Commerce across borders is history’s greatest pacifier

Just how accurate is the cliche that we live in an ever-more globalised world? As technology allows more human activity to take place across borders; as businesses use new technologies to find customers wherever they live on the planet; and as international institutions, such as the World Trade Organisation, provide the political framework within which cross-border activity can take place, powerful forces are facilitating and driving globalisation.

With trade, investment and migration flows all trending upwards over the long term, the answer would appear to be that we are most certainly living in a world in which borders matter less and one in which a single (if richly diverse) international society and economy is evolving.

But is this island an exception? This year's Merriman summer school appositely asks whether the two jurisdictions on this Ireland are growing apart.

As one the school's organisers, Andy Pollak, noted in this newspaper last week, we in the South show ever less interest in affairs north of the Border. If that incuriousness is anything to go by, then we are unquestionably growing apart.

Nor is there much coming together to be observed within Northern Ireland. Scenes over the past week in Castlederg and Belfast have been more akin to the upheavals ongoing in Tunis and Cairo than the summer calm of other European cities.

While powerful forces are integrating the world, others are working in the opposite direction. None does so more than nationalism. It has been described, with good reason, as the most powerful force in the world.

While militaristic ultra-nationalism has declined markedly – globally, interstate conflict has been very rare by historical standards over the past 70 years – nationalism remains the driving force in building up new barriers to cross-border interaction and buttressing existing ones.

Nationalist passions create tensions across the world: from east Asia to the Middle East and even here in supposedly "post-nationalist" Europe – in recent weeks the status of Gibraltar has flared up yet again as a source of contention between Britain and Spain.

Since 1950, the success of secessionist movements has led to the proliferation of states, and therefore borders, across the planet. That fragmentation process has not yet run its course, even in western Europe, where, for instance, regions within both Belgium and Spain seek secession and statehood.

Nationalism as threat
Closer to home again, nationalism is working against integration and in favour of disintegration. Many Scots want to pull out of the UK, while many Britons want to pull out of the EU.

If Britain does exit the EU it will almost certainly create new barriers between Ireland and Britain. Among the most serious implications for this island would be a more prominent border, and, among the most serious implications of that would be less prosperity owing to additional commercial barriers that would likely be erected. But even less cross-Border trade and investment than already exists would have other negative effects.

Commerce is a great, if not the great pacifying force in human affairs. Trade fosters interdependency, thereby changing the interests of individuals and states. Violence works against those interests because it destroys many things, including wealth.

And just in case anyone was in any doubt about how conflict disrupts business, just ask Belfast’s hard-pressed merchants how the flags dispute has made already difficult trading conditions harder still.

But commercial interaction does not merely reduce the propensity to violence out of self-interest – it brings people together and creates bonds.

On a visit to the floor of the London Stock Exchange, Voltaire exclaimed, as he looked at the 18th-century cosmopolitan throng trading together: "Christian, Jew and Muslim, the bankrupt is the only infidel." It was ever thus. People from different races and cultures working together – in companies and along trade routes and supply chains – form personal bonds, as they have done since time immemorial.

This column has a number of times highlighted the poor entrepreneurial record of the Irish economy, which is as true north of the Border as it is on the southern side. Public sector employment in Northern Ireland is the highest of any region in the UK and about one-third higher than in the Republic.

The dependence on taxes from the neighbouring island is extraordinary – if the region were an independent state it would be running an annual budget deficit of about 50 per cent of gross domestic product (and bigger still if the costs of bank bailouts were included). More indigenous commercial enterprise – in both parts of the island and across the Border that divides it – will not only bring greater prosperity, it will bring our communities and societies closer together.

This column is an abridged version of a presentation to be given at the Merriman Summer School today