Trade as Peace – An interplay of Geography, History and Politics 

Part I - A Conceptual Framework 

The interplay of geography, history and politics has been central in determining the nature and scope of relations between cultures. Historically, trade was the confluence in this dialectical relationship of geography, history and politics, as well as in the interplay between war and peace.

Many scholars have written about this inescapable relationship between trade, war and peace. Lucia Coppolaro and Francine McKenzie in their essay, “Does Trade Promote Peace? A Historical and Global Perspective Global History of Trade and Conflict,” refer to how trade and conflict were commonly connected. Jan Pieterszoon Coen, the Dutch East India Company’s Governor-General in the Indies, observed that trade and war were inseparably linked. He is quoted to have said that, “we cannot make war without trade nor trade without war.”

Notwithstanding this point of view, Amir M. Kamel in The Trade-Peace Theory argues that an increase in trade leads to universal benefits, which expand to include peace. This notion, he says, was first mentioned at around AD 100, when Plutarch wrote about how sea trade allowed humans to cooperate and “redress defects” in their relationship with one another through mutual exchange. Imagine, this was noted around two thousand years ago.

In 1748, Charles de Montesquieu incisively made a fundamental conclusion that trade was an instrument of peace and gave rise to the idea that, “Peace is the natural effect of trade.” He goes on to add that “two nations who traffic with each other become reciprocally dependent,” and their “union is founded on their mutual necessities.” Thereafter, it was Adam Smith who popularized the connection of trade and peace. It was in his The Wealth of Nations that the idea of trade promoted concepts of interdependence, which in turn enhanced the understanding around the economic benefits of peace and the economic costs of war. 

In today’s interdependent world, the interrelationship between trade, conflict and peace is more acute and critical to human co-existence. The vision of a shared humanity in which all sections of human society benefits in equal measure assumes building on common ground. In his collection of essays in Small is Beautiful, E. F. Schumacher hones the view that it is not economics that is at stake, but culture, not the standard of living, but the quality of life. This translates to the economics of peace.

Schumacher’s emphasis on culture and quality of life is directly impacted when the boundary itself is at the center of political differences. Diana Klein in Funding war or facilitating peace? Cross-border trade and natural resources points out there are no shortage of examples of disputes about boundaries with significant cross-border economic dynamics. In these types of situations, maintaining the border usually becomes a political goal of the State, also the concept of trade assumes a more sensitive and complex demeanor, providing opportunities for both conflict and peace. 

When trade is limited within the existing paradigm as defined by the State, its dynamism is lost as it is regulated by rigid boundaries and legal norms where people are reduced to consumers and statistics. Consequently, trade needs to be located within a decolonized framework. This clearly suggests the need to understand and define trade primarily as one of inter-cultural and cross-cultural relations. 

The processes of trade and development do not begin with goods, rather, as Schumacher reminds us, it “starts with people and their education, organization, and discipline. Without these three, all resources remain latent, untapped potential.” In this context, trade becomes an instrument that offers opportunities to revitalize a region, re-establish relationships and build new links. Subsequently, people go from the status of being dependent subjects to being makers of their own destiny. In this way, boundaries take on new meaning as they are no longer lines drawn on a map to separate and divide, but become fluid and soft, where tensions are creatively transformed as shared and respectful spaces.    

Inevitably, to constructively create conditions in which trade can flourish, the current context of unresolved political issues, violence, militarization and misgovernance needs to be addressed. We need to find effective and relevant ways to uproot the state of poverty, structural violence, institutionalized and all forms of corruption and asymmetrical power structures.  

Thus, inherent to the dynamics of trade is its interrelation with war and peace. Ultimately, trade as a confluence, a meeting point, makes it possible to develop an organic humanizing framework from the ground up that is centered upon engaging with a people’s geography, history and politics. The framework of growth, Schumacher emphasizes needs to reflect “social cohesion, cooperation, mutual respect, and above all, self-respect, courage in the face of adversity, and the ability to bear hardship.”