Trade and Globalization Curb Nationalism, Ethnocentrism, and Prejudice, Walker Wright Argues

        More insights about trade from Walker Wright, author of the forthcoming book In Trade We Trust: How Commerce Makes Us More Social.

     Despite what he calls a growing populist backlash against globalization and international trade as well as Trump’s obsession with tariffs, there are very real benefits to trade and globalization. He notes:

“Many critics portray international trade as an example of “foreign intrusions on national sovereignty.”

     He first cites Milton Friedman and his book, Capitalism and Freedom, where he leans on the work of Nobel Prize-winning economist Gary Becker. Friedman suggested that discrimination is monopolistic and that there is less of it where there is higher freedom of competition.

     He cites a Brookings Institution survey that shows that people with the most nationalistic and ethnocentric attitudes tend to distrust trade and globalization the most, and vice versa.

     He cites a study by political scientists Edward Mansfield and Diana Mutz that concludes that people with nationalistic and ethnocentric attitudes tend to not like outsourcing and vice versa. This is fairly obvious, and the graph below reflects that it is indeed the case.

     He cites a long-term (1977-2010) study by Northwestern University’s James Lindgren, who concluded:

“Those who support capitalism and freer markets and oppose greater income redistribution tend to be . . . less traditionally racist” and “less intolerant of unpopular groups.”

     That is an interesting conclusion but does not seem to accord with anti-capitalists who like to equate capitalism with racism and colonialism, and who often see capitalists as oppressors rather than as liberators. The data suggests that capitalism is far more liberating than oppressive. He cites other studies as well that equate capitalism and free markets with greater tolerance.

     He cites several studies by Niclas Berggren and Therese Nilsson that investigated the relationship between tolerance, economic freedom, and globalization.

“The evidence they gathered suggests a causal relationship between the level of economic globalization and the willingness of parents to teach their children tolerance.”

     The graph below shows one of those studies, and the results are clear: market societies are more tolerant.

     The graph below from one of their studies shows that where economic freedom is deemed greater, racial tolerance is also greater.

     He cites another study by researchers at St. Olaf College, Stanford University, and George Mason University, who concluded that we tend to have more favorable views of people and have more cordial ties with people from countries we do business with.

     He cites other studies and experiments that also conclude that greater economic cooperation leads to greater tolerance of ethnic minorities. He also suggests that protectionism promotes economic isolationism and can make intolerance more popular as well.

“Protectionist restrictions can exacerbate prejudicial attitudes. As the late economist Walter Williams explained, anti-competitive regulation “lowers the private cost of discriminating against the racially less-preferred person.” But when there is money to be made, trading only with groups who look or think like you doesn’t seem so important. And the more you trade with different groups, the more you realize that maybe, just maybe, they aren’t as bad as you thought.”

     He cites a study in Eurasia which showed that where trade is higher, intergroup marriage rates are higher, which is certainly a proxy for greater tolerance. He also notes that in the past, when new forms of travel, like railroads in the 19th-century U.S., became prevalent, there was greater extra-community marriage.

     He notes that the media also plays a role in promoting or opposing tolerance. Below, he explains that in the context of the 19th-century U.S., as more people traveled and moved to areas where market integration was high, tolerance increased and people began to take part in the wider American society rather than just the local society.

“Other signs of tolerance and trust became apparent: Newspapers began to adopt language that reflected generalized trust. Parents began to give children nationally popular names rather than locally distinctive ones, implying a social circle that had extended beyond the local community. But one of the strongest findings was the increase in religious diversity: A 1 percent increase in market access raised religious diversity by 0.27 standard deviation, indicating a greater tolerance for religious identity and practice. Perhaps most striking, families who moved to these more market-integrated areas adapted quickly, especially those working in commerce-intensive industries such as agriculture, manufacturing, wholesale, retail, and transportation.”

     Regular commercial contact makes people less suspicious of outsiders. Thus, trade, in a way, teaches and fosters tolerance.

“By commerce we enlarge our acquaintance with the terraqueous globe and its inhabitants, which tends to greatly expand the mind, and to cure us of many hurtful prejudices. . . . No person can taste the sweets of commerce, which absolutely depends upon a free and undisturbed intercourse of different and remote nations, but must grow fond of peace, in which alone the advantages he enjoys can be had.”

 

References:

 

How Open Economies Lead to Open Minds: Trade undermines bigotry and rewards toleration. Walker Wright. Human Progress. April 7, 2026. How Open Economies Lead to Open Minds - Human Progress