The diplomacy of economics

By Daniel Stratford

Diplomacy and statecraft are some of the most intriguing, if not the most aggravating, aspects of contemporary politics. They afford one the opportunity to step outside of the conventional hothouse of domestic politics, whose excesses overwhelm, at times, even the humble author of this column. Instead, diplomacy affords both the tentative newcomer and the experienced strategist the chance to excel in a test of cunning, intrigue and strategic aptitude on a truly global scale. This is especially important in our age of instant communication.

However, diplomacy and the advancement of one’s national interest therein, are more than just contentious negotiations between nation-states. Diplomacy often embodies other realms of international affairs, most notably in the case of armed conflict. However, there is another facet of diplomacy that is often overlooked, but has always played a crucial role in how the diplomatic game is played – that of economics.

Carl von Clausewitz, the Prussian officer and great military theorist, once famously asserted that, “War is not merely a political act, but also a political instrument, a continuation of political relations, a carrying out of the same by other means.” It is imperative to consider economics in the same vein, both historically and especially in our contemporary world of globalized trade. With the rise of the rapidly developing countries such as Brazil, Russia, India and China, the importance of economics as leverage in diplomacy and world affairs cannot be ignored.

In order to view the diplomatic stage in a truly comprehensive manner, one must appreciate the physical relation of economics with statecraft. The great empires of history, from Rome to Britain, not only emphasized prudent internal economic policies, but also encouraged trade and the opening of markets that would benefit their national interest.

History has proven that no nation can rise to the status of a great power without some degree of central economic guidance and external economic influence over its neighbors and adversaries. The early United States is a particularly prodigious example. Many schoolchildren are infused with the idea that George Washington and his administration were the epitome of human virtue, devoted solely to the moral and political development of the early United States. In fact, many of Washington’s legendary musings, especially from his inaugural address, were inclined to pragmatic foreign policy objectives.

Washington’s famous call for American neutrality in the continuing war between Britain and France was not merely to keep the infant United States unvisited by another war, but also to “bait and bleed” the British and French to weaken them both. This would ensure not only that the United States would be able to export to both nations and their allies despite their warlike state, but also that the American economy would be infused with much-needed capital and subject to growth, paving the way for it’s rise as a great power.

The Monroe Doctrine possessed philosophical underpinnings that students of economic realpolitik would readily recognize. Most Americans are taught that the doctrine was a noble anti-colonial design of James Monroe’s administration. The reality is much different. The author of the doctrine, then-Secretary of State John Quincy Adams, was seeking to ensure that the American economy could have readily available markets in the western hemisphere, fueling the growth of the new Republic.

Fast forward roughly two and a half centuries into the future, then one can see that the maxim of political influence via economic might is still alive and well. Already, we are seeing the rise of a bloc of nations who, through shrewd management of their economies, are rising to preeminence in world affairs. This bloc is comprised of the aforementioned BRIC nations, whose rising influence in the world is evidence of a multi-polar future. Although abundant evidence exists for each of these nations to vindicate the thesis of this piece, China is of particular interest.

It has asserted its economic might in a method similar to that of our Founding Fathers, realizing that economic concerns were inextricably intertwined with military and diplomatic matters. Cheap labor, a comparably undervalued currency, strong investments in infrastructure and adroit management of domestic production, are all factors that have contributed to China’s rise as an economic powerhouse, and, consequently, as a modern great power. That economic might can be readily translated into political might is made evident by the ability of the Chinese government to influence American domestic politics and ensure its continued export hegemony through the acquisition of vast reserves of American dollars.

The influx of foreign capital into China has contributed to the modernization of the Chinese military, with a new Chinese stealth fighter, the J-20, introduced upon a recent visit by Secretary of Defense, Robert Gates to China.

All of this makes evident the fact that economics is not just a matter of individual rights in an open global market, but a potent agent of foreign policy and an effective vehicle of national interest. The rise of the BRIC nations has made evident the fact that unfettered individualism may sound great on the local talk-radio show, but that such dogmatism will not afford the United States the edge it needs in a quickly-diversifying club of great powers. Rigid individualism or a mental separation of economics from politics did not elevate the BRICs to rising-power status. Neither did it build the United States into the great and prosperous Republic it is today.

Daniel Stratford is a Collegian columnist. He can be reached at [email protected]