Gartzke 7 (Eric, associate professor of political science and a member of the Saltzman Institute of War and Peace Studies at Columbia University, “The Capitalist Peace”, American Journal of Political Science, Vol. 51, No. 1, January 2007, Pp. 166–191)
If war is a product of incompatible interests and failed or abortive bargaining, peace ensues when states lack differences worthy of costly conflict, or when circumstances favor successful diplomacy. Realists and others argue that state interests are inherently incompatible, but this need be so only if state interests are narrowly defined or when conquest promises tangible benefits. Peace can result from at least three attributes of mature capitalist economies. First, the historic impetus to territorial expansion is tempered by the rising importance of intellectual and financial capital,factors that are more expediently enticed than conquered. Land does little to increase the worth of the advanced economies while resource competition is more cheaply pursued through marketsthan by means of military occupation. At the same time, development actually increases the ability of statesto project power when incompatible policy objectives exist. Development affects who states fight (and what they fight over) more than the overall frequency of warfare. Second, substantial overlap in the foreign policy goals of developed nations in the post–World War II period further limits the scope and scale of conflict. Lacking territorial tensions, consensus about how to order the international system has allowed liberal states to cooperate and to accommodate minor differences. Whether this affinity among liberal states will persist in the next century is a question open to debate. Finally, the rise of global capital marketscreates a new mechanism for competition and communication for states that might otherwise be forced to fight. Separately, these processes influence patterns of warfare in the modern world. Together, they explain the absence of war among states in the developed world and account for the dyadic observation of the democratic peace.
Data proves cap stops war
Hegre et al 2009 (H’vard Hegre, Professor of Political Science @University of Oslo, , John R. Oneal, Professor of Political Science @ The University of Alabama, Bruce Russett, Professor of Political Science @ Yale University) August 25, 2009 “Trade Does Promote Peace: New Simultaneous Estimates of the Reciprocal Effects of Trade and Conflict” http://www.yale-university.com/leitner/resources/docs/HORJune09.pdf
Liberals expect economically important trade to reduce conflict because interstate violence adversely affects commerce, prospectively or contemporaneously. Keshk, Reuveny, & Pollins (2004) and Kim & Rousseau (2005) report on the basis ofsimultaneous analyses of these reciprocal relations that conflict impedes trade but trade does not deter conflict. Using refined measures of geographic proximity and size—the key elements in the gravity model of international interactions—reestablishes support for the liberal peace, however. Without careful specification, trade becomes a proxy for these fundamental exogenous factors, which are also important influences on dyadic conflict. KPR‘s and KR‘s results are spurious. Large, proximate states fight more and trade more. Our re-analyses show that, as liberals would expect, commerce reduces the risk of interstate conflict when proximity and size are properly modeled in both the conflict and trade equations. We provided new simultaneous estimates of liberal theory using Oneal & Russett‘s (2005) data and conflict equation and a trade model derived from Long (2008). These tests confirm the pacific benefit of trade. Trade reduces the likelihood of a fatal militarized dispute, 1950–2000 in our most comprehensive analysis, as it does in the years 1984-97 when additional measures of traders‘ expectations of domestic and interstate conflict are incorporated (Long, 2008) and in the period 1885-2000. This strong support for liberal theory is consistent with Kim‘s (1998) early simultaneous estimates, Oneal, Russett & Berbaum‘s (2003) Granger-style causality tests, and recent research by Robst, Polachek & Chang (2007). Reuveny & Kang (1998) and Reuveny (2001) report mixed results. It is particularly encouraging that, when simultaneously estimated, the coefficient of trade in the conflict equation is larger in absolute value than the corresponding value in a simple probit analysis. Thus, thedozens of published articles that have addressed the endogeneity of trade by controlling for the years of peace—as virtually all have done since 1999—have not overstated the benefit of interdependence. Admittedly, our instrumental variables are not optimal. In some cases, for example, in violation of the identification rule, the creation or end of a PTA may be a casus belli. More importantly, neither of our instruments explains a large amount of variance. Thus, future research should be directed to identifying better instruments. Our confidence in the commercial peace does not depend entirely on the empirical evidence, however; it also rests on the logic of liberal theory. Our new simultaneous estimates—as well as our re-analyses of KPR and KR—indicate that fatal disputes reduce trade. Even with extensive controls for on-going domestic conflict, militarized disputes with third parties, and expert estimates of the risks of such violence, interstate conflict has an adverse contemporaneous effect on bilateral trade. This is hardly surprising (Anderton & Carter, 2001; Reuveny, 2001; Li & Sacko, 2002; Oneal, Russett & Berbaum, 2003; Glick & Taylor, 2005; Kastner, 2007; Long, 2008; Findlay & O‘Rourke, 2007; cf. Barbieri & Levy, 1999; Blomberg & Hess, 2006; and Ward & Hoff, 2007). If conflict did not impede trade, economic agents would be indifferent to risk and the maximization of profit. Because conflict is costly, trade should reduce interstate violence. Otherwise, national leaders would be insensitive to economic loss and the preferences of powerful domestic actors. Whether paid prospectively or contemporaneously, the economic cost of conflict should reduce the likelihood of military conflict, ceteris paribus, if national leaders are rational.