CSCMP's Supply Chain Quarterly
October 19, 2018

Supply chains and peace

Can trade really be a force for peace and stability? It is a tempting proposition for supply chain professionals to embrace.

One of the ideas that Thomas Friedman promoted in his book The World Is Flat was that globalization could act as a force for peace. Nations that rely on one another for goods and services, he suggested, are less likely to engage in hostilities than those without such connections.

It is not a new idea. Baron de Montesquieu, the great 18th century French philosopher, once wrote, "The natural effect of commerce is to bring peace. Two nations that negotiate between themselves become reciprocally dependent, if one has an interest in buying and the other in selling. And all unions are based on mutual needs." (I owe this and other references to Montesquieu to a 2006 article in the Brooklyn Journal of International Law by Robert Howse, a professor at the University of Michigan Law School.)

Can trade really be a force for peace? It is a tempting proposition to embrace. Supply chain professionals in particular would like to think that their part in international business could in some small way contribute to peace and stability.

Montesquieu recognized that it is difficult to conduct commerce where hostility exists, even if hostilities have not reached the point of war. Yet, as Howse points out, there are times when warfare has enabled commerce, not during the havoc it unleashes, but often afterward by, for instance, opening trade routes. The hope is that over time the desire to trade for mutual benefit will overcome hostility.

Howse defines in some detail exactly what Montesquieu meant“—that he was referring to the sort of "economic commerce" that served the mutual needs of trading partners, rather than the "commerce of luxury" in which the powerful exploit the weak.

In that context, it does seem that trade can be a force for peace if pursued with an open mind and the willingness to understand a would-be trading partner's goals. Trade almost by definition requires some level of mutual understanding, if not respect. "Commerce represents the idea of human society based not upon rule or domination but [upon] mutual neediness," Howse writes.

If trade is to help humans satisfy those needs, then states, which control and regulate international commerce, must make good-will efforts to set rules and enable practices that permit commerce to flourish. As round after round of trade talks have demonstrated, that is enormously difficult to achieve. Protectionist instincts remain powerful.

Now, I don't want to appear nave here. Pressure to move toward globalization is built on self-interest, just as is pressure to close borders. What's required is strong leadership that can direct those powerful, commercial self interests toward an international trading system that benefits all the participants and is a deterrent to conflict. The philosophy behind this idea is complex“—and the practical execution will be much more so.

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