Hayek's observation sets up an important question for international relations theory and contemporary debates over American grand strategy. A wide range of liberal thought and contemporary research claims that the emergence of democratic institutions depends on the presence of such factors as a robust middle class, economic development, market-based exchange, and international institutions that expose domestic economic actors to global competition. All of these possibilities suggest that democracy may be rooted in the emergence of capitalism. If this is true, then the tendency for democratic states to avoid military conflict with each other may be caused not by electoral restraints, but by competitive markets and the predominance of private ownership instead.

On top of the theoretical implications posed by the possibility that the democratic peace is nested in a larger capitalist peace, the relative role of markets versus elections in constraining war also carries important implications for contemporary American grand strategy. The United States has a long history of promoting democracy abroad to facilitate its foreign-policy goals, including peace in the international system.