Free-trade, institutionalism, and cooperation: classical liberalism’s theoretical elements to prevent war

Classical liberalism is difficult to define. Based on freedom and self-interest, it promotes cooperation and peaceful coexistence among States. In classical liberal perspective, individuals want to pursue their interests, but anyone – States and people – have different preferences when acting in the international environment, and this might lead to conflict and war among nations. Classical liberalism is hostile to wars, and it promotes solutions that contribute to mitigating conflict outbreaks. The promotion of free trade and free market, the adoption of international institutionalism, the reinforcement of States’ checks and balances, and the promotion of peace are to be considered classical liberalism’s answers that mitigate war occurrences. Liberalism discourages and rejects both violence and arbitrary coercion, prompting individual preferences and freedom. Free trade stresses how war is irrational and meaningless in a more than the ever-interconnected world.

By Amedeo Gasparini*

Defining classical liberalism

As it encompasses Economics and International Relations, Politics, and Philosophy, liberalism is difficult to define, but what many scholars seem to agree upon, is that it is one of the most influential traditions of thought of the European Enlightenment (Burchill 2013). Liberalism was born in the seventieth century and thrived in the nineteenth century, influencing many interconnected disciplines till today. Its origins are to be found in John Locke, Adam Smith, Jeremy Bentham, Immanuel Kant, and John Stuart Mill among many prominent scholars. Some of them extensively contributed to the so-called Age of Reason, which shaped liberal theorists’ ideas, starting from the economic-commercial field, then spreading the liberal discipline to politics and governmental practice. Liberalism – not to be confused with today’s political American meaning – emphasizes humanity’s capacity to improve and progress through history and manage the differences in society. Liberalism trusts in progress and free economics (Devetak 2017), as well as in the opportunity of the individuals to increase their benefit – in terms of preferences and political outcomes. For classical liberalism in International Relations the human being is at the center of the political discourse.

To achieve its freedom in the fields it operates, the individual needs to cooperate to get the maximum benefit. Cooperation is needed to get individual outcomes, thus leading to interdependence and peace among actors (Zacher-Matthew 1995). Concepts such as open society, weapons reduction, adherence, and complacency to international law, as well as tolerance and critique to imperialism and protectionism, respect of human rights and dignity, attention to the individual preferences and the rule of law, are liberal theory’s crucial elements. Liberals and classical liberalism are optimistic and active in promoting human freedom expansion, particularly through market capitalism and free trade. Within liberalism’s perspective, the State cannot efficiently allocate scarce resources according to the individual’s needs. Classical liberalism in International Relations borrows many concepts from the early economic liberalism and thus, on the international stage, it seeks to understand how States might harmonize their different interests through competition and cooperation.

Within classical liberalism’s perspective, individuals always try to pursue their rational interests. It was Adam Smith who showed that individualism and self-interested actions may positively spill over on society, producing positive outcomes for many (Waltz 1979). According to rationalism, individuals always try to maximize their outcomes (“utility maximizers”), are risk-averse, and promote their different interests (Moravcsik 1997). In International Relations, States try to achieve their preferences, but the existence of a plurality of actors might entail, according to realists and pessimists, conflictual relations. The great dilemma of International Relations is then how to prevent this from leading to disputes and war among actors. The most important issue allowing the harmony of common interests is trading, which shapes common interests among States, increasing prosperity, thus political power as well (Oneal-Russett 1997). As individual players, States too seek to maximize their gains; they are goal-seeking actors (Hasenclever et al. 1997). Not always States cooperate and thus conflict might occur among them. Classical liberals seek to stress how war is pointless to society, to the economic transactions, and the individual.

Lockean-classical liberalism seeks to prevent war from occurring, because war ravages economic and social structures – a “poor game”, in Kant’s words. Why is the attitude of classical liberalism in International Relations hostile to conflicts and which policies might be adopted in a classically liberal perspective to prevent war from occurring? Classical liberalism sees war as inconvenient and systemic damage for the society and in its International Relations variant, it prioritizes the mitigation and discouragement of conflict among nations. After an initial introduction on the irrationality of war in International Relations and the interdependence of the nations in the international system, four elements of the liberal tradition are here presented as deterrents to conflicts according to the liberal worldview. They are free to trade and market, adoption of institutionalism, strengthen checks and balances and need to promote peace and cooperation. These elements are within the tradition of classical liberalism concerning human freedom and actors’ self-interest.

Irrational war and interdependence

Classical liberalism in International Relations is concerned with war and conflict generated by crushes of preferences among actors. However, unlike classical realism, it maintains that actors’ differences can be peacefully solved. It is flexible and optimistic in its formulations, but it maintains that war destroys benefits and goods, erasing global interdependencies and interconnections. The disruption of ties within the international society is detrimental for classical liberalism. The relationship between economics and war is a relevant issue for International Relations. Classical liberalism’s scholars have been among the first to stress this fundamental link. That is because classical liberalism has a close concern about economics and commerce. On the other hand, realism has always stressed the importance of the security of the State, as well as the incompatibility of interests without the outbreak of conflict. According to classical liberals, war is unnatural and irrational (Burchill 2013) in social relations. Violence within International Relations is anachronistic and unhelpful to strengthen the fruitful ties needed among nations. With time wars and their associated costs have become more expansive than they used to in the past. The result of this is that war itself has diminished over time, allowing the single individual to thrive peacefully and pursue its interests.

Armed or conflictual disputes entail the use of force which is dangerous for global interconnections. Indeed, according to classical liberals, interdependence among nations reduces the incidence of interstate conflict (Oneal-Russett 1997). Classical liberals suggest focusing on international trade instead of wasting resources in bloody wars, which worsens the counterparts’ economies. On the contrary, trade is mutually beneficial. Norman Angell (1911) plays a crucial role in establishing how war is meaningless in modern society, built on commercial ties among States. Angell explains that war is economically irrational, and the expansion of free trade and interconnections made the necessity to enlarge States’ territories quite obsolete (Fukuyama 1992). His famous “great illusion” is simply that: it is the fact that expansion through violence and conquest will not necessarily increase a country’s welfare. The territorial expansion will not benefit citizens or States’ finances. World War One brought vast devastation in Europe. Only a few analysts understood that even at that time States and empires were well interconnected through trade and investments (Panke-Risse 2016). This should have made them unlikely to go to war and refrain from conflicting since this would have disrupted not only interdependence but also possible mutual gains, which occurred in 1914 eventually.

Angell (1911) proposes many arguments discouraging war and violence in International Relations. For instance, he argues that brute force is not desirable when seeking to increase health; force should be the force of individual intelligence and rational self-control. The mutual legitimization of each partner would also discourage conflict and violence, thus the occurrences of war. When States and people are convinced, they can better promote their interests and gains through cooperation instead of fighting to provide resources, war is potentially a very remote scenario, simply because there is no incentive to start an armed conflict over resources. Angell (1911) argues that even if States conquer other States, they will not gain any benefit out of it. In his perspective, the more conquered territory is an “optical illusion”, which does not make any good even for the hegemon States. The destruction of trade of the vanquished State will disastrously turn against the conqueror, according to the author. Even if a great power were to invade a small one, the former would not get any real benefit according to Angell. Before achieving the supposed gains from the conquest, the financial loss of the conquering States would be immense. One of the main arguments discouraging States to invade their neighbors for economic reasons is the high costs of the following repercussions.

Classical liberalism in International Relations is strictly interconnected with economics. Commercial liberalism explains people’s and States’ behavior (Moravcsik 1997) and works around the issue of limiting war and conflict to make the society. Transborder economic, trade, and financial transactions are the object the commercial liberalism, which explicitly links peace and free trade (Baldwin 1993). An important issue, useful to understand classical liberalism’s attitude towards war and economic loss. Institutionalism evolved through the centuries and liberalism accompanied it throughout the years. With globalization, States have become by time more independent, but even more interdependent on each other. Economic interdependence and economic ties strengthen mutual commitments and connections among nations and liberal norms usually prompt accommodation instead of conflict (Oneal-Russett 1997). Furthermore, it contributes to the creation of the community’s security and ensures States do not get economic sanctions and penalties (Burchill 2013). Angell (1911) explains that when interdependence grows, states lose from going to war. Strong ties among States and individuals are severed when they start conflicts, major disputes, or wars. Angell is wrong in affirming that (irrational) war would never occur within an interdependent regime.

Communication and globalization made single national economies so interdependent with each other, that war will only be disruptive and costly to anyone involved (Zacher-Matthew 1995). While realism sees International Relations as a contest for power among States and their self-interested goals, liberalism argues that States are discouraged from resorting to force and violence due to their strong economic interdependence, which might be threatened if war is engaged. Institutionalism produces interdependence, and interdependence is the product of institutionalism. Interdependence discourages wars and conflicts because it is related to free trade and the abolition of barriers, tariffs, and duties, which limit the free circulation of goods, people, and economic goods. This leads to an impoverishment of anyone’s conditions. With rising interdependence among States (both today and at the beginning of the last century), conflicts between nations indeed were (and are) bad for business. Institutionalism, common institutions, commitment to strengthening mutual interdependence are medicines to heal inclinations towards conflicts among nations. Free trade and liberal democratic capitalism show that war is not and no longer necessary for States’ development (Morgan 2007).

Classical liberalism’s proposals to avoid conflict and war

Promotion and enhancement of free trade and free market, the adoption of institutionalism, the reinforcement of States’ checks and balances, and the promotion of peace are classical liberalism’s answers that mitigate conflict and war.

Capitalist free trade and free market

War might be mitigated in the first place by free trade, which brings huge benefits to many people and States. Starting wars would alter the free trade system and cripple the international commercial flow with costly duties and barriers among nations. Historically, classical liberals wanted to abolish royal charts (Oneal-Russett 1997) and privileges, but also tariff and non-tariff barriers, arguing that laissez-faire would have reduced wars’ occurrences because of the large-scale benefits generated by trade and its fruitful results. More economic freedom leads to more trade and commercial integration and interdependence among actors. Free market reduces the conflict occurrences. The spread of the market will increase goods available for anyone and will let the people to self-regulated within the market according to their preferences. Conflicts over limited resources are likely to be limited, as the economic benefits of the free market would bring prosperity. Positive trade relations and economic self-interest create relations of mutual dependence and reduce conflict among nations (Burchill 2013). Countries should become partners instead of foes; and this is achieved via more integration of each other’s economies. The spread of free trade is an old classical liberalism’s dream.

Favoring more free trade and “spreading” the single-minded transactional approach that generates benefits, is the contrary of a narrow-minded protectionist trade policy (da Conceicao-Heldt 2014). Struggles and disputes are likely to occur when protectionist measures are taken. Not only do tariffs and borders decrease the income and the revenues of both partners, but these policies might even foster the likelihood of a pointless and hampering commercial war. In a free market regime, free trade must be assured precisely to avoid these kinds of scenario that lead to systemic troubles in the long term. Supply and demand work in balance (Chernoff 2007) and according to individual preferences. Free trade’s most revolutionary aspect is that it is related to peace. Free trade is a necessary, but not sufficient, condition of peace. Free trade is a peaceful force and means, which would make people better off than if they pursue nationalist alternatives (Burchill 2013). Free trade strengthens peace among nations. It liberates people and their desire for goods might expand the understanding among nations. Economic openness is healthy for productive relations among commercial partners. While borders lead to economic inefficiency and negative impacts on the society, open and international markets do ensure optimal allocation of production’s factors (Aggarwall-Dupont 2017).

According to classical liberalism, national restrictions or duties might eventually lead to a dangerous fight and unnecessary tensions among States. However, establishing a free market-based economy might discourage political leaders and nations from the unwise pathway of protectionism, which historically is one of the most fruitful premises triggering conflicts. Within classical liberalism’s perspective, the benefits of free trade should help to prevent States to opt for war to solve controversies. War is seen as irrational because of the implicit damages it involves, but also because of the missed opportunities to strengthen ties. That free trade leads to interdependence, which replaces unilateral acts of aggression among States (Burchill 2013), thus conflict. According to classical liberalism’s proposals, the free-market regime allocates at best resources among interacting actors: individuals exchange resources and goods satisfying their personal needs according to their preferences. Provided that the trade relationship is fair and inclusive, if one lets the market do its course, no war or conflict would occur among trade partners. The fact that human beings and political systems are connected raises interdependence as well as it raises the costs of war and conflict (Zacher-Matthew 1995). Free trade within a capitalist free market regime generates peace and prosperity.

Adoption of neoliberal institutionalism

A second proposal and solution to prevent war is another classical liberalism’s flagship: the adoption of the institutionalist approach both at home and abroad. Liberals argue that cooperation is crucial in International Relations and global institutions since it shapes expectations among actors. The adhesion to neoliberal institutionalism is a core assumption of liberalism in International Relations. Classical liberalism promotes the integration of both partners and institutions, helping actors to get what they would not be able to get alone. In other words, institutions are tools to achieve goals easily and together, as they are based and rely on actors’ cooperation. Classical liberalism – but most of all neoliberal theories of the late Seventies and early-Eighties – sees international organizations and institutions as means to create incentives among States (Chernoff 2007) and to make them cooperate. Intergovernmental cooperation with the help of institutions is essential in the liberal perspective and creates global interconnections. Adhesion to institutions prevents war occurrences because States are entangled and interconnected with one another, thus theoretically less willing to fight.

States enter international institutions not only to reduce conflict (Keohane 1984) but also to prevent conflict outbreaks. The “institutionalist approach” is closely related to idealism, but it provides concrete answers to problems. Classical liberalism has always been accused of being utopian and idealist but with the neoliberal institutionalism’s turn, it is more credible in being one of the crucial elements of the “liberal arsenal” to reduce conflict occurrences and being a solution to avoid serious confrontations among States. Originated after the First World War, idealism argued that the disasters occurred then were the result of a lack of cooperation among States and of suitable institutions encouraging it (Hollis-Smith 1990). Thus, international institutions are not only a feature of classical liberalism but are capital for liberalism. They are the pattern States deal in International Relations and States interact and solve controversies with. Preserving and enhancing institutions is imperative to those who want to prevent war outbreaks and seek a solution to possible conflict. Institutions are communication channels and promote effective and peaceful deal-making.

Strengthen the checks and balances

Classical liberalism was born from the necessity to implement the notion of the rule of law and the confinement of the State within the necessary bounds to leave the individual to pursue its preferences. Classical liberalism advocates for a limited but strong State. A State that is efficient in the few tasks it has given the authority over. A State forged within the systems of checks and balances, which prevents the government to take over all the political power. Classical liberalism is concerned with having a State that observes the mechanism of the internal checks and balances vis-à-vis its coercive power on the population. Strengthening checks and balances constraints the role of the State and helps to prevent arbitrary behavior of its officials and bureaucracy. Thus, checks and balances do help to prevent the outbreak of conflict that would imperil the State’s structure in the first place. The adoption of liberal institutionalism abroad goes hand in hand with the strengthening of the checks and balances and institutions at home. Checks and balances mean solidifying institutions domestically and putting adequate checks to the government’s powers, which also helps to lower liberal democracies’ perceived threats (Haas 2007). The system preventing the government to undertake actions that might alter both the social and economic fabric is an important political tool within the liberal perspective.

Checks and balances help to strengthen democracy, which contributes to averting the risk of war starting from internal troubles. If State’s internal environment is healthy and under the system of checks and balances, the overall inter-state and stability of the State itself will have positive repercussions on its foreign policy. Classical liberalism considers the democratic processes in the society as a means of preventing conflict that would destroy the State itself along with its institutions. Elections, for example, may foster the democratic “we-ness” of States’ citizens. Liberal democracies usually do not “choose” war or conflict as a possible scenario when dealing in International Relations – this is marginally the Democratic Peace Theory’s assumption. Rather, they prefer the checks and balances system of control, that keeps institutions and market working. Divisions of power make wars more difficult to occur; compromise and conflict resolution are usually liberal democracies and classical liberalism’s solutions to internal problems (Burchill 2013).

International peace and cooperation promotion

A crucial element at the core of liberalism itself is the concept of peace. Liberalism proposes the idea that democracies are peaceful among each other (Panke-Risse 2016); it is a force of peace and cooperation, thus promotes these features and values in any field of its application. A peaceful environment benefits all nations and has positive repercussions on individual transactions and relations. Promoting peace and cooperation among States are key elements of classical liberalism: and these are also tools to strengthen the “anti-war” commitment. Despite peace is not always “absence of conflict”, for liberalism peace is the normal state of things (Burchill 2013) in International Relations; a thesis not shared by realism. The inner peaceful attitude of classical liberalism is closely related to the concept of cooperation – peace is based on cooperation, and cooperation is based on peace. Liberals hold war as a dangerous and irrational force. Despite cooperation needs to be distinguished from harmony, the positive open, and positive approach that classical liberalism in International Relations proposes when dealing with issues helps to offer positive answers to the difficulties States might encounter in their relations with each other.

Peace and cooperation are more profitable and attractive than conflict. Adopting institutionalism in International Relations and strengthening checks and balances domestically – the second and the third solutions to limit conflict and war according to classical liberalism proposed above – might lead to the prevention of war and conflict and to a utopian peace. Democratization, economic interdependence, and institutions are mutually reinforcing and have positive effects on peace (Chernoff 2007). Classical liberalism argues that harmony is not automatic and interests between and among individuals and societies are different. Whereas classical realism would see the only conflict in this, classical liberalism sees the opportunity of cooperation and peace within these relations. Cooperation – that is when actors adjust their behavior to others’ preferences (Keohane 1984) – does not mean an absence of competition. And competition does not mean conflict or war. Competition is the result of free and peaceful management of relations among citizens. Promoting peace in International Relations, as well as compromise and cooperation makes conflict and war less likely to occur.

Four medicines: necessary but not sufficient

War is a disease that might outbreak in liberal-democratic States, and it destroys relations among people and nations. But war is an illness that human beings can cure with the twin medicines of democracy and free trade (Burchill 2013). Eliminating barriers, promoting dialogue, and strengthening international bodies of organizations and institutions might help to make war and conflict even more expansive and irrational. With globalization and the growth of ties among societies and nations, conflicts still will occur. The above-mentioned solution and proposals of classical liberalism will not solve every problem in International Relations, but progressively in a limited way. Individual interests and preferences are much stronger than war, which according to classical liberalism in International Relations might be theoretically prevented via free market and free trade, promotion of institutionalism, strengthening of checks and balances, and promoting peace and cooperation internationally. These elements are necessary but not sufficient elements that will reduce conflicts and wars within the liberal understanding. War and conflict destroy personal interests, preferences, goals, and aims. And freedom too. In the liberal perspective it is simply non-convenient to engage in conflict among States. Liberalism discourages conflict and violence, prompting individual preferences and freedom.

In a nutshell, “there is room for everyone” in the world. Wealth is not fixed and through free trade can find its best way to be enlarged and increased only via more integration, cooperation, fair play, institutionalism, and peace. Interests and frictions will not disappear among actors, of course, but the promotion and enhancement of free trade and free market, the adoption of institutionalism, the reinforcement of States’ internal checks and balances, and the promotion of peace are classical liberalism’s concrete solutions and answers mitigate wars’ outbreaks. Since Angell’s times, the acceleration of interdependence has grown thanks to the open system promoted by classical liberalism; simultaneously, war decreased partially because of the adoption of the “four liberal medicines”. Self-interests can be further expanded if more cooperation and institutionalism would be embraced within International Relations. If appropriate checks and balances and institutions are created, strengthened, and promoted within the State, States will produce more communication and agreements which will benefit all the actors of the (international) system (Chernoff 2007). The four tools are not conflicting with each other and are not conflicting with classical liberalism’s lynchpins of freedom and self-interest.


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*Amedeo Gasparini, class 1997, freelance journalist and researcher, managing “Blackstar”, MA in “International Relations” (Univerzita Karlova, Prague); BSc in “Science of Communication” (Università della Svizzera Italiana, Lugano).

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