Home / Articles / Banks, Not Tanks: Using Money as a Geopolitical Tool
In my last article, I noted that the tendency to define U.S. power as the ability to deploy military force was running up against clear limits, because “without the ability to instantaneously transport equipment and personnel from one area to another, the United States must either massively increase its defense and security expenditures to increase its presence in all theaters, trust that allies will finally meet the challenge and increase their own spending to fill in the gaps, or accept risks in certain areas.” Thus, my conclusion was the need for the United States to think in global terms and to prioritize the allocation of its military resources.
Such calls make some people nervous—that any sort of retrenchment will leave U.S. interests in other areas vulnerable and exposed. This thinking is reinforced by the belief that the only sign of a U.S. commitment is the use of the military instrument. Indeed, one of the tendencies in American national security policy over the last sixteen years has been increasing militarization of the U.S. response—and the shrinking of available options to an unpalatable binary choice between using force or doing nothing. This dilemma is intensified because, as Robert Blackwill and Jennifer Harris lament, “the United States too often reaches for the gun instead of the purse in its international conduct.” This is not just the conclusion of two “outsider” academics, but two distinguished public servants and national security professionals who have made the case for decreasing American reliance on military force as the premier way to influence international events from within administrations of both parties.
The United States has core vital interests in three broad regions of the world—the Euro-Atlantic, the Asia-Pacific and the greater Middle East—as well as the need to secure the Western Hemisphere from destabilization and to convert Africa from being an exporter of problems to a net contributor to global peace and prosperity. The military instrument is insufficient to achieve all of these tasks, yet, as they point out, the “United States instinctively debates the application of military instruments to address all of these complex challenges” while paying far less attention to the “use of economic instruments to accomplish geopolitical objectives.”
War by Other Means: Geoeconomics and Statecraft is their blueprint for how the United States national security apparatus can better wield the economic tools at its disposal. It is, in military parlance, about putting the big “E” in the DIME (Diplomatic, Informational, Military, Economic) equation back into balance with the other ways in which a great power projects power. Indeed, as Ambassador John Cloud, the Ruger professor of national security economics at the Naval War College, writing in these pages, noted, a “tremendous advantage” the United States enjoys around the world, whether in responding to the crisis in Ukraine or other geopolitical challenges, is “the strength of free-market economics.” Yet it seems odd that the United States—which has one of the world’s most lucrative markets, has vast reserves of capital for investment, controls the world’s reserve currency and has done a great deal to set the rules of the global business order—chooses not to use these powers much more effectively. It is even odder that the geoeconomic approach seems to have fallen out of favor in Washington at a time when rising and resurgent powers like China and Russia embrace it as their first choice to gain influence and check U.S. power.