtues necessary for human life. It is the only system that safeguards the freedom of the independent mind and recognizes the sanctity of the individual.
Every product that sustains and improves human life is made possible by the thinking of the world's creators and producers. We enjoy an abundance of food because scientists have discovered more efficient methods of agriculture, such as fertilization and crop rotation. We enjoy a lifespan double that of the pre-industrial era thanks to advances in medical technology, from antibiotics to X-rays to biotechnology, discovered by doctors and medical researchers. We enjoy the comfort of air conditioning, the speed of airline transportation, the easy access to information made possible by the World Wide Webbecause scientists and inventors have made the crucial mental connections necessary to create these products. Most people recognize the right of scientists and engineers to be free to ask questions, to pursue new ideas, and to create new innovations. But at the same time, most people ignore the third man who is essential to human progress: the businessman. The businessman is the one who takes the achievements of the scientists and engineers out

of the realm of theory and turns them into reality; he takes their ideas off the chalkboards and out of the laboratories and puts them onto the store shelves. Behind the activities of the businessman there is a process of rational inquiry every bit as important as that of the scientist or inventor. The businessman has to figure out how to find and train workers who will produce a quality product; he has to discover how to cut costs to make the product affordable; he has to determine how best to market and distribute his product so that it reaches its potential buyers; and he has to figure out how to finance his venture in a way that will best feed future growth. All of these issuesand many othersdepend on the mind of the businessman. If he is not left free to think, the venture loses money and its product goes out of existence.
The businessman has to have an unwavering dedication to thinking, not only in solving these problems, but also in dealing with others. He has to use reason to persuade investors, employees, and suppliers that his venture is a profitable one. If he cannot, the investors take their money elsewhere, the best employees leave for better opportunities, and the suppliers will give preference to more credit-worthy customers.

The businessman's dedication to thought, persuasion, and reason is a virtuea virtue that our lives and prosperity depend on. The only way to respect this virtue is to leave the businessman free to act on his own judgment. That is precisely what capitalism does. The essence of capitalism is that it bans the use of physical force and fraud in men's economic relationships. All decisions are to be left to the "free market"that is, to the un-coerced decisions of buyers and sellers, manufacturers and distributors, employers and employees. The first rule of capitalism is that everyone has a right to dispose of his own life and property according to his own judgment.
Government regulation, by contrast, operates by thwarting the businessman's thinking, subordinating his judgment to the decrees of government officials. These officials do not have to consider the long-term resultsonly what is politically expedient. They do not have to back their decisions with their own money or effortthey dispose of the lives and property of others. And most important, they do not have to persuade their victimsthey impose their will, not by reason, but by physical force. The government regulator does not merely show contempt for the minds of his victims; he also shows contempt for their personal goals and values. In a free-market economy, everyone is driven by his own ambitions for wealth and success. That's what "free trade" means: that no one may demand the work, effort, or money of another without offering to trade something of value in return. If both partners to the trade don't expect to gain, they are free to go elsewhere. In Adam Smith's famous formulation, the rule of capitalism is that every trade occurs "by mutual consent and to mutual advantage."

It is common to condemn this approach as selfishyet to say that people are acting selfishly is to say that they take their own lives seriously, that they are exercising their right to pursue their own happiness. By contrast, project what it would mean to exterminate self-interest and force everyone to

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4 work for goals mandated by the state. It would mean, for example, that a young student's goal to have a career as a neurosurgeon must be sacrificed because some bureaucrat decrees that there are "too many" specialists in that field. Such a system is based on the premise that no one owns his own life, that the individual is merely a tool to be exploited for the ends of "society." And since "society" consists of nothing more than a group of individuals, this means that some men are to be sacrificed for the sake of othersthose who claim to be "society's" representatives. For examples, see the history of the Soviet Union. A system that sacrifices the self to "society" is a system of slaveryand a system that sacrifices thinking to coercion is a system of brutality. This is the essence of any anti-capitalist system, whether communist or fascist. And "mixed" systems, such as today's regulatory and welfare state, merely unleash the same evils on a smaller scale. Only capitalism renounces these evils entirely. Only capitalism is fully true to the moral ideal stated in the Declaration of Independence: the individual's right to "life, liberty, and the pursuit of happiness." Only capitalism protects the individual's freedom of thought and his right to his own life. Only when these ideals are once again taken seriously will we be able to recognize capitalism, not as a "necessary evil," but as a moral ideal.

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5 Capitalism key to solving poverty Boudreaux, Chairman, Department of Economics, George Mason University, 08
(Donald J. Boudreaux, Chairman, Department of Economics, George Mason University, 5/27/08, http://blogs.usatoday.com/oped/2008/05/capitalism-has.html) Capitalism has moved billions out of poverty Commentary writer Alan Webber applauds the idea of the so-called social business one that "has a social cause, not just a financial goal." Webber also tells us: "Think of it as capitalism with a human face" ("Giving the poor the business," The Forum, Wednesday). I don't question Webber's uncritical assumption that social businesses will work. I do, however, question his hackneyed suggestion that the face of for-profit capitalism is inhuman.

No other economic system but capitalism has lifted billions of people so decisively out of poverty. Economist Joseph Schumpeter noted this fact in 1942: "Electric lighting is no great boon to anyone who has money enough to buy a sufficient number of candles and to pay servants to attend them. "It is the cheap cloth, the cheap cotton and rayon fabric, boots, motorcars and so on that are the typical achievements of capitalist production, and not as a rule improvements that would mean much to a rich man. "Queen Elizabeth owned silk stockings. The capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within the reach of factory girls in return for steadily decreasing amounts of effort." Capitalism is not a system, but a political principle of freedom Daley, political and philosophical expert, 5/29/09
(Janet Daley, political and philosophical expert, 5/29/09, http://www.telegraph.co.uk/comment/columnists/janetdaley/5071721/G20If-capitalism-is-overthrown-well-lose-our-political-freedom.html) Some of the demonstrators in this week's G20 protest jamboree are demanding the "overthrow" of capitalism. Well, there are lots of things than can be done to " capitalism" it can be undermined, suppressed, sabotaged, even outlawed but it

cannot be "overthrown" because in itself, it has no power. It is the very opposite, in fact, of a tyranny. It is simply the conglomeration of all the transactions made between individual and corporate players in an open market. Some people may gain power through those transactions but that power is transient and contingent on their own financial success: they are not installed in immutable positions from which they can be forcibly removed in a coup d'etat.
The question we are wrestling with now and which the G20 will certainly fail to resolve is how much the bodies which actually do have power should undermine, suppress, sabotage or even outlaw the practice of capitalist exchange.

Those who talk of "overthrowing" capitalism are determined to depict it as a system of government in a precise parallel with socialism, when in reality, capitalism is not a system in the ideological sense.
It is, if anything, an anti-system: the aggregation of human behaviour as it goes about fulfilling particular wants and needs.

It can be described in anthropomorphic terms, such as "ruthless" or "benign" but of itself has no motives and no objectives. (Gordon Brown is more than usually fatuous when he insists that markets need to have
"values": only people have values, methods of exchange do not.) It is in the interests of the Left to talk as if capitalism and socialism were precisely analogous because then they can be seen as competitors and in bad times, the command economy as opposed to the market-based one can win the popularity contest. But this fallacious argument into which, I am sorry to say, a great many well-intentioned people are allowing themselves to be drawn is very dangerous: capitalism isn't really an "ism" which is why the term "free market economics"

is so much more apt.

When we make the case for capitalism, we are defending the political principle of freedom, not arguing for one kind of rigid economic organisation over another. The debate is being hopelessly muddied by those late converts to free enterprise politicians like Mr Brown who believe that markets should only survive if they can be made to serve Left-wing purposes. So the idea that the arguments which will dominate the summit are purely economic is quite wrong: this is about politics. The fundamental disagreement between the United States and Europe amounts to nothing less than the question of whether the great 200 year old experiment in national democracy government of the people, by the people, and for the people

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will survive. The major dispute over the American preference for fiscal stimulus as opposed to the European priority of global regulation is at the heart of this. Europe may as well get this straight now: Barack Obama will not subject the United States to policing by an international regulatory authority, not just because he puts the economic recovery of his own nation above all other concerns (and from the point of view of the rest of the world, this is no bad thing since American recovery is essential to the future of the global economy) but because to do so would be to sign away the democratic accountability of his and all future US governments to a body in which American voters had no say. Unlike in Europe where the historical commitment to democracy has been patchy America has little difficulty with the question, "who needs to be in charge of our future?" The answer is always, "we the people". Democratic self-governance, and the concept of personal freedom that underpins it, comes first and last. Which is why the anger in America about bankers (and the recent furore about AIG bonuses) was more personal than political: the rage was against individuals who had abused the freedom of the market and who needed to be punished as individuals. When the crisis first hit, the overwhelming majority of Americans were vehemently opposed to any bank bail-out. That was why Hank Paulsen's first rescue package was thrown out by Congress: the bankers had screwed up and they were not (hell, no) going to be pulled out of the tank by taxpayer dollars. The US population had to be painstakingly persuaded that if Wall Street went down, Main Street would go with it before they agreed to stump up: they were much more inclined to believe that the banks should be allowed to go under than that the hard-earned money of ordinary people should be given to support them. You take the consequences of your own stupidity: that's the price of freedom. Faced with the damage that such bank failures would have done to the mass of the population, Americans relented, but I suspect that many still believe they could have rebuilt their lives and economy again from scratch through their own industry and resilience. The good news is that even in Britain, for all our overheated arguments about the future of capitalism, there seems little appetite for a command economy to replace it. Because people are as disgusted by politicians who have spent their money unwisely as by bankers who have lent it unwisely, they distrust the state as much as they dislike the banks. But they are not at all sure how this notion of international regulation will affect them. Everybody is telling them that global cooperation (which sounds so nice) is necessary for survival, but nobody is saying what that will actually mean in terms of sacrificing the power they have over their own government even in the attenuated form in which it still exists in the EU. When people are worried about their survival, it is quite easy to persuade them to suspend what seems like the abstract concept of democracy. But once you have given up, as citizens, that power of restraint over your elected government, you can say goodbye to it forever. By all means, we must continue to make the moral case for capitalism, but it seems that we have to make

the case for democracy, too. People must not be bullied into believing that economic security must be bought at the price of their political birthright. The operative word in the phrase "free market economics" is "free".

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7 Collapse of capitalism leads to transition wars Kathari, prof political science, University of Delhi, 82
(Kathari, Professor of political science, University Delhi, 1982, Towards a Just Social Order, p. 571) Attempts at global economic reform could also lead to a world racked by increasing turbulence, a greater sense of insecurity among the major centres of power and hence to a further tightening of the structures of domination and domestic repression producing in their wake an intensification of the old arms race and

militarization of regimes, encouraging regional conflagrations and setting the stage for eventual global holocaust.

Collapse of capitalism will only lead to transition wars that restore capitalism empirically proven SouthernBanking, human rights organization, 95
(SouthernBanking, human rights organization, 11/28/95, http://www.southerndomains.com/SouthernBanks/trans.html)

Where Marxist theory breaks down is in terms of predicting how the two general classes would react and how the politics would work. In fact, during the 1930s, the capitalist class around the world made deals with anti-communists, from the Fascists of Italy and later in Spain to the Nazi Party in Germany. Both America
as well as Great Britain had fascist parties. Our own Charles 'Lucky Lindy' Lindberg was an ardent admirer of the German Luftwaffe. The royal family of Britain played footsy with local fascists, as well as with their German associates across the Channel. And the working class rallied around its own representatives, usually labor union- based political groupings. Again, how this would have finished playing out in America and Britain without the intervention of World War ll, is so much speculation. I have seen no realistic economic analysis which indicates a way out of the depression, apart from what actually occurred. True, some monetarists continue to claim that only a bad monetary policy by the Federal Reserve caused the market crash of 1929 to deteriorate into the Great Depression. Still, I have not seen an analysis of how the Federal Reserve might have righted the economy, once the damage had been done, say by 1931. (1) The war did occur and the capitalist system returned to vibrant levels of production with the war and

once war ceased, the world economy coughed for a couple of years, but production soon returned to pre-depression levels of growth and stayed that high for almost two decades, more than sufficient time for conservative economists and political conservatives to distort the actual history of the 1920s and 1930s. Still, distortions or not, these conservatives could not refute the labor theory of value and as production escalated
beyond all purchasing power of the working and middle classes during the early 1980s, America went on a debt boom. The extra production was consumed during the 1980s, but at an unprecedented level of debt. (2)

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8 Capitalism inevitable, despite crises and riots World Socialist Movement, socialist organization, 09
(World Socialist Movement, socialist organization, 09, http://www.worldsocialism.org/spgb/pdf/wcwnc.pdf) The depression shows itself, every few years, in the accumulation of stocks of goods in the hands of retail stores, wholesalers and manufacturers, farmers and others. While trade is relatively good each concern tries to produce as much as possible in order to make a large profit. It is nobody's business under Capitalism to find out how much of each article is required, so that industries quickly expand to the point at which their total output is far larger than can be sold at a profit. Quite young industries like artificial silk, soon reach the degree of over-development shown by the older industries. Goods such as farm crops, that are ordinarily not produced to order, but with the expectation of finding a buyer eventually, naturally tend to accumulate to a greater extent than those produced only to ordersuch as railway engines.

As traders find it more difficult to sell, they reduce their orders to the wholesalers, who in turn stop buying from the manufacturers. Plans for extending production by constructing new buildings, plant, ships, etc., are cancelled and the workers are laid off.
The reduced income of the workers and of the unemployed reduces still further the demand for goods. In desperate need of ready money to pay their bills, retailers, wholesalers and manufacturers are driven to sell their stocks at lower and lower pricesoften at a price less than the original cost price. Workers, for the same reason, are forced to offer to work for lower wages. It is not that there is any lack of money, but that the rich who have it can find no profitable field for investment. The economies that are made in a time of depressionwhether voluntary ones, or economies enforced on the workers by wage reductions, actually aggravate the crisis instead of relieving it. Yet economise is the advice given by public men now, as it was by Mr. Bourne in 1876, referred to earlier in this pamphlet. Here is a situation that always causes grave discontent. It is from this discontent that the believers in the theory of the collapse of Capitalism think that they can draw the force which will overthrow the capitalist system. But it does not work out like that. In spite of riots and agitations, Capitalism still continues. The actual events show us why this is and why it must be so.

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