It really tells the story of the rise of the China Development Bank CDB , one of a handful of massive state-owned policy banks in China.
It has managed to strong-arm other countries into changing their constitutions to ensure China gets paid back, in the case of Venezuela. In this way, CDB is a proxy for the uneven trade relationship that the US and China have, and the ways in which that surplus gets recycled into Chinese state-led foreign investment. It does seem to tie back with our first novel in the US-China economic dance over the past twenty-plus years. Exactly right.
It also gives you a sense of how what China is doing abroad ties directly back to the makeup of its domestic economy. Forsythe and Sanderson do this beautifully. Are there costs associated with having a development bank thirty times larger than the World Bank? Sure, and we never promise in War By Other Means that geoeconomic tools are cost free. Of course these tools cost something. But the point is that so, too, does every other instrument of statecraft, especially, I would argue, military instruments. Effectiveness, of course, depends on what your aim is. Or, to put it another way: There are a lot of countries in Africa and Latin America that are hungry for investment.
China is obviously a country that makes no particular distinction between state and market, and is thoroughly comfortable flexing economic muscle to get what it wants.
The US, by contrast, was a country begun as an experiment in limited government. There are certain first principles that should absolutely trump how we, in the United States, engage in the world and the kinds of tools we use. One of my favourite examples is how Chinese leaders love to punctuate state visits around the world by ordering Chinese airlines to purchase a slew of, say, Embraer aircraft when they go to Brazil.
I cried happy tears when I discovered this book, realising that I had a kindred spirit out there who many years earlier had gotten to a lot of the answers I had only just begun coming around to. He really does a wonderful service in laying out the beginnings of a conceptual framework, even as he sticks true to his billing of remaining avowedly theoretical. Not really.
His big contribution here is to remind us that a lot of what we, certainly Americans, take for granted as the architecture of this rules-based economy — the tectonics of our global trading and finance system, things we imbue with a lot of internal logic and apolitical authority — actually are politics all the way down. This was intentional on the part of the US. When America built the liberal economic order it built after World War II, at that point, at least, the framers were quite clear-eyed about the choices they were making in the design of the WTO and IMF as expressions of US power and prerogative.
For the US, it was a project as much about ending the British Empire as anything else. We run the risk of loving these institutions a little too much. Seeing them with an apolitical authority all of their own — to be protected from unseemly incursions of US strategic interests — robs these institutions of the kind of permeability to politics that they need to stay relevant.http://sis.wt.com.mx/prego/user/thoughts-to-inspire.php
Geo-economics and Power Politics in the 21st Century
Witness the disinvestment that you see from Washington in these institutions. How long has it taken to pass IMF quota reform? How long to decide on the fates of Opic and Ex-Im? Generally, it has taken world wars to reshape international economic institutions.
Would you and Grewal agree we are stuck with the status quo? Should we be fighting for a new reimagining? My guess is that David and I would both want to see that reimagining. For me, that crystallizes just how much politics and self-interest is baked into this system we imbue with this Rawlsian, blind order. As it should be. History has not looked kindly on attempts to design institutions based on much more than state interests and underlying expressions of power.
If the US were to reimagine these things and get back to the scale of ambition that existed in , we could do so in ways that served our interests, as well as those of other nations interested in being constructive partners. In his Networked Power , David also reminds us that Adam Smith was quite comfortable subjugating economic tools to the needs of state power and making economics into a tool to defend and promote national interests.
In some ways, the problem with economics is that it has become the exclusive province of economists. While early liberals like Adam Smith and Richard Cobden understood that what was advantageous from an economic perspective might not be so from a geopolitical one, this seems to be a not-small nuance that neoliberal economics—at least in its current form—has largely lost sight of. Our last book is certainly not written by one. Out just this year, Hochschild is a wonderful storyteller and first-rate journalist. A lot of the narrative accounts of the civil war come from Hemingway and Orwell.
What Adam is doing is stepping behind a lot of the familiar tones the US feels comfortable with and showing how divided America was. He tells a somewhat untold story of the involvement of US corporations.
Trump’s Trade War: US Geoeconomics from Multi- to Unilateralism
A lot of the current focus, and my work, has looked at how ostensibly commercial entities from Russia and China are being used as conduits for projecting state power and accomplishing political aims. In fact, during the Spanish civil war, the same was true for US corporations. He tells a great story of Texaco.
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He also allowed Texaco vessels to convey espionage and actual intelligence that it seems was quite meaningful to the course of that war. All of which is to say, with a long enough memory, our hands are not entirely clean: at many points in history, US economic might—even as expressed by private actors—has sought its fair share of geopolitical ends, taking to some fairly unsavory tactics and characters in the process.
Do you want to talk a bit about that arc? The US is schizophrenic in our relationship to geoeconomics. We have a bit of collective amnesia on how comfortable we used to be in exercising geoeconomic power—right up until roughly Vietnam. You do see a certain formalisation that comes about with World War I.
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Yet, as soon as we joined the war, Washington was not only enforcing these embargoes very enthusiastically, but pushing them further — and even threatening Scandinavian countries for asserting the same kind of neutral trading rights that we had been espousing right up until we joined the war. With the shift from geopolitics to geoeconomics the focus is no longer the Heartland or the Rimland, or any coherent geographical region, but the set of all geographical locations containing economically-important natural resources, what we shall call the Nareland Natural Resource Lands.
This new logic of dispersed geographical locations marks the shift from geopolitics to geoeconomics. The centre stage has been taken over by the private-sector organization, the corporation. This means that power has been transferred from the public to the private sphere.