|Secretary of State Hillary Clinton, speaking in late 2010 to the NY Economic Club, put economics and market forces at the heart of U.S. foreign policy. “Economic statecraft,” she stated, “harnesses global economic forces to advance America’s foreign policy and employs the tools of foreign policy to shore up U.S. economic strength.” John Kerry, in his first speech as Secretary of State, agreed that U.S “foreign policy is economic policy.”
|Economic statecraft has indeed become the dominant pillar of U.S. foreign policy. Most nations, especially emerging markets like the BRICS, have economics at the center of their foreign policy. And for good reason, for the first time in history global superpower status will have little relation to troops or weapons. Twenty-first century power is about ensuring security by building strong economies through policies that spur growth, create jobs, and promote domestic commercial interests. Wealth can fund armies and navies. But power is more complicated now, defined by the complex nature of global markets and exercised through strategic economic policies, creative networking and commercial alliances. Smart power is a careful blend of soft and hard power. Hard power is increasingly defined not by invading armies, but by assertive economic tools such as sanctions, export restrictions and retaliatory trade remedy actions, occasionally accentuated by a few major powers with threats of tailored military intervention.