War by Other Means

by Robert D Blackwill

  122. Heriberto Araújo and Juan Pablo Cardenal, “China’s Economic Empire,” New York Times, June 1, 2013.

  123. In mid-2012, the government of Argentina moved to nationalize Spanish energy firm Repsol’s Argentine assets on rumors that Repsol was in talks with Chinese state oil major Sinopec.

  6. U.S. Foreign Policy and Geoeconomics in Historical Context

  1. The authors thank Robert Zoellick and Philip Zelikow for their helpful feedback. This chapter also owes a profound debt to the historical craftsmanship of Alan Dobson and David Baldwin.

  2. Michael Schuman, “State Capitalism vs the Free Market: Which Performs Better?,” Time, September 30, 2011.

  3. Gilpin, as quoted in David A. Baldwin, Economic Statecraft (Princeton, N.J.: Princeton University Press, 1985), 209.

  4. U.K. House of Lords, Transatlantic Trade and Investment Partnership, European Union Committee, summarizing the views of Daniel J. Hamilton; see http://www.publications.parliament.uk/pa/ld201314/ldselect/ldeucom/179/17905.htm#note38. U.S. trade representative Miriam Sapiro echoed similar reservations during a panel at the 2013 Transformational Trends Conference, co-hosted by the Foreign Policy Group and U.S. Department of State Policy Planning Staff; a video of her remarks is available at https://www.youtube.com/watch?v=cranPeN9FSc.

  5. U.K. House of Lords, views of Daniel J. Hamilton.

  6. Underscoring this point, law professor Anna Gelpern observes how “the [global economic] system is set up as if market finance and political patronage were distinct.” Gelpern, “Russia’s Contract Arbitrage,” Georgetown University Law Faculty Publication 1448, June 4, 2014.

  7. Samuel F. Wells Jr., The Challenges of Power: American Diplomacy, 1900–1921 (Lanham, Md.: University Press of America, 1990), 63.

  8. “Foreign Economic Trends: The Separation between Foreign Economic and Political Policy,” Foreign Relations of the United States, 1969–1976, Volume III, Foreign Economic Policy; International Monetary Policy, 1969–1972, Document 26, U.S. Department of State, Office of the Historian, https://history.state.gov/historicaldocuments/frus1969-76v03/d26.

  9. Ibid. Cooper goes on to warn that while “by and large, international trade negotiations and international monetary discussions have proceeded in their own way and at their own pace,” certain “complications” may make it “more difficult to preserve this semi-separation between economic and political relations with other countries in the next decade than it has been in the past two decades.”

  10. Alan P. Dobson, US Economic Statecraft for Survival 1933–1991 (New York: Routledge, 2002). Franklin also advocated land acquisition as a means of strengthening the new nation’s security. He fantasized with his friend the evangelical preacher George Whitefield about their being “jointly employ’d by the Crown to settle a Colony on the Ohio … What a glorious Thing it would be, to settle in that fine country a large Strong Body of Religious and Industrious People! What a Security to the Other Colonies: and Advantageous to Britain, by Increasing her People, Territory, Strength, and Commerce.” Gordon S. Wood, The Americanization of Benjamin Franklin (New York: Penguin, 2005), 81, cited in Lehrman Institute, “The Founders and the Pursuit of Land,” http://lehrmaninstitute.org/history/founders-land.asp.

  11. Baldwin, Economic Statecraft.

  12. Felix Gilbert, To the Farewell Address: Ideas of Early American Foreign Policy (Princeton, N.J., Princeton University Press, 1970).

  13. Lawrence S. Kaplan, Thomas Jefferson: Westward the Course of Empire (Wilmington, Del.: SR Books, 1999); Letter from Thomas Jefferson to Robert R. Livingston, U.S. Minister to France, April 18, 1802, http://www.let.rug.nl/usa/presidents/thomas-jefferson/letters-of-thomas-jefferson/jefl146.php.

  14. Dobson, US Economic Statecraft for Survival, 93.

  15. In 1861 U.S. secretary of state William Seward bluntly warned his Whitehall counterparts that if the United Kingdom was “tolerating the application of the so-called seceding States, or wavering about it, [it could not] remain the friends of the United States.” It might as well “prepare to enter into alliance with the enemies of this republic.” Linus Pierpont Brockett, The Life and Times of Abraham Lincoln, Sixteenth President of the United States (Philadelphia: Bradley, 1865), 269.

  16. Walter Stahr, Seward: Lincoln’s Indispensable Man (New York: Simon and Schuster, 2012), 4.

  17. “Annual Report of Maj. Gen. Arthur Macarthur, U.S.V., Commanding Division of the Philippines, Military Governor in the Philippine Islands,” in Annual Reports of the War Department for the Fiscal Year Ended June 30, 1901 (Washington, D.C.: Government Printing Office, 1901), 114.

  18. Viscount Grey of Fallodon, Twenty Five Years 1892–1916 (London: Hodder and Stoughton, 1923), 103.

  19. Dobson, US Economic Statecraft for Survival, 15.

  20. Ibid.

  21. Woodrow Wilson, “The Meaning of Liberty,” address at Independence Hall on July 4, 1914, available at http://www.presidency.ucsb.edu/ws/?pid=65381.

  22. Richard N. Rosecrance and Arthur A. Stein, eds., No More States? Globalization, National Self-determination, and Terrorism (Lanham, Md.: Rowman and Littlefield, 2006), 81.

  23. “Milestones: 1921–1936: Interwar Diplomacy,” U.S. Department of State, Office of the Historian, https://history.state.gov/milestones/1921–1936; “Milestones: 1921–1936: Interwar Diplomacy,” United States Department of State, Office of the Historian, available at https://history.state.gov/milestones/1921-1936.

  24. “Milestones: 1921–1936: The Dawes Plan, the Young Plan, German Reparations, and Inter-Allied War Debts,” United States Department of State, Office of the Historian, available at https://history.state.gov/milestones/1921-1936/dawes.

  25. Frank Whitson Fetter, “The Role of Governmental Credit in Hemispheric Trade,” Law and Contemporary Problems, Autumn 1941, 724.

  26. Ronald W. Cox and Daniel Skidmore-Hess, U.S. Politics and the Global Economy (Boulder, Colo.: Lynne Rienner, 1999), 29.

  27. Barbara W. Tuchman, Stillwell and the American Experience in China, 1911–45 (New York: Grove Press, 2001), 190.

  28. William Hardy McNeill, America, Britain and Russia: Their Co-operation and Conflict, 1941–1946 (New York: Johnson Reprint, 1970), 778; “One War Won,” Time, December 13, 1943.

  29. H. L. Stimson and McGeorge Bundy, On Active Service in Peace and War (New York: Harper, 1947), 171.

  30. Dobson, US Economic Statecraft for Survival, chap. 2, esp. 72.

  31. Ibid, esp. 20.

  32. David L. Dangerfield and Royden Gordon, The Hidden Weapon: The Story of Economic Warfare (New York: Harper and Brothers, 1947), 44.

  33. Dobson, US Economic Statecraft for Survival, 48.

  34. For a detailed history, see Jeremy Atack and Peter Passell, A New Economic View of American History: From Colonial Times to 1940, 2nd ed. (New York: Norton, 1994).

  35. Cordell Hull, The Memoirs of Cordell Hull (New York: Macmillan, 1948), 1:81.

  36. Baldwin, Economic Statecraft, 207.

  37. New York Times, July 16, 1944, pt. 4, p. 7 (cited in Baldwin, Economic Statecraft, 208).

  38. Letter from Harry S. Truman to James Byrnes, January 5, 1946, http://teachingamericanhistory.org/library/document/letter-to-james-byrnes.

  39. George C. Marshall, “Marshall Plan” speech at Harvard University as prepared for delivery on June 5, 1947, available at www.oecd.org/general/themarshallplanspeechatharvarduniversity5june1947.htm.

  40. John Gimbel, The Origins of the Marshall Plan (Stanford: Stanford University Press, 1976), 267.

  41. Anne R. Pierce, Woodrow Wilson and Harry Truman: Mission and Power in American Foreign Policy (New Brunswick, N.J.: Transaction, 2007), 83.

  42. Diane B. Kunz, “The Marshall Plan Reconsidered: A Complex of Motives,” Foreign Affairs, May/June 1997, 166.

  43. Pierce, Woodrow Wilson and Harry Truman, 193.

  44. John Lewis Gaddis, George F. Kennan: An American Life (New York: Penguin, 2011), 283.

  45. Dobson, US Economic Statecraft for Survival, 97.
>
  46. Eisenhower went on to argue that “the solidarity of the free world and the capacity of the free world to deal with those who would destroy it are threatened by continued unbalanced trade relationships—the inability of nations to sell as much as they desire to buy. By moving boldly to correct the present imbalance, we shall support and increase the level of our exports of both manufactured and agricultural products. We shall, at the same time, increase the economic strength of our allies. Thus shall we enhance our own military security by strengthening our friends abroad. Thus shall we assure those sources of imports that supplement our domestic production and are vital to our defense.” Dwight D. Eisenhower, Special Message to the Congress on Foreign Economic Policy, March 30, 1954, www.presidency.ucsb.edu/ws/?pid=10195.

  47. Dobson, US Economic Statecraft for Survival, 146–147.

  48. Ibid., 168: “Rostow believed trade controls had become an ‘important symbol of our cold war resolve’ and ‘moral disapproval’ of the Soviet Union.” For further discussion of Rostow’s “flexible response” policy, see David A. Welch, James G. Blight, and Bruce J. Allyn, “The Cuban Missile Crisis,” in The Use of Force: Military Power and International Politics, ed. Robert J. Art and Kenneth N. Waltz, 6th ed. (Lanham, Md.: Rowman and Littlefield, 2004), 225–226; David Milne, America’s Rasputin: Walt Rostow and the Vietnam War (New York: Farrar, Straus and Giroux, 2008), 81; Dobson, US Economic Statecraft for Survival, 154–155.

  49. As first leaked to the New York Times in January 1962, the Ball Report urged increased trade with the Communist bloc. It reportedly recommended that Kennedy “persuade other free enterprise countries … that we are genuinely prepared to recognize the potential economic advantage of East-West trade.” See James A. Bill, George Ball: Behind the Scenes in U.S. Foreign Policy (New Haven: Yale University Press, 1997), 59–60; “Washington Report,” Reading Eagle, September 26, 1963, 2nd section, 22; Dobson, US Economic Statecraft for Survival, 155–160.

  50. Eisenhower Library, CFEP Records, Policy Paper Series box 1, folder: CFEP 501 East-West Trade Action Papers 1955 (3), “Review of Economic Defense Policy and Program: The Background,” January 20, 1955, cited in Dobson, US Economic Statecraft for Survival, 143; Dobson, US Economic Statecraft for Survival, 143–144.

  51. Dobson, US Economic Statecraft for Survival, 159; John F. Kennedy library, NSF box 176, folder: USSR General, US Economic Relations with the Soviet Bloc 5/25/61, May 25, 1961, Edwin Martin to McGeorge Bundy, subject “Review of United States Economic Relations with the Soviet Bloc,” paper prepared under authority of George Ball, cited in Dobson, US Economic Statecraft for Survival, 159–162.

  52. Lyndon Baines Johnson, The Vantage Point: Perspectives of the Presidency, 1963–1969 (Dumfries: Holt, Rinehart and Winston, 1971), cited in Dobson, US Economic Statecraft for Survival, 172.

  53. Lyndon B. Johnson Library, NSF Committee File, box 16, folder: Miller Committee Meetings March 4–5/18–19/25–26, 1965, presentation by Llewellyn Thompson, ambassador at large, assisted by Trezise et al., March 18, 1965, cited in Dobson, US Economic Statecraft for Survival, 175; Dobson, US Economic Statecraft for Survival, 332n96.

  54. “In sum, trade with the European Communist countries is politics in the broadest sense,” the Miller Commission declared in its final report. “In this intimate engagement men and nations will in time be altered by the engagement itself. We do not fear this. We welcome it. We believe we are more nearly right than they about how to achieve the welfare of nations in this century.” Lyndon B. Johnson Library, NSF Committee File, box 25, folder: Miller Committee Report to the President, and Miller Committee members to Johnson, April 29, 1965, cited in Dobson, US Economic Statecraft for Survival, 176.

  55. “The Role of Foreign Aid in Development: South Korea and the Philippines,” Congressional Budget Office Memorandum, September 1997.

  56. X [George Kennan], “The Sources of Soviet Conduct,” Foreign Affairs, July 1947; Telegram, George Kennan to George Marshall (“Long Telegram”), February 22, 1946, available at www.trumanlibrary.org/whistlestop/study_collections/coldwar/documents/pdf/6-6.pdf.

  57. NSC 68: United States Objectives and Programs for National Security, April 14, 1950.

  58. Dobson, US Economic Statecraft for Survival, 30.

  59. Ibid.

  60. Ibid.

  61. It is not as if geoeconomics was entirely lacking in the U.S. approach to Vietnam. Walter Rostow called for foreign aid into Vietnam, and supported a plan to develop South Asia’s economy by setting up something that resembled the Tennessee Valley Authority in the Mekong Delta. Rostow had no doubt that “one can champion foreign aid and the bombing of communist-infected nations at the same time.” It was also in this period that Washington targeted economic assistance in its fight to contain communism around the world, but the amounts were palpably different than the efforts undertaken two and a half decades earlier, and in any case, these measures were decidedly secondary to the military elements of the Vietnam strategy. Milne, David, America’s Rasputin: Walt Rostow and the Vietnam War (New York: Macmillan, 2008), 7.

  62. Dobson, US Economic Statecraft for Survival, 181–213.

  63. Henry Kissinger, White House Years (New York: Little, Brown, 1979), 153–154.

  64. In his memoirs, Nixon attributed a U.S.-Soviet summit to a cunning military and political strategy. The account is telling in his omission of any economic variables: “A U.S.-Soviet summit was at last possible because of two achievements: progress in the SALT talks before the China overture was revealed, and progress on a Berlin settlement after the China announcement had been made.” Richard Milhous Nixon, Memoirs (New York: Grosset and Dunlap, 1978), 523.

  65. Walter Russell Mead, Special Providence: American Foreign Policy and How It Changed the World (New York: Alfred Knopf, 2001), 73.

  66. Ibid., 36.

  67. I. M. Destler, Making Foreign Economic Policy (Washington, D.C.: Brookings Institution, 1980).

  68. Ibid.

  69. Kissinger, White House Years, 154, cited in Dobson, US Economic Statecraft for Survival, 199.

  70. Robert L. Paarlberg, “Using Food Power: Opportunities, Appearances, and Damage Control,” in Dilemmas of Economic Coercion: Sanctions in World Politics, ed. Miroslav Nincic and Peter Wallensteen (New York: Praeger, 1983), 127 as cited in Dobson, US Economic Statecraft for Survival.

  71. For a detailed account of the “Great Grain Robbery” and its historical importance, see Dobson, US Economic Statecraft for Survival, 206–210.

  72. Ibid., 206.

  73. Nixon Project, Ezra Solomon Papers, box 5, folder: CIEP Task Force Draft Report, November 22, 1971, study memo 3 prepared by Robert McLellan, Department of Commerce; also see ibid., folder: CIEP 1, W. De Vier Pierson memo on Task Force Report, January 3, 1972, which indicates that it embodies established view of the Commerce Department.

  74. Dobson, US Economic Statecraft for Survival, 217.

  75. Ibid., 220–221; Executive Order 11808, September 30, 1974.

  76. Zbigniew Brzezinski, Power and Principle: Memoirs of the National Security Adviser, 1977–1981 (New York: Farrar, Straus and Giroux, 1983), 461; Gerry Argyris Andrianopoulos, Kissinger and Brzezinski: The NSC and the Struggle for Control of US National Security Policy (Basingstoke, England: Palgrave Macmillan, 1991), 181; Thomas J. McCormick, America’s Half-Century: United States Foreign Policy in the Cold War and After (Washington, D.C.: Johns Hopkins University Press, 1995), 205.

  77. Samuel P. Huntington, “Trade, Technology, and Leverage: Economic Diplomacy,” Foreign Policy 32 (Autumn 1978): 63.

  78. Ibid.

  79. Dobson, US Economic Statecraft for Survival, 216; for a broader perspective, refer to Daniel Yergin, The Prize: The Epic Quest for Oil, Money, and Power (London: Simon and Schuster, 1991).

  80. Huntington, “Trade, Technology, and Leverage,” 65.

  81. Ibid., 79.

  82. Baldwin, Economic Statecraft, 251.

  83. Philip Hanson, Western Economic Statecraft in
East-West Relations: Embargoes, Sanctions, Linkage, Economic Warfare, and Détente (New York: Council on Foreign Relations, 1988), 43.

  84. Mead, Special Providence, 76.

  85. Ibid.

  86. Dobson, US Economic Statecraft for Survival. See also Henry Bienen and Robert Gilpin, “An Evaluation of the Use of Economic Sanctions to Promote Foreign Policy Objectives, with Special Reference to the Problem of Terrorism and the Promotion of Human Rights,” (report prepared for the Boeing Corporation, April 2, 1979).

  87. Ibid.

  88. Charles Krauthammer, “The Unipolar Moment,” Foreign Affairs 70, no. 1 (1990–1991).

  89. See Mead, Special Providence on this point.

  90. “A National Security Strategy for a New Century,” National Security Council, May 1997, http://nssarchive.us/NSSR/1997.pdf, 2–3.

  91. “A National Security Strategy of Engagement and Enlargement,” National Security Council, July 1994, http://nssarchive.us/NSSR/1994.pdf, i.

  92. William Kristol and Robert Kagan, “Toward a Neo-Reaganite Foreign Policy,” Foreign Affairs, July/August 1996.

  93. That is not to suggest this advice was coming only from outsiders. Indeed, often neglected in the historical retelling of 1990s Russian economic reforms is just how much of this “shock therapy” advice was originating from within Yeltsin’s Russia. If anyone deserves credit as chief architect of shock therapy, it is Yegor Gaidar, who rotated through several top posts under President Yeltsin, including brief stints as minister of finance and as acting prime minister in 1991 and 1992.

  94. See Juan Zarate, Treasury’s War: The Unleashing of a New Era of Financial Warfare (New York: PublicAffairs, 2013); Maurice Greenberg, William Wechsler, and Lee Wolosky, “Terrorist Financing,” Council on Foreign Relations Task Force Report, October 2002.

  95. U.S. foreign policy commentator Fareed Zakaria recounts meeting a friend who was a well-connected member of the Chinese Communist Party for lunch in January 2007, not long after George W. Bush announced his surge of troops into Iraq. Asked how the news was being received in Beijing, the CCP official replied to the effect of, “We would hope that you would send the entire American Army into Iraq and stay for another 10 years. Meanwhile, we will keep building up our economy.” Fareed Zakaria, “With an Absent United States, China Marches On,” Washington Post, July 2, 2015.