Mortal Enemies or Peaceful Partners?
Frederic Bastiat- 19th century French political thinker- is attributed with the aphorism, “When goods don’t cross borders, soldiers will.” Thomas L. Friedman came up with its corollary, the McDonald’s Theory of War - two countries with a McDonalds franchise won’t go to war- only 150 years later. The implication that we don’t often think about is that the rule applies to individuals as well.
Market exchange leads individuals who would otherwise be at war with each other to be allies. In St. Louis, the peaceful powers of exchange appear to have brought together a most unlikely pair; a white supremacist and a black inner-city gangster. According to St. Louis Today the two men met in a half-way house after simultaneous prison stints and hatched a plan to buy Sudafed in bulk for meth production. The story demonstrates both the power of market to engender cooperation amongst what superficially appear to be enemies into allies and the futility of the war on drugs.
“It’s all about the money. They put away their differences to get the job done,” said local law enforcement. While that may surprise the sheriffs’ corporal, it would not surprise anyone who understands the power of markets to bring about peaceful interaction of those who might otherwise engage in violent exchange. Voluntary is exchange is not only mutual beneficial, but also mutually peaceful. In this case it actually allowed for the employment of at least 150 people to buy as many as 200 boxes of pseudoephedrine over two months. Market exchange allowed for these people to interact with each other in a peaceful manner.
This case does challenge another economic result, however. Typically, we’d expect prohibition to lead to increased violence as those with a comparative advantage are attracted to the sale of the prohibited product. The sale of illegal goods carries with it an increased probability of arrest and jail time thereby raising the cost for those with a lower rate of time preference, those who place a higher value on the future, and driving them from the market. Those that are left have a higher rate of time preference (they value the future less) and therefore find the cost of jail time to be lower. Those with higher rates of time preference are also more likely to engage in violence because they value life (the future) less than those who shy away from violence. An unintended consequence of prohibition is an increase of violence in the black market for the illegal good. It is not a coincidence that illegal drug markets are violent while markets for alcohol are not. This was not always the case for alcohol, however, during prohibition, alcohol markets were characterized by legendary amounts of violence.
Indeed, the individuals involved in this exchange are no doubt violent, hardened criminals not to mention natural enemies. This makes the partnership even more surprising. When goods crossed the borders between white-supremacists and inner-city black gangs their armies did not. “ Unusual partnerships are becoming usual partnerships…groups of people that you typically wouldn’t find in the same room [are] hanging out together.” If trade can bring peace to these two imagine what else it is doing. Trade is a powerful peacekeeper, perhaps we should try to extend its reach rather than limit it.
