India, Free Trade, and World Peace

India watchers and those depressed by the Dubai Port fiasco may be interested in the oped by Condoleezza Rice in the Washington Post today. Much of the news surrounding Bush’s trip has focused on the nuclear pact his Administration brokered. In the oped, Rice talks about the normal stuff about stopping nuclear proliferation and energy secuity, but she only glances on a far more important reason Bush’s trip may be important for world peace: free trade. She throws a sliver of an economic bone in this direction when she writes: “Our agreement is good for American jobs, because it opens the door to civilian nuclar trade and cooperation between our nations.” She’s a little closer to the truth when she says the agreement is “an essential step toward our goal of transforming America’s partnership with India.” But, the key benefit is not the so-called partnership. This is diplomacy speak that seriously underestimate a far more important relationship that could emerge from the agreement. It’s not just about “new opportunities” arising for a “partnershuip between out two great democracies.” It’s about (or should be about) unleashing unprecedented opportunities for investment and entrepreneurship independent of diplomacy. Long term, the more important effect of these new agreements will be to lay the groundwork for embracing India as economic juggarnaut it will become if it continues to embrace free trade and entrepreneurship. It’s not about a governmental partnership, or governments brokering deals. It’s about creating an environment in which entrepreneurship, investment, and job creation can finally reach a critical level, synergized by an undestanding of mutual benefit (not dependence), and capital and human resources are allowed flow more freely between the U.S. and India, making them both more productive. This is more than political negotiation, or finding the “right partner”. Democratic nations with free economies tend to avoid war, not seek it out. The best way to ensure global peace is to make sure a robust trade exists among them. Through trade, they recognize the costs of going to war and the absurdity of foreign policies that look at human and economic relationships as a zero-sum game–the spoils of which can be negotiated over a nice dinner. Rather than looking at free trade as fostering economic dependence, we should think of it as an investment in world peace. To the extent the nuclear agreement with India begins to open this door further, the world (and the U.S. in particular) will benefit. The folks at Dubai Ports probably understand this, even if Congress doesn’t.

Samuel R. Staley, Ph.D. is a senior research fellow at Reason Foundation and managing director of the DeVoe L. Moore Center at Florida State University in Tallahassee where he teaches graduate and undergraduate courses in urban planning, regulation, and urban economics. Prior to joining Florida State, Staley was director of urban growth and land-use policy for Reason Foundation where he helped establish its urban policy program in 1997.