Economic Essay

1685 Words7 Pages
Economic interdependence leads to peace. Discuss this statement using international relations theories. The relationship between two or more nations or states which are somehow dependent on each other for crucial goods or services is known as economic interdependence. It usually occurs when both nations are specialized in one particular requirement and they both must trade with each others for unmet requirements. There are three types of perspective that shall be use to explain economic interdependence. The first is the liberal view that argues that interdependence reduces confilct and promotes peace. Secondly, the realist perspective who argues that interdependence leads to conflict which reduces peace. Finally, the third part is based on the trade expectation theory. The main point raised by the liberal perspective is that interdependence decreases conflict thus, leading to peace. It is believe that as states’ economies are all linked together by interdependence, the cost of conflict increases, therefore the liberal’s argument claims that interdependence discourages conflict to occur. War was one of the ways to obtain money, but according to the liberals, if money could be obtain through other ways or through interdependence then it is less likely to practice the previous method to acquire capital that is, practice war to gain money. According to liberals, trade pays far much more than war actually does. Money is made through trade and not by opting for war, so it is better for dependent states to trade instead of invading. The argument that dependent states should go for trade not invade because peaceful trading offers far more benefits than war is supported by the proposition that modern technology greatly increases the cost and risks of aggression, which in returns makes trading option looks more rational than war. Richard Cobden, in the 1850s was the

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