Peace and Free Trade
3 November 2007
Editor, The Washington Times
To the Editor:
Ken Adelman rightly notes that foreign investment is good for the American economy ("Foreign investment counsel," November 3). Such investment improves worker productivity, thus increasing outputs and wages.
But Mr. Adelman overlooks the greatest benefit of foreign investment, namely, it promotes peace. Economists Solomon Polachek and Carlos Seiglie find that freer trade and greater foreign investment between any two countries make those countries less likely to go to war with each other.*
This happy effect reflects some ancient business maxims: don't kill your customers; don't shoot your suppliers; don't destroy your own capital.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
* http://papers.ssrn.com/sol3/papers.cfm?abstract_id=915360
Editor, The Washington Times
To the Editor:
Ken Adelman rightly notes that foreign investment is good for the American economy ("Foreign investment counsel," November 3). Such investment improves worker productivity, thus increasing outputs and wages.
But Mr. Adelman overlooks the greatest benefit of foreign investment, namely, it promotes peace. Economists Solomon Polachek and Carlos Seiglie find that freer trade and greater foreign investment between any two countries make those countries less likely to go to war with each other.*
This happy effect reflects some ancient business maxims: don't kill your customers; don't shoot your suppliers; don't destroy your own capital.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
* http://papers.ssrn.com/sol3/papers.cfm?abstract_id=915360
Posted by Don Boudreaux on
Wednesday April 23, 2008 at 2:43pm