As the years pass by, both states and the increasingly important non-state actors in international relations make greater and greater use of the instruments of economic statecraft, the importance of which, in backing up diplomacy and supplementing other elements of statecraft, can hardly be exaggerated. Two recent developments in the field have been particularly significant: the role of financial sanctions in the strategic mix; and even more so, the place of cyber attacks as a tactic in the implementation of economic strategies.
Curiously, despite its rapidly increasing role in the execution of the external policies of both states and non-state actors, there has been a dearth of recent academic and policy studies. I have been a practitioner and teacher of economic statecraft for over thirty years, but I have to teach my courses without a text, since the last one on the subject was published in 2002. Given the rapidly changing landscape, it might just as well have been published in 1902.
Some works on certain aspects of the subject have indeed recently been published, especially Juan Zarate's book on his experiences with financial sanctions at the Treasury Department and Nicholas Lambert's splendid history of the financial warfare preparations made by Great Britain for eventual conflict with Germany prior to World War I. Both these books were reviewed by me in a previous issue of TIE. But that is about all, except for the occasional article.
That has now changed, thanks to an excellent study by the Hudson Institute entitled Cyber-Enabled Economic Warfare: An Evolving Challenge, and a series on economic statecraft, just inaugurated by the Center for a New American Security, the first issue of which is entitled American Economic Power and the New Face of Financial Warfare. Thus, both salient aspects of contemporary economic statecraft are finally being addressed.
The Hudson study is edited with extensive introductory and concluding chapters by Samantha F. Ravitch. The six individual chapters cover various aspects of the overall subject and the fact they are so readable is either a tribute to their respective authors or to the editing skills of Ravitch. Topics covered include the denial to Iran of the use of the Swift financial clearing house; a fascinating piece on intellectual property piracy as a modern form of privateering; the need for a response to financial cyber-threats; and the vulnerability of critical infrastructure, with emphasis on...