Does trade cause peace? Ask an economist

IN CASE you haven’t heard the embarrassing tale of the British writer Norman Angell, here’s how it goes: In a bestselling book, The Great Illusion, he argued that the economic ties between European nations were so strong that war was impossible. His book was such a hit that he produced several editions, including a special bulked-up version that hit US bookshops in 1913.

A closer look at Angell’s writing reveals falsehoods within this folklore. In the 1913 edition of his book, he wrote: “War is not impossible, and no responsible pacifist ever said it was; it is not the likelihood of war that is the illusion, but its benefits.” His argument was more subtle than is often remembered – trade had made war so expensive that any leader with half a brain should avoid it. It followed that stronger economic connections should help to sustain peace.

It’s a nice idea, but does it hold up? Two recent data points seem supportive.