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ABSTRACT
Scholars and practitioners of grand strategy agree that the use of military force should be supplemented by appropriate economic policies. However, strangely few accounts of economic complements to military grand strategies have been presented in recent discourse on US grand strategy. This paper takes a first step to fill this information gap. I first assess the role that could be played by economic measures under two types of grand strategies – one focusing on the balance of power and the other emphasising influence and order. Second, I introduce what I call ‘the influence-capability dilemma’ and discuss tradeoffs in adopting certain economic policies in order to help the US sustain pre-eminence in the international system. Third, I discuss how the US should address this dilemma of economic means in dealing with the rising China.
Notes
1 For the US use of economic tools in addressing security challengers, see David L. Asher, Victor D. Comras, and Patrick M. Cronin, Pressure: Coercive Economic Statecraft and US National Security (Washington: Center for New American Security 2011); Alan P. Dobson, US Economic Statecraft for Survival 1933–1991 (New York: Routledge 2002); Richard N. Haass (ed.), Economic Sanctions and American Diplomacy (New York: Council on Foreign Relations 1998); Richard N. Haass and Meghan L. O’Sullivan, Honey and Vinegar: Incentives, Sanctions, and Foreign Policy (Washington: Brookings Institute Press 2000).
2 For instance, see Robert J. Art, A Grand Strategy for America (Ithaca NY: Cornell UP 2003), 1; Richard K. Betts, American Force (New York: Columbia UP 2012), 24–28; John J. Mearsheimer, Tragedy of Great Power Politics (New York: W.W. Norton 2001), 386–92; Barry R. Posen, The Sources of Military Doctrine (Ithaca NY: Cornell UP 1984), 13; Barry R. Posen and Andrew L. Ross, ‘Competing Visions for US Grand Strategy’, International Security 21/3 (1996/97), 5.
3 For instance, see Robert D. Blackwell and Ashley J. Tellis, Revising US Grand Strategy toward China (Washington: Council on Foreign Relations 2015); Stephen G. Brooks, G. John Ikenberry, and William C. Wohlforth, ‘Don’t Come Home America: The Case against Retrenchment’, International Security 37/3 (2012/13), 7–51; Richard Fontaine and Kristin M. Lord (eds), America’s Path: Grand Strategy for the Next Administration (Washington: Center for New American Security 2012); Joseph S. Nye, Jr. ‘The Case for Deep Engagement’, Foreign Affairs 74/4 (1995), 90–102.
4 Ashton Carter, ‘Remarks on the Next Phase of the US Rebalance to the Asia–Pacific’, available from http://www.defense.gov/Speeches/Speech.aspx?SpeechID=1929.
5 David A. Baldwin, Economic Statecraft (Princeton NJ: Princeton UP 1985); Gary Clyde Hufbauer, Jeffrey J. Schott, Kimberly Ann Elliott, and Barbara Oegg, Economic Sanctions Reconsidered (Washington: Peterson Institute for International Economics 2007). A notable exception is Michael Mastanduno, Economic Containment (Ithaca NY: Cornell UP 1992), which focuses on the complementary role of economic manipulation within the context of military containment.
6 Christina L. Davis, ‘Linkage Diplomacy: Economic and Security Bargaining in the Anglo-Japanese Alliance, 1902–23’, International Security 33/3 (2008/09), 143–79; Steven E. Lobell, ‘Second Face of Security Strategies: Anglo-German and Anglo-Japanese Trade Concessions During the 1930s’, Security Studies 17/3 (2008), 438–67; Lars S. Skålnes, ‘Grand Strategy and Foreign Economic Policy’, World Politics 50/4 (1998), 582–616.
7 For this strategic goal, see the National Security Strategy reports, http://nssarchive.us/.
8 This definition of grand strategy builds on Brooks et al., ‘Don’t Come Home America’, 11.
9 For various definitions of grand strategy, see Colin Dueck, Reluctant Crusaders: Power, Culture, and Change in American Grand Strategy (Princeton NJ: Princeton UP 2006), 9–12; Steven E. Lobell, Jeffrey W. Taliaferro, and Norrin M. Ripsman, ‘Grand Strategy between the World Wars’, in Steven E. Lobell, Jeffrey W. Taliaferro, and Norrin M. Ripsman eds., The Challenge of Grand Strategy (Cambridge: Cambridge UP 2012), 14–16; Williamson Murray, ‘Thoughts on Grand Strategy’, in Williamson Murray, Richard Hart Sinnreich, and James James Lacey (eds), The Shaping of Grand Strategy (Cambridge: Cambridge UP 2011), 1–33.
10 For instance, see Art, A Grand Strategy for America; Betts, American Force; Brooks et al., ‘Don’t Come Home America’; Fontaine and Lord, America’s Path; Eugene Gholz, Daryl G. Press, and Harvey M. Sapolsky, ‘Come Home, America: The Strategy of Restraint in the Face of Temptation’, International Security 21/4 (1997), 5–48; Eugene Gholz, Daryl G. Press, and Benjamin Valentino, ‘Time to offshore our troops’, New York Times, 12 December 2006, available from http://www.nytimes.com/2006/12/12/opinion/12press.html?pagewanted=all&_r=0; Christopher Layne, ‘From Preponderance to Offshore Balancing’, International Security 22/1 (1997), 86–124; John J. Mearsheimer, ‘Imperial by Design’, National Interest 111 (January/February 2011), 16–34; Nye, ‘The Case for Deep Engagement’; Robert A. Pape, ‘It’s the occupation, stupid’, Foreign Policy, 18 October 2010, available from http://foreignpolicy.com/2010/10/18/its-the-occupation-stupid/; Barry R. Posen, Restraint: A New Foundation for U.S. Grand Strategy (Ithaca NY: Cornell UP 2014); Posen and Ross, ‘Competing Visions for US Grand Strategy’; Sebastian Rosato and John Schuessler, ‘A Realist Foreign Policy for the United States’, Perspectives on Politics 9/4 (2011), 803–19; Joshua Rovner and Caitlin Talmadge, ‘Hegemony, Force Posture, and the Provision of Public Goods’, Security Studies 23/3 (2014), 548–81; and Stephen M. Walt, Taming American Power: The Global Response to US Primacy (New York: W.W. Norton 2006).
11 For instance, see Blackwell and Tellis, Revising US Grand Strategy toward China; Brooks et al., ‘Don’t Come Home America’; G. John Ikenberry, ‘America’s Imperial Ambition’, Foreign Affairs 81/5 (2002), 44–60; Nye, ‘The Case for Deep Engagement’.
12 Art, A Grand Strategy for America; Betts, American Force; Posen and Ross, ‘Competing Visions for US Grand Strategy’.
13 For these two ways of thinking about power, see Bruce Russett and Harvey Starr, World Politics: The Menu for Choice (New York: Freeman 1989), chapter 6.
14 The strategies and their attributes described here are ideal-types. In actual implementation of its grand strategy, the US might adopt a mixture of these strategies.
15 For this definition of power, see Mearsheimer, The Tragedy of Great Power Politics, 57–60; Kenneth N. Waltz, Theory of International Politics (New York: McGraw Hill 1979), 131, 185–95; William C. Wohlforth, The Elusive Balance (Ithaca NY: Cornell UP 1993), 1–10.
16 There are some disagreements between offshore balancing and selective engagement on actual deployment of US forces. Selective engagement suggests that the US should maintain its military presence in the major regions as a precautionary measure. In contrast, offshore balancing suggests that the US should keep most of its forces over the horizon and deploy troops on foreign soil only when there is no one else who can counter a potential regional hegemon. For selective engagement, see Art, A Grand Strategy for America, chapters 6 and 7; Posen and Ross, ‘Competing Visions for US Grand Strategy’, 17–23. For offshore balancing, see Layne, ‘From Preponderance to Offshore Balancing’; Mearsheimer, Tragedy of Great Power Politics, 234–66.
17 Art, A Grand Strategy for America, 45–81; Stephen Van Evera, ‘Why Europe Matters, Why the Third World Doesn’t’, Journal of Strategic Studies 13/2 (1990), 1–51; Stephen M. Walt, ‘The Case for Finite Containment’, International Security 14/1 (1989), 5–49.
18 On regional hegemony, see Mearsheimer, Tragedy of Great Power Politics, 40–42.
19 Robert Gilpin, US Power and the Multinational Corporation (New York: Basic Books 1975), 35. Also see Paul Kennedy, The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000 (New York: Vintage Books 1989).
20 Robert Gilpin, ‘The Theory of Hegemonic War’, Journal of Interdisciplinary History 18/4 (1988), 591–613; John J. Mearsheimer, ‘The Gathering Storm: China’s Challenge to US Power in Asia’, Chinese Journal of International Politics 3/4 (2010), 381–96; Kenneth N. Waltz, ‘Structural Realism after the Cold War’, International Security 25/1 (2000), 32–39.
21 Waltz, Theory of International Politics, 131.
22 Edward Harllett Carr, The Twenty Years’ Crisis, 1919–1939 (New York: St Martin’s Press Citation1966), 108.
23 Mearsheimer, Tragedy of Great Power Politics, 46.
24 Ibid., 402.
25 Ashley J. Tellis, Janice Bially, Christopher Layne, and Melissa McPherson, Measuring National Power in the Postindustrial Age (Santa Monica CA: RAND 2000).
26 For instance, see Bureau of Industry and Security, ‘US Dual-Use Export Controls for China Need to Be Strengthened, Final Report’, No. IPE-17500, March 2006; Robert L. Paarlberg, ‘Knowledge as Power: Science, Military Dominance, and US Security’, International Security 29/1 (2004), 122–51.
27 Ian F. Fergusson and Paul K. Kerr, ‘The US Export Control System and the President’s Reform Initiative’, CRS Report to Congress, 14 July 2011.
28 Istvan Hont, ‘Free Trade and the Economic Limits to National Politics’, in John Dunn (ed.), The Economic Limits to Modern Politics (New York: Cambridge UP 1990), 42–43; Charles Tilly, Coercion, Capital, and European States (Cambridge MA: Blackwell 1990).
29 For an application of this logic, see Benn Steil and Robert E. Litan, Financial Statecraft (New Haven: Yale UP 2006).
30 Klaus Knorr, The War Potential of Nations (Princeton NJ: Princeton UP 1956), 199–201.
31 See Lisa L. Martin, Coercive Cooperation (Princeton NJ: Princeton UP 1992), 267. Also see Tor Egil Førland, ‘“Economic Warfare” and “Strategic Goods”’, Journal of Peace Research 28/2 (1991), 192.
32 For overview of mainstream trade theories, see Cletus Coughlin, ‘The Controversy over Free Trade’, Federal Reserve Bank of St. Louis Review 84/1 (2002), 1–22; Elhanan Helpman, ‘The Structure of Foreign Trade’, Journal of Economic Perspectives 13/2 (1999), 121–44; Paul R. Krugman, Maurice Obstfeld, and Marc J. Melitz, International Economics: Theory and Policy, 9th edn (New York: Addison-Wesley 2012).
33 Posen and Ross, ‘Competing Visions for US Grand Strategy’, 32–43.
34 Ibid.
35 For this definition of power, see David A. Baldwin, ‘Power Analysis and World Politics: New Trends versus Old Tendencies’, World Politics 31/2 (1979), 161–94; Robert Dahl, ‘The Concept of Power’, Behavioral Science 2/3 (1957), 202–03. There are several different definitions of power within this approach. Still, they can be distinguished from the materialist definition of power in viewing power as the ability to influence outcomes.
36 For liberal theorists’ definitions of power, see Robert O. Keohane, ‘Realism, Neorealism, and the Study of World Politics’, in Robert O. Keohane (ed.), Neorealism and Its Critics (New York: Columbia UP 1986), 11; Joseph S. Nye, Jr, Soft Power: The Means to Success in World Politics (New York: Public Affairs 2004).
37 Carr, The Twenty Years’ Crisis; Hans J. Morgenthau, Politics among Nations, 3rd edn (New York: Alfred A. Knopf 1965), 28–31.
38 Robert J. Art, ‘Selective Engagement in the Era of Austerity’, in Richard Fontaine and Kristin M. Lord (eds), America’s Path: Grand Strategy for the Next Administration (Washington: Center for New American Security 2012), 15–27.
39 G. John Ikenberry, After Victory: Institutions, Strategic Restraint, and the Rebuilding of Order after Major Wars (Princeton NJ: Princeton UP 2001); G. John Ikenberry, Liberal Leviathan: The Origins, Crisis, and Transformation of the American World Order (Princeton NJ: Princeton UP 2011).
40 Ikenberry, After Victory.
41 Lloyd Gruber, Ruling the World (Princeton NJ: Princeton UP 2000).
42 For instance, see Joseph S. Nye, The Paradox of American Power (New York: Oxford UP 2003).
43 See the National Security Strategy reports, http://nssarchive.us/.
44 Walt, Taming American Power, 29–61.
45 G. John Ikenberry, ‘Liberal Internationalism 3.0: America and the Dilemmas of Liberal World Order’, Perspectives on Politics 7/1 (2009), 71–87.
46 Brooks et al., ‘Don’t Come Home America’, 11; Posen and Ross, ‘Competing Visions for US Grand Strategy’, 23–32.
47 Brooks et al., ‘Don’t Come Home America’, 33–34, 39; Nye, ‘The Case for Deep Engagement’; Robert Kagan, The World America Made (New York: Knopf 2012).
48 On the US dominance in military technology, see Jonathan D. Caverley, ‘United States Hegemony and the New Economics of Defense’, Security Studies 16/4 (2007), 598–614.
49 Stephen G. Brooks and William C. Wohlforth. World Out of Balance: International Relations and the Challenge of American Primacy (Princeton NJ: Princeton UP 2008), 98–147.
50 ‘In Bush’s words: “join together in making China a normal trading partner”’, New York Times, 18 May 2000.
51 Mearsheimer, Tragedy of Great Power Politics, 402.
52 ‘Mearsheimer vs. Nye on the Rise of China’, http://thediplomat.com/2015/07/mearsheimer-vs-nye-on-the-rise-of-china/.
53 For assurance, see Thomas C. Schelling, Arms and Influence (New Haven: Yale UP 2008), 74.
54 Robert B. Zoellick, ‘Whither China: From Membership to Responsibility?’, http://2001-2009.state.gov/s/d/former/zoellick/rem/53682.htm.
55 Aaron L. Friedberg, A Contest for Supremacy (New York: W.W. Norton 2011), chapter 4. Also see Henry M. Paulson, ‘A Strategic Engagement’, Foreign Affairs 87/5 (2008), 59–77; Condoleezza Rice, ‘Promoting the National Interest’, Foreign Affairs 79/1 (2000), 45–62.
56 US Census, ‘Trade in Goods with China’, http://www.census.gov/foreign-trade/balance/c5700.html.
57 On the vulnerability problem, see Albert O. Hirschman, National Power and the Structure of Foreign Trade (Berkeley: University of California Press 1980); Waltz, Theory of International Politics, 134–34.
58 As Albert Hirschman suggests, bilateral economic exchanges provide larger overall economic benefits to a smaller economy. See Hirschman, National Power and the Structure of Foreign Trade.
59 Mearsheimer, Tragedy of Great Power Politics, 401–02.
60 Joseph M. Grieco, ‘Anarchy and the Limits of Cooperation’, International Organization 42/3 (1988), 485–507; Mearsheimer, Tragedy of Great Power Politics, 51–53; Waltz, Theory of International Politics, 104–07.
61 Grieco, ‘Anarchy and the Limits of Cooperation’, 499.
62 For instance, see Robert A. Pape, ‘Soft Balancing against the United States’, International Security 30/1 (2005), 7–45.
63 Different scholarly perspectives underlie two different scenarios on China’s relative economic growth vis-à-vis the US. The late developer advantage or the advantage of backwardness approach suggests the Chinese economy will surpass that of the US in the near future. In contrast, the first or early mover advantage perspective suggests that the US will maintain its lead. On the late developer advantage, see Alexander Gerschenkron, Economic Backwardness in Historical Perspective (Cambridge MA: Belknap Press 1962); Gene Grossman and Elhanan Helpman, Innovation and Growth in the Global Economy (Cambridge MA: MIT Press 1991); Robert Lucas, ‘On the Mechanics of Economic Development’, Journal of Monetary Economics 22/1 (1988), 3–42. On the first mover advantage, see Roger A. Kerin, P. Rajan Varadarajan, and Robert A. Peterson, ‘First-Mover Advantage: A Synthesis, Conceptual Framework, and Research Propositions’, Journal of Marketing 56/4 (1992), 33–52; Marvin B. Lieberman and David B. Montgomery, ‘First-Mover Advantages’, Strategic Management Journal 9/S1 (1988), 41–58; R. Preston McAfee, Hugo M. Mialon, and Michael A. Williams, ‘What Is a Barrier to Entry?’, American Economic Review 94/2 (2004), 461–65.
64 Christopher Layne, ‘This Time It’s Real: The End of Unipolarity and the Pax Americana’, International Studies Quarterly 56/1 (2012), 206.
65 For this argument, see Blackwell and Tellis, Revising US Grand Strategy toward China.
66 Mearsheimer, ‘The Gathering Storm’.
67 John J. Mearsheimer, ‘Reckless States and Realism’, International Relations 23/2 (2009), 244.
68 On the specific conditions for US economic restrictions against China, see Dong Jung Kim, ‘Cutting Off Your Nose? A Reigning Power’s Economic Response to a Military Challenger’, PhD Dissertation, University of Chicago, June 2015.
69 For instance, see Minxin Pei, China’s Trapped Transition (Cambridge MA: Harvard UP 2008); Susan L. Shirk, China: Fragile Superpower (New York: Oxford UP 2007).
70 Bob Davis, ‘IMF warns of slower China growth unless Beijing speeds up reforms’, Wall Street Journal, 30 July 2014, available from http://www.wsj.com/articles/imf-annual-report-warns-of-slower-china-growth-unless-beijing-speeds-up-economic-reforms-1406768402.
71 For this view, see Richard Cooper, ‘Is “Economic Power” a Useful and Operational Concept?’, http://scholar.harvard.edu/files/cooper/files/economic_power.pdf?m=1360039874.
72 Michael Beckley, ‘China’s Century? Why America’s Edge Will Endure’, International Security 36/3 (2011/12), 41–78; Carla Norrlof, America’s Global Advantage (New York: Cambridge UP 2010).
Additional information
Notes on contributors
Dong Jung Kim
D.J. Kim is an assistant professor of political science at Yale–NUS College in Singapore. Dr Kim’s research interests include balancing strategies, US security policy, power shifts, and the security–economy nexus in international politics. He received his PhD in political science from the University of Chicago and worked as a research fellow at the Belfer Center for Science and International Affairs at Harvard Kennedy School.