Why not try something new? This year, the Nobel Peace Prize should not go to a person, but to an idea: because free trade is our last hope against violence.
The Nobel Peace Prize normally honors deserving individuals. Complexity is reduced to individuality, whereby the person honored must of course stand for a noble principle: for peacefulness, for freedom of opinion, for the rights of minorities.
But how about if, in this year of war – when there is shooting and death in Europe and the Middle East, when a threat race has begun around Taiwan and the major powers are imposing punitive tariffs and sanctions on each other – we shorten the routes and honor not a person but the principle.
This is especially true since the majority of influential public figures are beating the “hate drum,” to use Stefan Zweig’s words. Even if they do this with varying degrees of fervor, the world today has not produced anyone who, in accordance with Alfred Nobel’s will, has contributed “to brotherhood among nations and to the abolition or reduction of standing armies.”
The words of the contemporary world are not brotherhood and disarmament, but retaliation, ground offensive and rearmament. Or, in economic terms: protective tariffs, boycotts, sanctions regimes.
Peace seems to have emigrated and has even taken its little brother, the idea of peace, with it.
The principle that could be used to counteract this world of strife is free trade. The idea of a peaceful exchange of goods for mutual benefit is the most valuable insurance policy that humanity currently possesses. Trade organized by entrepreneurs and employees across all continents, genders, religions and skin colors does not bring war, but prosperity.
Free trade is the last fuse in the big fuse box that still holds somewhat.
But some are already trying to unscrew them and prolong the military conflict with an economic war. “Buy American,” says Joe Biden. Europe first is Ursula von der Leyen’s maxim with her protective tariff policy against China.
We should oppose this approach. Free trade has made the world a richer, more social, more relaxed and, in its best times, more peaceful.
With the agreement that came into force on January 1, 1993, Europe has created a largely free market for the peaceful exchange of goods, services, investment capital and people. In principle, workers and manufacturers, buyers and sellers can move within the internal market just as they do within their countries of origin.
What used to be outside is now inside. There are no longer any foreigners within the EU.
Economically, the removal of all trade barriers triggered an economic miracle. Between 1993 and 2023, the gross domestic product in the EU rose by 175 percent. Germany finally had a sufficiently large domestic market.
The United States-Mexico-Canada Agreement (USMCA), ratified in 2020, created one of the largest free trade zones in the world. The agreement between the three American neighboring countries replaced the North American Free Trade Agreement (NAFTA), which had been in existence since 1994. For the current year, the IMF forecasts that the free trade zone will account for around 26 percent of global gross domestic product.
Since its founding, the gross domestic product of the three countries has increased by a cumulative 273 percent by 2023, according to IMF data. The former US critics of the free trade policy, who feared an impoverishment of the USA, have fallen silent.
The “Mercado Común del Sur” (in English the “Common Market of the South”) includes Argentina, Bolivia, Brazil, Paraguay and Uruguay. The organization was established with the Treaty of Asunción on March 26, 1991. Only democratic states can become members, which is why Venezuela was excluded from the alliance in 2016 after restricting fundamental civil rights.
Quick effect: Between 1991 and 2001, the gross domestic product of the five Mercosur states rose by over 40 percent. Brazil has now risen into the top ten of the world’s largest economies, ahead of Canada and Russia. The average per capita income of the five states has shot up from around 3,600 US dollars to almost 9,000 US dollars in 2023. The free trade agreement proved to be a rocket of prosperity.
For decades, Russian pipeline gas was the most important ingredient for the competitiveness of German industry. The discrimination against all politicians and business leaders who were involved in the commissioning of Nord Stream, Transgas and Yamal is due to political shortsightedness and the need to generate ever new waves of media excitement.
Good economic relations with Russia will also be needed in the post-Putin era. Europe’s largest country and the world’s largest raw materials power cannot be eliminated by UN resolutions. Half of all Western companies, including Mondelez, Unilever, Nestlé and Philip Morris, have therefore ignored Western sanctions and stayed where they are, as the Kyiv School of Economics has analyzed.
We can berate these companies for their opportunism – or celebrate their steadfastness. Their contacts will come in handy later.
Probably no other country has benefited from free trade as much as Germany. Rising from the ruins of the Second World War, with American help, it became one of the world’s great export powers.
In all years since 1952, more goods have been exported from Germany than imported. Between 2002 and 2008, no other country generated higher sales of goods and services to other nations.
The export quota – the ratio of exports to GDP – was 47.9 percent in 2023. Many family businesses have sought and found their fortune in the export markets. Overall, exports of goods increased by 5.2 percent annually between 1980 and 2023.
And if domestic energy prices, bureaucracy and the high costs of the welfare state make it impossible for a company like BASF – the largest chemical company in the world, after all – to make a profit, then foreign countries are not a threat but a salvation. Or, to put it simply: today’s Germany is either global or not at all.
Conclusion: The Oslo Nobel Prize Committee would be well advised not to honor a lovable but ineffective personality again this year, for lack of an alternative. If you can’t help but honor a person as a principle, the inventor of the free trade theory, David Ricardo, is a good choice:
“No path to increasing national prosperity is so safe as the path of free trade.”
The British economist was clear that the pursuit of prosperity by nation states was beneficial to world peace:
“The pursuit of individual advantage is admirably combined with the general welfare of the whole.”