Bdoes cross-border trade bring people closer together? The hope for it is about as old as human civilization. The trade routes of the Mycenaean culture (1500 to 1100 BC) stretched from the Aegean through Crete, Cyprus, modern-day Turkey and Lebanon to Palestine and Egypt. The oil extracted from the olive trees of Crete was exported in large cans to all directions of the world. Prosperity and progress were the fruits of this global world order.
Today, roughly 3,500 years later, we are in the process of throwing the idea of “change through trade” into the (green) bin: “That was wrong”, pure “illusion”, that’s how succinctly the German Foreign Minister Annalena Baerbock put it that merely reflects the cultivated zeitgeist. As if it were a new discovery: Measured by “Western values”, many of the countries in the world with which we trade are pretty villainous. However, it is now said that there should be no economic activity with villains.
What would be the alternative? Change without trade? Models for this would be North Korea or China and the Soviet Union during the Cold War. We don’t or didn’t trade with them. Nothing has changed there either. But the West was on the good side. Scanned with the morale probe, there probably wasn’t even the USA left today. There they have the death penalty, there young men shoot mass murderously with freely bought weapons. It is actually not possible for us to obtain our oil and gas from the Gulf States in the future and in return to delight them with solar systems and wind turbines. Because Qatar & Co. are really not “flawless” democracies.
Let’s focus on China. A state miles away from “Western values”. Anyone who locks 200 million citizens in domestic corona quarantine for weeks and has been torturing minorities in camps for years has a problem with freedom and human dignity. The country’s autocratic leadership is evidently resorting to the tactics of mass mobilization from the revolutionary days of Mao. And thinks that today’s problems can be better solved with a consistent planned economy.
Should we consequently also impose economic sanctions on China and, if not stop trade altogether, at least drastically reduce it and link it to value-oriented good behavior? Slow down! I consider the polemics against “change through trade” not only to be clearly premature, but also misguided and ultimately even dangerous.
Let us first ask what is actually meant by “change through trade”. That’s not so clear to say. In terms of meaning, the main thing that changes is whether the formula “only” refers to economic or also to political change. According to Adam Smith, the classic (“The Wealth of Nations”, 1776), economic integration benefits everyone who participates in it: The international division of labor recommends that everyone should produce what he can produce relatively best and cheapest, and that the borders of the states must be open for imports, exports and investors. All this benefits technical progress and brings growth and prosperity. Incidentally, cross-border trade is also the best anti-inflation medicine because it depresses prices while self-sufficiency-oriented protectionism drives them up.