Economic decline doesn’t cause war---liberal interdependence checks

Subsequent liberal theorists have expressed their dissatisfaction with the presumption that the state is a unitary actor, arguing that one cannot understand the causal processes underpinning the large-N finding that trade usually leads to peace without disaggregating the nation-state itself. Hence, over the last decade a number of scholars have opened up the black box of the state to explore exactly how a liberal commercial peace could arise, and what that might mean regarding the conditions for peace overall. Beth Simmons (2003), for instance, suggests that we examine how interdependence creates groups within polities that have a vested interest in maintaining the status quo. Jonathan Kirshner (2007) asserts that open international financial flows makes bankers into a particular influential vested interest group, with bankers almost invariably wanting peace instead of war.5

Patrick McDonald (2007, 2009) has provided the most developed argument for the importance of domestic vested interests. He seeks to show that it is only a specific type of trading state that tends to have lower rates of militarized conflict—namely, the liberal capitalist one. McDonald maintains that capitalist states that operate through liberal economic institutions such as private property and competitive market structures are generally less aggressive. Exporters that have a vested interest in keeping peaceful trade going will operate as a powerful domestic group, exerting a strong check on any illiberal policy elites that happen to be running the state. Conversely, in more mercantilist states that do not respect private property or open trade, illiberal leaders with possibly aggressive intentions will have more autonomy to do nasty things, both because the export class is smaller and because higher tariffs supply them with more revenue to fund war.6