Subscribe
European Diary: Ljubljana, April 2024
Ljubljana is one of the nicest cities of Europe, and I always enjoy going there. I last visited the city two years ago, as I have written about. On 23 April 2024 I found myself there once again, at a conference on ‘Global Challenges: Peace, Liberty, and Trade’, organised by the Faculty of Law and Economics at the Catholic Institute and co-sponsored by the Austrian Economics Centre in Vienna. It fell to me to discuss peace. In my talk, I pointed out that there are essentially three ways of obtaining from others what you want: to ask for it, to pay for it, and to grab it. The first way is largely confined to your narrow circle of friends and family. You can ask your mother for a piece of bread, and she will give it to you. But you must pay the baker if you want from him a piece of bread. The second way is how you deal peacefully with strangers, not only the baker in your neighbourhood, but also total strangers. The Japanese do not produce a car for you out of sympathy with you, but because you pay for it. The third way is that of robbery in the case of individuals and of war in the case of countries. It is about conquest, not trade.
Peace Through Free Trade
Free trade is the road to real and lasting peace. If you see a potential customer in a stranger, your propensity to shoot at him diminishes. I cannot resist quoting English poet and journalist Joseph Addison on this. He wrote in the Spectator in 1711:
Nature seems to have taken a particular care to disseminate her blessings among the different regions of the world, with an eye to this mutual intercourse and traffic among mankind, that the natives of the several parts of the globe might have a kind of dependence upon one another, and be united together by their common interest. Almost every degree produces something peculiar to it. The food often grows in one country, and the sauce in another. The fruits of Portugal are corrected by the products of Barbados: the infusion of a China plant sweetened with the pith of an Indian cane. … Trade, without enlarging the British territories, has given us a kind of additional empire: it has multiplied the number of the rich, made our landed estates infinitely more valuable than they were formerly, and added to them an accession of other estates as valuable as the lands themselves.
Note that Addison already then presented the connection between division of labour and free trade, 65 years before Adam Smith published his magnificent work on the Wealth of Nations.
Another eloquent spokesman for peace through free trade was French economist and politician Robert Turgot, Prime Minister of France in 1774–1776:
Thanks to the sacred principle of freedom of trade, all pretended interests of commerce disappear. The pretended interests to control more or fewer territories vanishes thanks to this principle: that territories do not belong to nations but to individuals, that the question to know whether such a canton or such a village shall belong to such a province or to such a state, must not be decided otherwise than by the interests of the people of the said canton or village. Let them meet for their own business in the place which is more convenient for them to go.
Both Addison and Turgot expressed the powerful idea that if goods are not allowed to cross borders, soldiers will. The choice is between trade or conquest, paying or grabbing. In my talk, I recalled Japan in the 1930s. Desperately in need of raw materials, she ran almost everywhere into trade barriers erected in response to the Great Depression, until her leaders decided that what she could not obtain peacefully, she would simply grab. Therefore she first attacked China and then the United States.
The Nordic Model of International Relations
Free trade directs competitive and even aggressive instincts into peaceful channels. In my talk, I also described the Nordic model of international relations. It has five main features: 1) Peaceful secession, as when Norway seceded from Sweden in 1905, Finland from Russia in 1917, and Iceland from Denmark in 1918. 2) Border changes by plebiscites, as when Schleswig, contested by both Denmark and Germany, was in 1920 divided into three voting zones. The northernmost zone votedfor Denmark, and the two others for Germany. Consequently, the border was moved southwards, incorporating the northernmost zone in Denmark. 3) Peaceful arbitration, as when the International Court of Justice in the Hague decided in a conflict between Sweden and Finland about the Swedish-speaking Åland Islands, that they should belong to Finland, and in a conflict between Denmark and Norway about jurisdiction over Eastern Greenland, that the whole of Greenland fell under Danish jurisdiction. 4) Autonomy of national minorities, for example the inhabitants of the Åland Islands and now also the Greenlanders and the Faroese. 5) Cooperation without surrendering sovereignty, as in the Nordic Council, established in 1952. Since then, the Nordic countries have spontaneously extended their cooperation, abolishing the requirement of passports across their borders, giving other Nordic citizens access to the labour market and the social services of any Nordic host country, and coordinating several laws and regulations. I suggested in my talk that perhaps the European Union should seek inspiration from the Nordic Council.
The meeting in which I gave my talk was ably chaired by Professor Mitja Steinbacher, and during a coffee break I had an opportunity to discuss European politics with Lojze Peterle, the first Prime Minister of Slovenia after the fall of communism. Unsurprisingly, I was challenged by several people at the meeting. Is the idea of peace through free trade not a futile dream in a world partly ruled by aggressive Russian mafias, corrupt Chinese communists, and fanatical Iranian mullahs, united in their rejection of Western values? Can the Nordic model, presupposing small, cohesive nations with a common cultural heritage, be applied to the much more diverse countries south of the Danish-German border?
There is admittedly some truth in these two objections. The only message the oriental despots in Moscow, Beijing, and Teheran understand and acknowledge is that of sufficient military might and a demonstrable will to defend our countries and our values. ‘Si vis pacem, para bellum.’ If you want peace, prepare for war. Therefore, the North Atlantic Treaty Organisation, NATO, is indispensable, while the Europeans can no longer expect American taxpayers to pay for the defence of Europe. The cooperation across the North Atlantic must be based on reciprocity, not the total dependence of Europe on the United States. The threat is however clear. Although the GDP of Russia is only a little higher than that of Spain, she has nuclear weapons which she would use in the case of an existential threat. She has to be taken seriously, but she should not be allowed to intimidate us.
While the other objection, that Europe as a whole is much more diverse than the Nordic countries, is certainly true, the real question is which model Europe will adopt in the future: a gradual, spontaneous and peaceful evolution into something like the Nordic region, a Europe of nation states with a common market, or the establishment of a new superpower, the United States of Europe, with the surrender of national sovereignty to an unaccountable and non-transparent Brussels bureaucracy.