Fighting the last war: it is time for a revitalized economic statecraft.

• Author: Bailey, Norman A.

Statecraft is the use of the instruments of state power in the achievement of foreign policy and national security goals. Economic statecraft is the use of the economic instruments of state power, and as such, is one of a short list of instruments of power employed in this manner. The others are diplomatic statecraft, or the art of international negotiation; public statecraft or propaganda; subversion; military display; and war.

Economic statecraft has a long history. For centuries, countries have sought to impose economic costs and/or bestow economic benefits upon other countries to further their international objectives. Since World War I, however, economic statecraft has steadily gained in importance within the general panorama of international relations. Sometimes this emphasis has caused crises which have degenerated into the use of more violent measures of statecraft, such as subversion and war. The German attempt to enforce its blockade of Great Britain and France during World War I through submarine warfare led directly to the entry of the United States into the war on the side of the Allies. The sinking of the Lusitania by a submarine was presented to the American republic by the Wilson government as an example of unrestricted submarine warfare. When the ship was examined recently by divers, it was discovered that it had, in fact, been carrying military contraband in violation of the rules of neutrality. Cessation of exports of oil and scrap iron to Japan in 1939-1941 by the United States is considered the main reason for the suicidal attack on Pearl Harbor by the Japanese in December of 1941.

The strategies utilized in the pursuit of economic statecraft are of two kinds--negative and positive; that is, the attempted punishment or reward of other countries or groups of countries through economic action. The negative strategies include pre-emptive buying (the attempt to deny the access of another country to raw materials of importance to that country) and the counterfeiting of another country's currency to attempt to cause inflation. The most coercive economic measure that can be taken by one country against another is a formal blockade, which in international law is an act of war. Blockade as a strategy has fallen out of common use in modern times, the only example being the partial blockade of Cuba by the United States during the so-called missile crisis of 1962. Perhaps it should be dusted off and used more often. A blockade of...