The Duck of Minerva

Economic Hegemony, Strategy, and Durable Peace: Part I of III

28 January 2022

This piece is the first of a three-part series grappling with the role of political economy in making a just, sustainable international order.

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hat’s America’s story for how economic policy relates to international security? I think for a long time the story was some version of the “big, dumb, beautiful dream of McDonald’s peace theory.” These days, I don’t think there is one. And while that’s not President Biden’s fault, it is his inheritance, and it hinders the task of formulating an economic strategy.

The two biggest thematic criticisms lodged against Biden’s foreign policy are that 1) it’s just unbelievably overmilitarized and 2) it lacks a meaningful economic component. I have a piece out in Foreign Policy addressing the latter point, the absence of an economic strategy, which is particularly glaring in US Asia policy.  

Critics may have different ideas about what kinds of economic policies would be better than the status quo, but the complaint that Biden is woefully deficient on international economic policy spans conservativescorporate liberals, and anti-imperial leftists. Outside of punitive sanctions, there is no economic statecraft orchestrating disparate policy decisions into some larger purpose aligned with the interests of the demos.  

This is a shame because, when harnessed well, “it’s the economy, stupid” can be the best means (and the only durable means) of addressing global insecurity.  Worried about fascism or the global far right? You’re going to need to do something about worker precarity, at home and abroad. Worried about climate induced instability, whether in the humanitarian or economic sense? You’re going to need to help developing economies with a just energy transition. Worried about China’s geopolitical ambitions? Then you shouldn’t use trade deals to increase capital mobility and should instead be prioritizing support for Global-South economies. Worried about the rise in global civil unrest?  Or want to be on the just side of racial justice? Then you better have a monetary policy that pushes full employment.

In examples like these, I can be so bold as to say what specifically ought to be done because I have a story, and it says durable inequalities are at the root of insecurity and the only remedies involve democratic political interventions to redistribute power and resources. That diagnosis foregrounds policy problems that maybe aren’t taken so seriously in mainstream foreign policy (like imbalances between the Global North and South), and it prescribes solutions to more mainstream problems (like China) that follow logically from the diagnosis but that are missing from the Beltway’s current intellectual malaise.

Maybe you have a different theory of how the economy relates to security than I do. Maybe you think capital is more important than workers, or that developing states shouldn’t be able to have economic sovereignty. Maybe you think the “capitalist peace” is legit and doesn’t introduce risks of major-power wars.  

If you believe those things, we might disagree but at least there’s something to evaluate; a conversation to be had about strategic alternatives rather than a grab bag of prescriptive ad hoc-ery. This is not to say that real-life decisions have to map back to a blueprint; that’s not how the policy world works. 

But analytically, it’s important you actually have a perspective that diagnoses problems, explains things, and on the basis of its explanations it prescribes policy. If you don’t, your “strategy” is likely to be nonsense, and its inner reasoning will be hidden from accountability. My story about how to make something like a just peace via economic statecraft lays the groundwork for what a US economic strategy should be. This is something that I don’t believe the Biden administration is even capable of doing (for reasons I gestured at here).  

I know it sounds like I’m harshing Biden’s groove, but it’s true. The White House will eventually issue some kind of glossy document with an “economic framework.” They will satisfy the task of having what they will describe as an economic strategy. The State Department’s Office of Policy Planning even has a couple people working economic policy. And the Biden administration is doing some good things on the global economic front (which I acknowledge).

But what is their perspective, their economic worldview? Are they consistent in their choices and priorities, or even in their operating assumptions? From what I know of administration staffing, almost everyone relevant to economic statecraft has either embraced the mantras of neoliberal globalization or are Keynesians doing the economic nationalism thing. Whatever the merits of those competing perspectives, they pull in fundamentally opposing ideological directions.  

More importantly, they’re approaches to political economy that are askew of (or culpable in) what I see as the problems of durable inequality at a global scale. I just fail to see how neoliberal globalization or neo-Keynesianism is a recipe for any version of a fair or just (and therefore durable) international order. And the going alternative of muddling through with a mishmash of the two is unlikely to be much better than either perspective alone.