New Tools, Old Strategy
Innovative Economic Tools Do Not A Strategy Make
Author’s Note: When I set up this Substack, I intended to update it maybe once a week. But as the bard so aptly puts it, “the best laid schemes o’ mice an’ men gang aft agley.”[i] I set up this Substack in November, went on vacation with the family, and then spent two weeks managing a household full of toddlers and plague COVID. So please excuse the substantial delay in publishing this time around. With luck, this publication schedule will become more regular in the new year. -EA
On Friday, I was lucky enough to attend a talk at the Carnegie Endowment given by National Security Advisor Jake Sullivan. There were no real shocks to be found in it; Sullivan has given a few talks this autumn, introducing the new National Security Strategy and presenting the rationale behind the administration’s aggressive new export controls on semiconductors. This conversation had similar overtones to both, perhaps with a few more interesting nuances.
One surprise was that the framing of Sullivan’s remarks about US national security seemed a call back to the administration’s original mantra of ‘Foreign Policy for the Middle Class,’ a concept that notably vanished between the interim national security strategic guidance and the final publication of the national security strategy almost two years later. In contrast, Sullivan barely alluded to the administration’s more recent framework of a global struggle between democracies and revisionist autocracies framework. Certainly, that might just have been about sucking up to his audience. After all, Sullivan was part of a task force at Carnegie which produced a 2020 report on the ways policymakers can ensure that foreign policy better serves the interests of the middle class. Nonetheless, it was interesting to hear him emphasize repeatedly the notion that foreign policy needs to center the interests of working Americans, even as the administration’s own documents have largely rejected that framing.
There were a couple of other interesting nuggets from the event. It was notable that when asked the administration’s priorities for the next two years, the national security advisor chose to emphasize implementation of existing policies, implying that we’re not likely to see any bold new policies soon. Indeed, in reflecting on his remarks I was struck by how this administration looks in some ways quite like the Obama administration in foreign policy: very competent in day-to-day diplomacy and in weathering crises – the financial crisis, the rise of ISIS, or the war in Ukraine – but not particularly bold, and not necessarily seeking to turn the major crises with which they’ve been besieged into opportunities for new thinking about global affairs.
The withdrawal from Afghanistan – arguably the administration’s biggest foreign policy achievement – was determined by the previous administration, and big, splashy announcements like the AUKUS agreement have run into serious problems in practice.[ii] It’s perhaps not the best comparison, but one could think instead about the boldness inherent in Richard Nixon’s tenure. Faced with domestic turmoil and international crises, his administration made decisive choices: ending the war in Vietnam, abandoning the gold standard, seeking to reopen relations with communist China.
The one exception might be the administration’s use of economic statecraft. And it was highly notable the extent to which Jake Sullivan’s comments on Friday emphasized the growing salience of economics in the context of international security, from supply chain resilience to the energy transition and US sanctions and export controls as a tool of foreign policy. But even here, what was offered was not bold strategy, but bold policy tools, a trend that I think characterizes tracks the Biden administration’s foreign policy to this point. In a nutshell: this administration is using powerful, innovative new tools of economic statecraft in pursuit of a national security agenda aimed at preserving the foreign policy status quo.
Bear with me here.
We’ve certainly seen a lot of significant geopolitical change over the last few years, whether it’s the war in Ukraine or Xi Jinping’s appointment to an unprecedented third term as General Secretary of the Chinese Communist Party. Policymakers everywhere are talking about change; the German Chancellor calls it a Zeitenwende (‘era shift’), while the National Security Strategy describes it as a ‘decisive decade.’ And I think that’s broadly correct: the unipolar moment – that period of pronounced American global dominance that characterized the post-Cold War period – is ending, or perhaps already over. What comes next is unclear, but its foundations are being laid now.
In practice, however, there’s less genuine change in security policy than that might suggest. There’s a continued lack of viable alternatives to US power globally, and the US remains largely unable to pivot to new challenges. The war in Ukraine has highlighted that Europe retains its traditional free rider and collective action problems in defense, making it difficult to develop the necessary capabilities, defense industrial base, or even common will needed to substitute for U.S. power. In the Middle East, despite the Abraham Accords and a growing alignment between the Gulf States and Israel, the security side is still backstopped by US military power. The National Security Strategy may have de-emphasized the Middle East and emphasized Asia, but there have been few, if any, practical shifts of US forces from the former region.
Instead, what we’ve seen from this administration is an increasing focus on the technical-economic side of the ledger: the elevation of financial and trade power in the name of strategic decoupling, resilient supply chains, and energy transition. The use of export controls on semiconductors to restrain China’s technological rise, and the use of sanctions to constrain Russia’s wartime economy are among the most assertive and widespread application of economic tools we’ve seen since the interwar period. To put it bluntly: the so-called ‘liberal order’ is rapidly becoming less economically liberal.
More importantly, these economic tools don’t actually answer fundamental questions about America’s role in the world or the goals we’re trying to achieve. Instead, the Biden team is mostly putting new tools into the service of an existing strategy of US global primacy. It’s a risky approach, with the potential to blowback on the United States, and to alienate the countries of the global south. Nor is it clear if it’s sustainable. Right now, America is leveraging thirty-plus years of intense globalization to impose costs on China and Russia, but our ability to do that will shrink over time as globalization contracts. And for all the talk in Washington about ‘ally shoring’ or ‘friend shoring,’ the heavy use of the stick – the economic weapon – has not yet been matched by the carrots of new trade agreements or increased interdependence with friendly states.
In short, the Biden administration’s use of economic statecraft will have far reaching implications, but won’t necessarily move us any closer to resolving the big security questions that the United States faces in the 21st Century. If one believes the rhetoric in the National Security Strategy, then the goal of this economic warfare is to preserve a global liberal order under US leadership. But these economic choices themselves seem inimical to that goal. At best, it offers the possibility that America might sustain its military primacy in an increasingly illiberal global order, an exchange that seems problematic to say the least.
I’ll be writing a lot more on this in coming months, as I’m happy to be launching a new project over at the Stimson Center in the coming year. The project on Geopolitics and Economic Statecraft will explore the places where grand strategy and economics intersect, with an eye to understanding how America can better position itself in an increasingly competitive global system.
Up next: My top books of 2021, and what’s on my reading list for 2022.
[i] The english speakers in the audience will probably know this aphorism better as: “The best laid plans of mice and men often go astray.”
[ii] Discussions are ongoing, but the major problem facing AUKUS appears to be the lack of actual capacity to build the submarine component of the deal in either the US or the UK.
"... but won’t necessarily move us any closer to resolving the big security questions that the United States faces in the 21st Century."
Nobody is willing to put in layman language the essence of these big security questions. Loss of hegemony is not a security question. Loss of ability to extract value from other's resources & work are not security questions. Unless we are talking about the security of the plutocratic regime at the core of the US polity, and its possible demise if the abuse and exploitation of the world turns more and more inwards.