Global inequalities and the democratic peace

The observation that "mature" or "consolidated" democracies virtually never fight each other, a/k/a 'the democratic peace', has been linked by some researchers to (among other things) patterns of trade among democracies. However, the democratic peace is not usually connected to the changing global division of labor and global North-South inequalities. Nicholas Lees's article in the June issue of Millennium -- "Structural Inequality, Quasi-rents and the Democratic Peace: A Neo-Ricardian Analysis of International Order" [abstract here] -- explores "the causal connections between global inequality, class formation and the democratic peace" through the lens of the neo-Ricardian idea of quasi-rents (p.492). I won't try to summarize all the details of the article; rather, this post will cover some of the piece's key points while offering some related thoughts.

To begin, it will be helpful to rehearse a bit of recent history. Starting in the early or mid-1970s, 'the Keynesian accommodation' and the Fordist economic model, which together produced several decades of strong economic growth and economically secure working classes in the developed capitalist countries, broke down. In tandem with, among other things, the end of fixed exchange rates, increased capital mobility, and the relocation of manufacturing to parts of the global South, the breakdown of Fordism marked the end of capitalism's 'golden age' (the phrase is from Hobsbawm, The Age of Extremes, who in turn borrowed it from a 1990 book, The Golden Age of Capitalism, edited by Marglin and Schor). The result was increased inequality, wage stagnation, the weakening of organized labor, and a decline, to use the language of Lees's article, in workers' ability to bargain for a share of quasi-rents [for the short definition of quasi-rents, see the note at the end of this post]. As Lees writes: "The defeat of organised labour in much of the advanced industrialised world, combined with the dispersion of productive capacity to the new semi-peripheries, seems to have eroded the quasi-rents of workers in tradeable sectors in the North" (506). 

The end of capitalism's post-1945 golden age was noteworthy, however, not only for what it entailed but for what it did not. First, it did not wipe out the structural advantages enjoyed by the economies and firms of the developed world. A large amount of manufacturing relocated to the semi-periphery (or the 'newly industrializing countries'), but more "sophisticated" activities, involving the interplay of innovative technologies and highly skilled workers, remained concentrated in the North. The global trade regime, as administered by the World Trade Organization, generally continued to favor the richer countries, notably though not exclusively in the area of intellectual property. Moreover, as Lees notes (summarizing Raphael Kaplinsky), buyer-dominated global supply chains allow "large buyers located in the North...to bargain down producers of generic manufactures," such as textiles and furniture (500). Thus, while "within-nation inequality has increased almost worldwide" over the past thirty years, "population-weighted between-nation inequality of purchasing power-adjusted incomes has decreased," but only decreased "slightly -- largely as a result of moderate increases in per capita incomes in China and India" (502; emphasis added).  

Secondly, the end of capitalism's golden age was not accompanied by a collapse in the framework of international politics and specifically not by the outbreak of a major war involving the great powers. On the contrary: in the late 1980s and early '90s the Cold War came to a (relatively) peaceful end, while the phenomenon of interstate war went into decline, as did, albeit more unevenly, armed conflict in general. This conjunction might seem surprising: some might have expected a period of considerable economic turmoil in the 'core' states of the system to have led to a breakdown of order in international politics, or at least to have engendered more violent conflict rather than less. But perhaps the decline in armed conflict, of which the democratic peace is the most theorized aspect, is only temporary; perhaps the democratic peace rests on or presupposes a degree of economic security in the 'advanced' countries rooted in the now-vanished political economy of Fordism, which, among other things, afforded workers access to quasi-rents through strong labor organizations. If so, the end of Fordism, and the concomitant decline or disappearance of the relatively widely shared prosperity in the 'advanced' countries that Fordism underwrote, could be expected eventually to erode the democratic peace.

That, at any rate, is a possible implication of Michael Mousseau's argument about (to quote the title of one of his articles) "the social market roots of democratic peace."  In brief, Mousseau's argument, as Lees presents it, is that economic development in 'contract-intensive societies' (i.e. those based mainly on impersonal market exchange rather than patron-client arrangements) produces non-belligerent values that undergird such societies' lack of hostility toward each other (509-510). By contrast, patron-client networks promote "strong in-group identification and hostility to out-groups -- values which Mousseau argues are externalised in the foreign policy of states" organized on clientalist, neo-patrimonial lines (511). 
 
"In the contemporary world, contract-intensive societies have tended to be social market democracies in which the benefits of economic development are distributed fairly widely" (510). However, as these benefits become less widely distributed in developed capitalist economies (see above), the logic of Mousseau's argument suggests that the values supporting the democratic peace could be undermined (512). 'Advanced' democracies have not hesitated to depart from their professed liberal values when such a departure has been deemed necessary "to maintain the global political and economic status quo," and "[i]f the socio-economic foundations of this status quo were to come under more serious strain, actors within the core might actively reject these liberal values" (513). Lees wisely avoids any predictions about a resumption of interstate conflict in the North, however, observing that several factors may work in the opposite direction (513).

Lees makes a strong case that a combination of Mousseau's approach with structuralist theories of class formation and the North-South divide sheds light on the deep foundations of the democratic peace. But if the democratic peace is seen as merely one aspect of the broader decline in armed conflict, Mousseau's perspective may be less helpful. Mousseau's 'social market explanation' of the democratic peace, which roots both democracy and peace in a particular kind of social and economic development, conceivably could be extended to cover the decline of armed conflict in general. But here it might run into problems: perhaps one could show a connection between 'contract-intensive' economic development and the overall decline in armed conflict, but such a connection is not immediately obvious. 

John Mueller's obsolescence-of-major-war argument (see, e.g., here) and/or Douglas Gibler's 'territorial peace' argument (see, e.g., here) might well be better explanations of the overall decline in war. Mueller, in contrast to Mousseau, takes a more constructivist and elite-oriented view, arguing that great-power war has become so normatively unacceptable that it is no longer part of the set of options that decision-makers have in their heads. In Mueller's view, peace among 'developed' countries rests less on the material circumstances of their populations than on most leaders' and publics' conviction that war has none of the positive features that were once attributed to it, especially in the late nineteenth and early twentieth centuries (i.e. pre-1914). In their different ways, Mueller and Gibler view the democratic peace as one part of a larger trend, one that may be strongest in but is not limited to the rich countries of the North, and Mueller does not draw the tight connections Mousseau does between material conditions, liberal values, and peace. (Gibler may not do so either, but I'm less familiar with the details of his work.)  

In the opening of The Age of Empire, published in 1987, Eric Hobsbawm wrote that "the question of the origins of the First World War...has remained alive, because the problem of the origins of world wars has unfortunately refused to go away since 1914" (p.6). Although the upcoming hundredth anniversary of the outbreak of WW1 has occasioned a renewed flurry of interest in its origins, one wonders whether, from the standpoint of 2013, the origins of world wars is an issue of anything more than purely historical concern. It has been argued that with each further year of great-power peace it becomes more likely (not certain, but more likely) that the two world wars of the twentieth century represent a phenomenon -- i.e., 'hegemonic' or great-power war -- which has now ceased to exist. If that turns out to be correct, future historians looking back probably will see the end of hegemonic war as the main development, beside which the democratic peace may figure as little more than a footnote. 

This leads to the speculation that the research program on the democratic peace may have run its course. Scholars of international security will continue to find things to write about, and one can expect an ongoing stream of publications on civil war, terrorism, nuclear proliferation, enduring rivalries, R2P, and other matters. Increasingly, though, it appears that the most serious threats to planetary survival will not come directly from these war-and-peace issues, important as they are, but from the environmental and economic problems and crises that the capitalist world economy continues to generate. Admittedly, whether those economic forces will result in a resumption of great-power conflict, or whether the decline of interstate war is a phenomenon basically independent of trends in the global political economy, remains an open question. In any case, Lees's article deserves attention for, among other things, the thoughtful way in which it links issues and literatures that are not usually considered together.
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Note: Rent "refers to an economic return on a resource greater than the opportunity cost of the use of that resource," and quasi-rents "are temporary rents which arise where the supply of a resource [such as technology] is fixed over the short term but not over the long term" (495).