In their well-crafted and important new book, War by Other Means: Geoeconomics and Statecraft, Robert Blackwill and Jennifer Harris join this discussion orthogonally, arguing that the United States has altogether abandoned the economic dimension of grand strategy. Since the mid-1960s, Washington has been gripped by a debilitating neoliberal (or, neoclassical economic) dogma that works as an ideological firewall separating the operation of markets from the pursuit of international political objectives. As a result, America’s substantial and diversified economic resources have been woefully underutilized as tools of grand strategy. At the same time, the United States’ most formidable challengers (China, Russia, and Iran) are all effective practitioners of economic statecraft. To secure its national interest in the years to come, Washington must relearn how to employ economic resources in the service of its geopolitical objectives. To do otherwise would cede the contest to states whose interests and actions will continue to undermine American security and prosperity.

War by Other Means is structured around three main themes. In the first three chapters, Blackwill and Harris examine economic statecraft generally, defining “geoeconomics” as “the use of economic instruments to promote and defend national interests and to produce beneficial geopolitical results; and the effects of other nations’ economic actions on a country’s geopolitical goals.”[4] The authors argue that rising powers now turn first to economic statecraft because it effectively buttresses their geopolitical objectives while mitigating the risk of armed conflict. Unlike past eras, state-capitalist challengers to the prevailing liberal order have many more economic instruments at the ready. Due to the expansion of global markets and their structural transformations over time, economic factors now impinge substantially on states’ geopolitical choices. By way of example, the authors note that “the fate of the European Union—perhaps the West’s greatest foreign policy achievement of the twentieth century and the closest U.S. foreign policy partner—for several years rested at least as much in the hands of bond markets as in European political capitals.”[5] In sum, the current international system entails new economic and financial challenges and opportunities, offering states many powerful geoeconomic assets to employ against targets large and small.

...rising powers now turn first to economic statecraft because it effectively buttresses their geopolitical objectives while mitigating the risk of armed conflict.

Among the most insightful sections in these early chapters is Blackwill and Harris’s in-depth examination of the geoeconomic instruments available to states, including: trade policy, investment policy, economic sanctions, cyber, foreign aid, monetary policy, and energy and commodity policies. Not content merely to catalog these policy tools, the authors offer a valuable discussion of the interrelations among them—noting where synergies can be found and where tensions may lie. Most important is the authors’ argument pertaining to the sources of geoeconomic effectiveness. Blackwill and Harris maintain that effectiveness is in part a function of four “geoeconomic endowments”: the ability to control outbound investments, the particular features of domestic markets, the influence over commodity and energy flows, and the centrality of the state in the global financial system. Beyond these structural attributes are the contextual features that must factor into a state’s decision making process: the number and types of geoeconomic targets, the goals sought, and the selection of the proper economic tools that can deliver those goals.

China’s geoeconomic approach to statecraft is the second general theme taken up by Blackwill and Harris. The PRC has demonstrated remarkable capacities to employ explicit and implicit economic coercion to orient weaker states’ foreign policies in ways that support Beijing’s geopolitical objectives, to hedge against the actions of other regional competitors (namely, India and Russia), and to mount a challenge to American preeminence in the global economy. Blackwill and Harris maintain that China’s approach is a soft strategy of economic domination through its investment, natural resource extraction, development, and monetary policies. Not only does this approach pose a direct challenge to the U.S., but the indirect economic and security threats are substantial. China has “… locked up significant quantities of global energy resources, grown the coffers of dictators unfriendly to the United States; lent new momentum to domestic proponents of China’s own military buildup, and arguably have increased the odds of resource-based conflict.”[6] All of this while staying out of other states’ wars.

...the American foreign policy establishment has long since forgotten that the U.S. was once an avid and successful practitioner of geoeconomics.

Compounding these challenges to the U.S. are self-imposed constraints on America’s practice of geoeconomics, the subject of the book’s third theme. Despite their overall dissatisfaction with American geoeconomic performance, Blackwill and Harris’s account of America’s dismal track record can be read as cautiously optimistic. The U.S. is, after all, the largest of the world’s economies, centrally positioned in global markets, and of monumental importance, the beneficiary of technological and geological endowments that are spurring a revolution in its energy portfolio (their chapter “The Geoeconomics of North America’s Energy Revolution” is alone worth the book’s sticker price). Moreover, the United States has a rich history of successfully practicing geoeconomics. The purpose of the Marshall Plan, for example, was quintessentially geoeconomic. As George Kennan argued in 1947, American aid to the war-ravaged states in Western Europe should attempt to redress “the economic maladjustment which makes European Society vulnerable to exploitation by any and all totalitarian movements and which Russian communism is now exploiting.”[7] Despite this and many other examples from its past, Blackwill and Harris maintain that the American foreign policy establishment has long since forgotten that the U.S. was once an avid and successful practitioner of geoeconomics.