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Capitalist peace


The capitalist peace, or capitalist peace theory, posits that according to a given criterion for economic development (capitalism), developed economies have not engaged in war with each other, and rarely enter into low-level disputes. These theories have been proposed as an explanation for the democratic peace theory by accounting for both democracy and the peace among democratic nations. The exact nature of the causality depends upon both the proposed variable and the measure of the indicator for the concept used.

The philosophical roots of capitalist peace can be traced back to Immanuel Kant, Joseph Schumpeter, Norman Angell, and classical economic theory. In his 1795 essay Perpetual Peace, Immanuel Kant argued, among other things, that “the spirit of commerce . . . sooner or later takes hold of every nation, and is incompatible with war.” In the early twentieth century Norman Angell reasoned that trade interdependence in modern economies makes war unprofitable. Later, Joseph Schumpeter offered the observation that with the advancement of capitalism people form “an unwarlike disposition.”

The modern capitalist peace emerged with the democratic peace. In one of the earliest systematic confirmations of the democratic peace, Stuart Bremer also examined the relationship between capitalism and war. He found capitalism to be a more powerful force for peace than democracy, yet the democratic peace accrued much more attention in the academic and policy literature. Today at least four theories of capitalist peace can be identified, with some of these theories claiming that a capitalist peace may subsume the democratic one, given that capitalism may be the cause of both democracy and peace.

A key to explaining the capitalist peace rests on the indicative measures for capitalism. There are at least four different definitions of capitalism currently being employed.

A number of models of the capitalist peace equate free markets with capitalism. In this usage, free markets and trade cause economic development, which in turn accounts for the peace among nations with advanced economies.

A second understanding of capitalism is one that is conceptualized based on the intensity of market contracting in a society, where a capitalist economy is defined as one where most actors in the economy are integrated by contracting in the market. By definition contracts must be voluntary and undertaken without coercion.

In the third measure for capitalism inter-state trade is seen as an indicator for a developed, hence a capitalist economy. The level of trade interdependence, therefore, is the operationalized measure of this third type of capitalism.


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