LIBERTARIAN PAPERS VOL. 1, ART. NO. 10 (2009)


1

GLOBALIZATION AND PEACE:
A HAYEKIAN PERSPECTIVE
ADRIÁN OSVALDO RAVIER
*

“Para mí, los estados, son
producto de las fantasías de los
hombres. ¿Cómo explicar de otro
modo que al sur de una línea la
tierra cambie de nombre?”
—Jorge Luis Borges (1978)
1


Introduction
IN HIS Studies in Philosophy, Politics and Economics (1967, p. 168), Nobel
Prize laureate Friedrich A. von Hayek explains that “from the first
establishment of [trade] which served reciprocal but not common purposes, a
process has been going on for millennia which, by making rules of conduct
independent of the particular purposes of those concerned, made it possible

*
Adrián Osvaldo Ravier (a_ravier@hayek.org.ar) is an economist at the Friedrich A.
von Hayek Foundation in Argentina (www.hayek.org.ar). He obtained his Ph.D. in
Economics in the Rey Juan Carlos University from Madrid, Spain under professor Jesús
Huerta de Soto. This paper is translated (by the author) from Adrián Osvaldo Ravier, “La
globalización y la paz,” Revista de Análisis Institucional, No. 1 (Fundación Friedrich A. von
Hayek, March 2007), which garnered the first prize in the Hayek Essay Contest organized
by the Mont Pèlerin Society in July 2006.
CITE THIS ARTICLE AS: Adrián Osvaldo Ravier, “Globalization and Peace: A
Hayekian Perspective,” Libertarian Papers 1, 10 (2009). ONLINE AT: libertarianpapers.org.
THIS ARTICLE IS subject to a Creative Commons Attribution 3.0 License
(creativecommons.org/licenses).
1
“To me, States are a product of the fantasies of men. How else can it be explained
that south of a certain line the land changes its name?” Quoted in Martín Krause, “La
Filosofía Política de Jorge Luis Borges,” Atlas 1853 Foundation,
www.atlas.org.ar/cultura/pdf/krause.PDF.

2 LIBERTARIAN PAPERS 1, 10 (2009)
to extend these rules to ever wider circles of undetermined persons and
eventually might make possible a universal peaceful order of the world.”
Today, we can denominate this the process of globalization, understanding
as such the process that arises spontaneously in the market and acts by
developing a progressive international division of labour, eliminating
restrictions on individual liberties, reducing transportation and
communication costs, and increasingly integrating the individuals that
compose the “great society.”
The purpose of the present essay is to attempt to deepen our
understanding of this Hayekian thesis and develop an explanation of why the
said process could lead to world peace.
To be consistent with Hayek’s works, we must conduct a
multidisciplinary analysis of the process under consideration; analysis which
must necessarily include a historical reference, an economic study, a legal
approach, and finally the consideration of its cultural implications.
It is not unimportant to point out that this essay is far from exhausting
the subject at hand. On the contrary, our intention is to merely introduce and
explore certain aspects that we understand should be considered in the
course of a complete investigation of the topic.
Origin, Development, and Evolution of Globalization
Hayek was keen on heading his theoretical reflections with brief
historiographical articles on the specific subject he proposed to broach. In
this particular essay we will try to duplicate his methodology, which thus
forces us to retreat several centuries in history and consider the origin of
commerce and its evolution towards increasing and progressive
specialization.
The process of globalization is not a new phenomenon, yet there is
little agreement amongst historians and economists as to its origin. Richard
Ebeling (2002), for example, describes globalization as a process that “has
been developing with increasing intensity for more than 200 years.”
However, we do not find globalization’s origin during the last years of the
18
th
century; nor do we find it in the 16
th
century, when the European powers
discovered the “New World.” Despite the fact that since the Industrial
Revolution, technological innovations allowed an acceleration of
globalization, the tendency towards trade, cooperation and—why not—
integration, has been germinating since Ancient times. It began operating
among tribes and clans, which crossed their own boundaries in search of

GLOBALIZATION AND PEACE: A HAYEKIAN PERSPECTIVE 3
exchange; and gradually extended to towns, cities, provinces, states and
empires.
This means we must retreat even further and analyze the origin of
commerce, where we may find a more accurate understanding of the birth of
the process of globalization.
We observe in Hayek’s The Fatal Conceit (1988) a clear description of the
origin and evolution of trade through a series of historical, archaeological and
anthropological works. Leakley (1981, p. 212), for example, states that “trade
is older than agriculture or any other sort of regular production.” Herskovits
(1948) points out that “in Europe there is evidence of trade over very great
distances even in the Palaeolithic age, at least 30,000 years ago.”
Hayek’s investigations show that eight thousand years ago, Catal Hüyük
in Antolia and Jericho in Palestine had become centers of trade between the
Black and the Red Seas, even before trade in pottery and metals had begun.
Both represented early examples of those “dramatic increases of population”
that are occasionally alluded to by the expression “cultural revolutions.”
According to archeological science, the great expansion of commercial
activity, giving ground to the subsequent might of classic civilization, took
place as early as the sixth, seventh and eighth centuries before Jesus Christ,
times so distant that historical documentation is limited.
This mercantile expansion seems to have given rise to a remarkable
population increase of the Greek and Phoenician commercial centers, which
competed with each other in the establishment of colonies until at the
beginning of the classical era all depended vitally on regular mercantile
activity.
Therefore one cannot doubt the existence of some degree of
commercial activity even in the most primitive stages of history, nor of its
decisive influence in the germination of vaster orders. However, Hayek
(1988) warns that such a process would only manage to progress amidst great
difficulties, and would doubtlessly mean the rupture of many tribal bonds.
Once an agreement was established regarding the convenience of respecting
plural property, certain unimaginable practices had yet to be tolerated so that
the communities would allow the exportation of certain articles coveted by
the community that would otherwise have been dedicated to the satisfaction
of certain local needs. This would be necessary to benefit the foreign peoples
and afford necessities only partially susceptible to identification on the part of
the tradesmen themselves—not to mention the population in general.
Thus commerce gave way to sedentary civilizations in new places,
which consequently enabled further specialization, a process that would

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finally culminate in demographical expansions. In this manner, Hayek (1988,
p. 40) explains that a chain reaction began: “the greater density of population,
leading to the discovery of opportunities for specialisation, or division of
labour, led to yet further increases of population and per capita income that
made possible another increase in the population. And so on.”
Despite the fact that globalization finds its seeds in this gradual
progress of exchange and commerce, there were certain periods in history in
which the process expanded rapidly. Perhaps the first acceleration can be
found in the 15
th
and 16
th
centuries, when several European powers
expanded their navies and roamed the Earth, conquering, colonizing and
developing commercial trade on an unprecedented scale. Richard Ebeling
(2002) explains:
But it was only following the great explorations of the 15th and 16th
centuries, with the opening of new trade routes from Europe to Africa
and Asia and the discovery of a “New World,” that the modern era of
international trade began its development. It has followed an
accelerating trajectory since the 18th century, as both the technical
means and the institutional order have permitted the potentials of global
commerce to expand dramatically.
This reference by Ebeling leads us to the second acceleration of the
process of globalization, framed by the first Industrial Revolution. As
Landes (1979, p. 15) states, the associated series of technological innovations
substituted human ability with machinery and traded animal and human force
for mechanical energy, bringing about the leap from manual to factory
production and giving way to the birth of Modern Economics. The
Industrial Revolution was initiated in England during the 18
th
century, from
where it expanded towards Continental Europe and a few other areas,
transforming in the course of less than two generations the life of Western
man, as well as the nature of his society and of his relations with the rest of
the peoples of the world. In this manner, the Industrial Revolution initiated
an accumulative process of self-propelled technological advance whose
repercussions would be felt in all aspects of economic life.
The revolution in transport and communications, for example, afforded
an unprecedented impact in the international markets of capital and goods,
but also in the market of labour. Let us remember that sixty million
Europeans emigrated in the hundred years following 1820: three-fifths to the
United States, many others within Europe and a significant percentage to
Latin American countries, especially Argentina. The majority of European
immigrants sought an escape from poverty, and wages on the American
continent were relatively higher.

GLOBALIZATION AND PEACE: A HAYEKIAN PERSPECTIVE 5
The process of globalization then played a fundamental role in wage
convergence in different countries. Around the end of the 19
th
century, this
convergence took place when Europe, where wages were low and work was
labor-intensive, was forced to compete with the high purchasing power of
wages in the Americas, including the developing nations of Argentina and
Canada. Undoubtedly, the salary convergence between 1850 and 1914 was
due to the force of the opening of the economy, both commercial and
migratory.
As Dr. Avila (2004) points out, “internationalization was the rule.
Conferences were held to standardize almost everything, from weights and
measures to the post service. The adoption of the gold standard was the
expression of this process on a monetary level.”
What happened to that state of affairs? Again Jorge Avila (2004)
provides us with an answer: “That prosperous and cosmopolitan world was
destroyed by two events and one ideological change: World War I and the
Great Depression, and the rejection of the liberal doctrine that came as a
reaction to such events. World War I created a profound disappointment
regarding the democratic system and internationalism. The decade of the
1920s brought protectionism, inflationary spirals and devaluations. And the
Great Depression destroyed the confidence in capitalism and competition,
placing the State in the center of the economic scene.”
But we must add one more factor to the causes of this debacle: the
most prestigious universities from around the world embraced Marx’s
communism and Keynesian interventionism, substituting classical ideas and
the Austrian School of Economics itself, while revitalizing the fallacies of the
Mercantilist School. Liberal orthodoxy was replaced by Marxist-Keynesian
pragmatism.
Today we find ourselves amidst the full development of what many are
already calling the Third Industrial Revolution, which has again changed the
way of life of the so-called global village, in every sense. The speed of today’s
communications has radically altered human relations on all levels. The access
to knowledge and information becomes much faster and, even more
importantly, at a much lower cost. These advances notably reduce the cost of
many goods and services, increasing their mobility and versatility. They
facilitate computerized control of production and enable the creation of new
products, which flood the markets. More efficient communication, at a
cheaper price, along with new work tools, force us to modify the traditional
business organization, seeking flexibility in order to better adapt to change.
Indeed, as Hans Sennholz (2004) comments, the barriers to
international trade continue to crumble as globalization continues its advance.

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According to the World Trade Organization (WTO) the volume of trade is
increasing at an annual rate of more than six percent, and exceeding the five
trillion dollar barrier. Approximately 60,000 “transnational” companies, with
more than 500,000 foreign affiliates, are investing annually 400 billion dollars
in plants, equipment, and offices outside their national bases, some 150
billion dollars thereof in less-developed countries. But of course, not all
constitutes good news: Sennholz also points out that currently there are thirty
on-going military conflicts, of different scales and intensity; also, that not all
international trade barriers have been eliminated. Yet he states that
globalization (“the present-day slogan for addressing international affairs”)
has relaxed its control and awarded the private sector a fundamental role in
economic production.
Thus with this historical introduction to globalization, we may now
proceed towards the economic analysis of the process.
The Economic Implications of Globalization
In tune with the words of Sennholz, quoted above, Alberto Benegas
Lynch Jr. and Carlota Jackisch (2002, p. 126) explain that
the acceleration of globalization, understood as a technological
phenomenon especially in the fields of telecommunications, led to
significant transformations in the capital markets of the world,
particularly during the last decade of the 20
th
century. Therefore new
investment alternatives arose, such as the so-called “emerging markets,”
and the flexibility and speed of access and exit of the diverse financial
markets increased [...] Foreign trade, on the other hand, has not
managed to globalize to the same extent. Despite the moderation of the
exacerbated protectionism experienced between World War I and II, the
world is still far from the free trade standards that dominated most of
the 19
th
century. Conspiring against commercial globalization, we have
first of all a firmly rooted anti-liberal mentality which has plagued
international trade with military terms. Thus “exportation” becomes
“conquer of markets”; “importation” is viewed as “an invasion of products”; duty
increases are seen as “in retaliation” to similar increases previously sought
by the other country, etc.
In this way, social engineering is the goal of entirely reconstructing
society, without considering that these experiments necessarily have both
unwanted and unforeseeable consequences, which lead to the exercise of yet
more pressure upon the events in order to “straighten” society towards the
desired direction. As again Benegas Lynch and Carlota Jackisch (2003, p. 18)
affirm, “it is not rare that those who assume such a task do not hesitate to

GLOBALIZATION AND PEACE: A HAYEKIAN PERSPECTIVE 7
‘sacrifice a generation’—as was commonly heard in the Soviet Union—if the
distant ideal demanded it.”
Returning to Hayek, this “social engineering” is clearly “constructivist
rationalism,” which we can summarize according to the following points: a)
the belief that all institutions that benefit mankind have been in the past, and
must be in the future, created with a clear knowledge of the desired effects
they produce; b) that they must be approved and respected only as far as we
can demonstrate that the particular effects they produce in a particular
situation are preferred over the effects another arrangement could produce;
c) that we have the power to design our institutions so that, of all the possible
results, the one we prefer will indeed result; d) that reason must never turn to
“mechanical or automatic” tools when a conscious consideration of all
factors preferred a result different from the spontaneous process. According
to Hayek, from such form of rationalism or social constructivism derive all
modern forms of socialism and totalitarianism.
This is what Ludwig von Mises (1959, p. 27–28), in one of his six
conferences given in Buenos Aires, labeled as interventionism:
Interventionism signifies that government does not restrict its activities
to the conservation of order and security; it wants more; it interferes in
the market. . . . It does not limit itself to the protection of free individual
activity; it wants to interfere with prices, salary scales, interest rates,
profit margins. It purports to restrict the supremacy of the consumer,
arrogating his powers, or at least a part of them.
It is the same von Mises who in the sixth part of his Treatise on
Economics Human Action (1949, p. 716–861), dedicates almost one hundred
fifty pages to the study of “The Hampered Market Economy” under the
thesis that “any state intervention generates exactly the effects that were
proposed to be avoided by the intervention, and surcharged.”
Social engineering, deliberately created, was conceptualized by Gabriel
Zanotti (2002) as the “globalization of interventionism” which according to
his analysis presents the following facets:
First, we encounter the interference by taxation (Human Action, pp. 737–
42): “any tax on rent or capital is criticized as something that simply decreases
the existing capital rate and consequently diminishes real wages, harming
lower-income sectors.”
Then we have the restriction of production (Human Action, pp. 743–57):
“any state intervention regulating tariff is rejected as something that far from
increasing prices and employment, will significantly reduce them, in addition
to creating an economic system based on privilege.”

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Interference with the structure of prices (Human Action, pp. 758–99) is
described next. Apart from aggravating inflationary problems, it is peculiar
that Mises warns against the dramatic consequence of fixing the salary (one
of those prices) above its productivity, producing unemployment. That is
when he begins his criticism against union activity of the fascist type.
The following subject is the description of perhaps the most important
chapter for the present essay, and that is currency and credit manipulation (Human
Action, pp. 780–99): “state monopoly over currency and control of the
monetary supply necessarily imply inflation. Credit expansion implies an
artificial period of expansion followed by its inevitable effect: recession.”
Fifth, we find a critique regarding foreign exchange control and bilateral
exchange agreements (Human Action, pp. 800–803), as well as a clarification of the
negative consequences that follow the implementation of politics that today
we would frame under the title “living on our own.”
We then observe another chapter on confiscation and redistribution (Human
Action, pp. 804–11), predicting its obvious effect: “de-capitalization, added
poverty and underdevelopment.”
He concludes with a criticism towards syndicalism and corporativism
(Human Action, pp. 812–32), “that fascist bond between the labour unions
and the state that leads to ample and devastating unemployment, followed by
a critique regarding bellical mentality as an excuse for state intervention.”
The economic analysis thus presented, it is time to analyze the judicial
order that arises in parallel with the last acceleration of the process of
globalization.
Globalization and International Order
The latest acceleration of the globalization process has generated a new
international order, constituting an important challenge to the fatal conceit of
those who always wish to impose a social order. The various governments
cannot secure a way to control commerce through the internet, while often
discovering themselves outside of the legal institutional frameworks that the
parties draw according to their interests.
In the international contracts between two parties that operate in
different countries, the parties frequently agree upon the submission to a
certain jurisdiction, should any dispute eventually arise; this implies that the
parties, in spite of buying raw materials and producing and selling final
products within a certain national state, may not be tied to resolving its affairs
according to the legislation and jurisdiction of that same country, but of a
third.

GLOBALIZATION AND PEACE: A HAYEKIAN PERSPECTIVE 9
Many economists and lawyers would affirm the impossibility of
conceiving the provision of a voluntary “legal order” furnished by the parties
themselves; and yet, in the international arena this is precisely what happens.
The WTO is intent on coordinating negotiations to reduce trade
barriers, but there is no such thing as a “Universal Court” before which one
might demand the fulfillment of signed contracts. Without it, how is it that
these exchanges are not only possible, but also generally satisfied?
The importance of “public enforcement” in international trade is very
small. Nevertheless the Austrian School, through Hayek and his followers,
provides a few answers to the afore-stated questions. Let us keep in mind
that when potential profit from exchange can be expected, individuals will
search for the means to overcome the obstacles encountered along the road.
This is the reason for the surge of private international arbitrage, private
international law or Lex Mercatoria, and a series of important customs and
traditions that punish tradesmen that do not fulfill their promised obligations.
It is these long-standing, evolving institutions—and not governments—that
are mostly responsible for the great acceleration of the process of
globalization that is currently underway.
Let us take, for example, the case of private international arbitrage:
today most legal controversies derived from international contracts are not
settled by the application of public enforcement, but rather on the basis of
this system of arbitrage. In this respect, Julian Lew (1978, p. 589), in a
specialized empirical study of the matter, states that around 80 percent of
disputes regarding foreign trade contracts are solved by way of private
international arbitrage, adding that this percentage will continue to increase as
time goes by.
This has led, from 1990 onward, to the inclusion of private
international arbitrage clauses in as much as 90 percent of international
contracts, in order to eventually avoid judicial litigation.
Private arbitrage is certainly an option within legal literature, and
presents numerous advantages in comparison with public enforcement.
Consider: to begin with, the parties can count on the possibility of selecting
the arbitrator, which implies that they have the opportunity of choosing an
arbiter specially suited for the decision of the dispute. In turn, this brings
about many other benefits, since the arbitrage can be obtained much sooner,
and usually with lower litigation costs; and this is frequently due to the fact
that the parties must present less information than if they had to present their
case before a judge unversed in the matter at stake. Also, it must be noted
that rivalries under a context of private arbitrage tend to be lessened, thus
usually the parties can and will continue to do business together.

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On the other hand, doubts may arise as far as the punishment of the
defeated party: who guarantees he will accept the arbiters ruling? Experience
proves that cases where enforcement must be brought about are minimal.
Böckstiegal (1984), for example, explains that “these arguments tend to
overstate the problem. All investigations on the practice of international
arbitrage show that the vast majority of cases are decided and fulfilled
without the need of enforcement.”
It must also be taken into account that, as David Charny (1990, p. 412)
points out, the parties generally decide to submit to the arbiter’s ruling of the
case because of the non-legal sanctions this decision entails. In this sense
there exists extensive literature on private incentives or motivators, such as
reputation. An example of this may be seen in the aforementioned case of two
parties wishing to continue their business together once their present dispute
is settled; which implies that both are willing to accept the decision derived
from the arbitrage.
It is also important to emphasize that this does not constitute a
problem at all, inasmuch as the submission to private international arbitrage
does not suggest the replacement of the traditional court judge. The plaintiff
can always recur to government enforcement if he wished to secure a
penalization, although of course he will usually have to recur to the
defendant’s jurisdiction. Hence private arbitrage, despite being the most
widely spread and most frequently chosen system for the resolution of
international conflicts relating to commerce, becomes a complement of
public enforcement, but not its substitute.
In this manner, the process of globalization gives birth to private
international law, which allows its qualification as a predominantly
polycentric system of customs, created by commerce among communities
through negotiation, contracting and conflict resolution processes.
Negotiation (often through a mediator) is the chief method for conflict
resolution, however when a third party is needed to impose a solution, the
parties almost invariably submit to a private international arbiter. This “law of
customs” and the solution of disputes through arbitrage emerge
spontaneously, when necessary, and inflict private measures. Enforcement is
hardly needed and rarely utilized, owing to the ample benefits of arbitrage
and the application of a set of specific rules.
Cultural Implications of the Process of Globalization
Canadian professor Herbert Marshall McLuhan, in his book The
Gutenberg Galaxy: The Making of Typographic Man (1962), describes how
electronic mass media collapse space and time barriers in human

GLOBALIZATION AND PEACE: A HAYEKIAN PERSPECTIVE 11
communication, enabling people to interact and live on a globe scale. He
coined the expression “global village” as a way of illustrating how electronics
convert vast spaces into reduced regions (“virtual reality,” later systematized
by Howard Rheingold). The revolution in communications has notably
contributed to tighten relationships between people of diverse places.
The process of globalization we describe no doubt has strong
implications regarding the societies in which it is introduced. Mises (1959, p.
11), in one of his conferences given in Buenos Aires, observed the difficulties
that the English society endured during the Industrial Revolution: “The
industrial system evolved in constant battle against innumerable obstacles. It
had to overcome popular prejudices, established customs, and restrictive legal
norms and regulations.”
Yet the English society, as well as all those who embraced the progress
that the adaptation of the Industrial Revolution implied, emerged
strengthened from the said acceleration of the process of globalization.
Living standards gave an undreamed-of leap. Hayek explains (1988, p. 17):
Although cultural evolution, and the civilisation that it created, brought
differentiation, individualisation, increasing wealth, and great expansion
to mankind, its gradual advent has been far from smooth. We have not
shred our heritage from the face-to-face troop, nor have these instincts
either “adjusted” fully to our relatively new extended order or been
rendered harmless by it.
But, what implications does the process of globalization have regarding
culture? Etymologically, explains Benegas Lynch (1994, p. 6),
the expression “culture” derives from “to be cultivated.” The fertility of
human efforts towards being cultivated, that is, to reduce his ignorance,
is in direct proportion to the possibility of contrasting his knowledge
with others. It is only possible to incorporate fragments of fertile earth,
in the sea of ignorance in which we debate, as far as there is room for
open discussion. Much oxygen is required: many wide-open doors and
windows. Culture does not belong to a certain latitude or other, it is the
result of innumerable individual contributions within a context of an
unending evolutionary process. The allusion to “national culture” is just
as off-key as referring to Asian mathematics or Dutch physics.
Accordingly, culture can never be ascribed to a specific place and much
less be attributed to a collective being. The Nation does not think, nor does it
create, reason, or produce anything. It is specific individuals who contribute
by adding particles of knowledge, in a galling road sown with refutations and
corrections that enrich the original contributions.

12 LIBERTARIAN PAPERS 1, 10 (2009)
In every city in which it operates, the process of globalization creates a
course of action similar to that of Vienna, in the days of Mises’s youth, from
which results an extended order that knows no boundaries. William Warren Bartley
III (1989) illustrates:
Again we return to Hayek’s expression, “extended order.” This idea has
an extraordinary force, as does Hayek’s explanation of the way order
extends itself through diverse types of competition, especially
competition regarding knowledge, which in its turn includes the
competition amongst the traditions and institutions that derive from
that knowledge. In this competition, information, traditions and
institutions that adapt to reality are evolutionarily chosen. This extended
order has no boundaries.
Hence culture does not recognize any geographical location; it is by its
very nature cosmopolitan. Nationalism, by contrast, seeks to establish, in the
words of Alberto Benegas Lynch Jr. a “fenced culture” that must be
preserved from the contamination that the contributions generated outside
the nation’s borders would provoke. “The local” is always a value, and “the
foreign” a disvalue, with which culture is destroyed and ultimately
transformed into a kind of troglodyte narcissism that resembles the tribal
more than the cultivated spirit which is necessarily cosmopolitan.
Of course, affection towards the place of one’s birth, of one’s very life,
as well as an attachment to good tradition, are only natural, and even healthy
for progress; but it is very different to declaim a telluric love that would
include only the territory of one country, dismissing any other places and
peoples which, objectively, are apt for greater affinity and closeness, if only
they were not to be discarded simply due to there situation on the other side
of an always artificial political border.
Ultimately, nationalism is not natural, but rather the fruit of social
engineering, imposed by force. There is probably nothing more unnatural
than the delimitation of boundaries, resulting from agreements between
belligerent parties, battles and conquests.
Jorge Luis Borges (1978), one of the greatest writers ever, once
explained: “To me, States are a product of the fantasies of men. How else can
it be explained that south of a certain line the land changes its name?”
Final Reflections
The study we undertook regarding the process of globalization has
clearly shown that the world has tended towards a process of integration and
world peace. Let us review:

GLOBALIZATION AND PEACE: A HAYEKIAN PERSPECTIVE 13
1) In a historiographical sense, we have observed that the birth of the
process of globalization—just as language, commerce, division of work,
money, price systems, law and all the other institutions that Hayek has
investigated throughout his works—is found in human will, but never in
human design. Nobody sought to deliberately create such a process, with the
aforesaid characteristics. Rather, the process originated spontaneously, from
the interaction of individuals in society, seeking to satisfy their own in
individual interests. In the words of Hayek (1988, p. 44):
The more one learns about economic history, the more misleading then
seems the belief that the achievement of a highly organised state
constituted the culmination of the early development of civilisation. The
role played by governments is greatly exaggerated in historial accounts
because we necessarily know so much more about what organised
government did than about what the spontaneous coordination of
individual efforts accomplished.
… Governments have more often hindered than initiated the
development of long-distance trade. Those that gave greater
independence and security to individuals engaged in trading benefited
from the increased information and larger population that resulted.
2) Under the perspective of an economic analysis, as Erich Weede (2004)
explains, “capitalism and economic liberty promote peace.” Why? Because as
Hayek has explained in numerous works, as far as the market process is
allowed to operate freely, it will coordinate the use of resources in the most
efficient way, generating wealth and undermining poverty. This is how free
trade through its voluntary exchanges establishes peace as a way of life,
leaving the use of force on the margins of social relations. In other words, we
must admit that Aristotle, Saint Thomas and even Marx himself, were wrong
in stating that exchange is a zero-sum game, in which if one party benefits,
the other necessarily loses. Voluntary exchange is a positive-sum game. This
is the “magic” of liberalism.
On the other hand, social engineering tends to limit these voluntary
exchanges and with them, pacific agreements. On the basis of the concept of
state interventionism we have introduced earlier, we must understand that
any intent of global planning would, paradoxically, disorganize the system, by
unarticulating a key ingredient given in any spontaneous order: “the price
system” or, in other words, the information system through which the
disperse knowledge is synthesized.
As Hayek (1988, p. 43) affirms, the fact
that the human race eventually was able to occupy most of the earth as
densely as it has done, enabling it to maintain large numbers even in
regions where hardly any necessities of life can be produced locally, is

14 LIBERTARIAN PAPERS 1, 10 (2009)
the result of mankind’s having learnt, like a single colossal body
stretching itself, to extend to the remotest corners and pluck from each
area different ingredients needed to nourish the whole.
This is the achievement of the process of globalization, in the economic
sense of the term.
3) From the viewpoint of international order, we have observed that as far
as the process of globalization is promoted, disputes tend to resolve more
and more without needing public enforcement, and increasingly through private
international arbitrage. Businessmen have come to realize that the only way of
survival in this dynamic, versatile, changing world is through the creation of
an image of respectability and strength. Fraud will doubtlessly continue to
exist, but with a tendency towards extinction. It is increasingly notorious that
those companies that use fraud as a means for generating wealth are rapidly
eliminated from the market.
4) Finally, from an ethical-cultural point of view we have demonstrated
that the process of globalization generates a cosmopolitan environment. As
was aforementioned, the term “culture” etymologically derives from “to be
cultivated,” this requires an “open discussion,” “much oxygen,” “wide-open
doors and windows,” and, fundamentally, “open borders.”
Nationalism, on the contrary, proposes exactly the opposite. Those
who embrace the patriotic values and profess a telluric love for their country
and their “fenced culture” move within Plato’s cave, where everything is
dark, though familiar.
Globalization comes forth with a message for new hope. The process
of globalization creates a cosmopolitan society, in which there are no
differences of race, religion, ethnics or any such thing. Each society is
enriched (not only economically) by its interrelations with other societies.
We will never be able to say that a society is free, that the process of
globalization is operating in the peak of its splendor, as long as borders are
not open, as long as social and commercial relations are limited by politics, as
long as migratory movements are checked.
Perhaps these last points are what give the most strength to the
“cultural and cosmopolitan globalization” we study here. Migratory
movements ultimately mobilize knowledge, introduce additional
modifications to our shared history and enrich culture. This is the only path
that can lead us to development and world peace.

GLOBALIZATION AND PEACE: A HAYEKIAN PERSPECTIVE 15


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