Nonfiction Books » Politics & Society » American Politics

The best books on Geoeconomics

recommended by Jennifer M Harris

War by Other Means: Geoeconomics and Statecraft by Jennifer M Harris & Robert Blackwill

War by Other Means: Geoeconomics and Statecraft
by Jennifer M Harris & Robert Blackwill


With its passion for neoliberal ideology, the US uses its economic weight clumsily in terms of foreign policy, says former state department official and senior fellow at the Council on Foreign Relations, Jennifer M. Harris. Here she picks the best books for understanding the vital area of geoeconomics.

Interview by Jordan Schneider

War by Other Means: Geoeconomics and Statecraft by Jennifer M Harris & Robert Blackwill

War by Other Means: Geoeconomics and Statecraft
by Jennifer M Harris & Robert Blackwill


So what is geoeconomics and why did you get interested in the topic?

Geoeconomics is not new, but newly sexy. In doing the legwork for my book, it struck me that for all of the definitions floating around out there, none of them actually described what we were seeing on the ground. From my perch at the State Department, I was witnessing how countries were increasingly looking first to economic means of all kinds — from trade to investment to monetary policy — to work their will in the world. The US, by contrast, was still reaching first for its gun over its purse. This was the phenomenon that we set out to describe: how states today are using economic instruments to produce beneficial geopolitical results. This is the definition we give to the term ‘geoeconomics,’ and the project is really to lay out a framework more for how to think about it than what to think about it.

What first brought you to it?

This book was cheap therapy for me in seven years — often frustrating ones — covering these issues from the US Secretary’s Policy Planning Staff at the State Department, just watching how awkward the US is at times in trying to flex economic muscle to advance its strategic interests; how uncomfortable we are with certain aspects of this.

Do you feel better now?

I don’t pretend to think that we’ve laid out all the answers here. But the book aspires to be the opening salvo in a conversation that needs to stretch into Congress, across this presidential election, into think tanks and universities.

Well, I’m not sure how to transition into your first book choice, so I’m looking forward to hearing you do it. Tell me about Gary Shteyngart’s Super Sad True Love Story (2012).

This book was a lot of fun. It’s obviously fiction, but what I like about it is the way Shteyngart takes a pretty wonky concept in geoeconomics and makes it real. It begins in a not too distant America that is over a barrel with its Chinese creditors, financially strapped and therefore constrained in a lot of the geopolitical choices that it’s trying to make in the world. He writes some allegory into the main characters – the protagonist is of Eastern European descent and very attached to his Russian parents, and he falls in love with a young Korean immigrant. Both of these characters are a snapshot of America at the beginning of the 21st century. A lot of what the male protagonist embodies is 20th-century America, and the young millennial in all of her jaded cynicism is what America seems to be heading into.

Let’s go on to another book with China as its focal point. This is Michael Forsythe and Henry Sanderson’s China’s Superbank (2012).

This book reads like fiction. It’s written by two wonderful journalists who are, at heart, wonderful storytellers. They are taking the vehicle of the China Development Bank as a story of modern day China. Through the lens of this bank, they give the reader a real sense of the inner workings—the plumbing of China’s economy, and how it has managed its historic rise, as well as the array of consequences and geopolitical headaches this has spelled for the US.

“The US often needs to make a choice between its principles and its bottom line”

Also at a personal level, I really admire both of these authors. Forsythe, in particular, got ‘PNG-ed’, State Department speak for [being made a] persona non grata, from Bloomberg and China for his reporting. Much of the best, early reporting on corruption and wealth in the Chinese elite was hat tip to Forsythe, and in my view, the Chinese government eventually presented Bloomberg with a choice: do business or do news in China. There were allegations that Bloomberg buried the story on heavy pressure from the Chinese government. The upshot is that now Michael is with the New York Times and continuing to do wonderful journalism, but the episode in itself offers a sharp reminder that the US often needs to make a choice between its principles and its bottom line in how our companies are faring in China.

What parts of the plumbing does this book get right?

It really tells the story of the rise of the China Development Bank (CDB), one of a handful of massive state-owned policy banks in China. CDB has a lending portfolio that outstrips the World Bank’s by several orders of magnitude. It has managed to strong-arm other countries into changing their constitutions to ensure China gets paid back, in the case of Venezuela. It is also funded in large part by China’s current account surplus which consists largely of US treasury bills. In this way, CDB is a proxy for the uneven trade relationship that the US and China have, and the ways in which that surplus gets recycled into Chinese state-led foreign investment. The financial engines of China’s ‘Go Out’ campaign—and how these financing streams are intimately related to other issues in the US-China economic relationship, from China’s holdings of US debt, to the US-China trade relationship, is vastly underreported and misunderstood in US policy circles.

It does seem to tie back with our first novel in the US-China economic dance over the past twenty-plus years.

Exactly right. It also gives you a sense of how what China is doing abroad ties directly back to the makeup of its domestic economy. A lot of what we’ve tried to do in War By Other Means is not only lay out a taxonomy for these various geoeconomic instruments, but also show how they work in combination with one another. Forsythe and Sanderson do this beautifully. Through China’s dealings with other countries, and Venezuela is one they treat at length, you see how the CDB is working through Chinese state-owned enterprises and co-financing ventures with Chinese sovereign wealth funds, and how all of these different Chinese state-owned companies have pots of cash working together in this choreography that’s coming out of Beijing — all for very real geopolitical, as well as economic, effect.

Venezuela’s an interesting example in that some would see it as throwing good money after bad. Are there costs associated with having a development bank thirty times larger than the World Bank?

Sure, and we never promise in War By Other Means that geoeconomic tools are cost free. Of course these tools cost something. But the point is that so, too, does every other instrument of statecraft, especially, I would argue, military instruments. That’s something that many people, especially in Washington, tend to miss. Effectiveness, of course, depends on what your aim is. If you’re sitting in Beijing, and your signature geopolitical project is, say, undermining US alliances in Asia or chipping away at the dominance the US has had in the western hemisphere, then perhaps if you have, say, fifty billion dollars to put to that cause, another aircraft carrier or another series of military investments likely aren’t your best return on investment there.

Or, to put it another way: There are a lot of countries in Africa and Latin America that are hungry for investment. If that investment comes with geopolitical strings, say, predicating Chinese investment on disavowing Taiwan, as we’ve seen Beijing do, that’s a price many countries are willing to pay. So far, China’s gotten some fairly impressive geopolitical return on this investment even if, as you say, the economics of the thing throw good money after bad.

So why do the Chinese get this and why haven’t Americans?

It’s an outgrowth of the differences in our respective historical traditions and political economies. China is obviously a country that makes no particular distinction between state and market, and is thoroughly comfortable flexing economic muscle to get what it wants. The US, by contrast, was a country begun as an experiment in limited government. There are certain first principles that should absolutely trump how we, in the United States, engage in the world and the kinds of tools we use. It’s obviously the case that the US is and should be constrained from some of the more brazen shows of geoeconomics that we see coming from China. One of my favourite examples is how Chinese leaders love to punctuate state visits around the world by ordering Chinese airlines to purchase a slew of, say, Embraer aircraft when they go to Brazil. Obama couldn’t exactly order Delta or American Airlines to do this. Still, even given some of our structural and political constraints, there’s a lot more we could be doing.

Let’s turn to another book that also looks at the history of American economic statecraft, David Baldwin’s Economic Statecraft (1985) from the mid-1980s.

I cried happy tears when I discovered this book, realising that I had a kindred spirit out there who many years earlier had gotten to a lot of the answers I had only just begun coming around to. He really does a wonderful service in laying out the beginnings of a conceptual framework, even as he sticks true to his billing of remaining avowedly theoretical. Where he does give examples, it’s primarily on sanctions and trade. He doesn’t aim to offer an inventory of these tools, but he has done a lot of the hard thinking that remains evergreen, and that Bob and I were able to stand on. But, as with most things that happened in 1985, the world today looks more different than not: some of the central theatres of foreign policy today, like the cyber domain, didn’t even exist as Baldwin was writing. Others, even if they’re as old as diplomacy itself, like trade and economic assistance, have new players like sovereign wealth funds.

Baldwin’s great service was also to identify what economic statecraft isn’t. There’s a tendency to lump a lot of these themes in with international political economy—conflating things that are more or less trade for trade’s sake as geoeconomics—rather than judging these efforts by geopolitical (as opposed to their economic) outcomes.

Is there anything you think he got wrong?

Not really. Mostly I’m sad that he didn’t write an updated volume to this. He’s still around, and I’ve corresponded with him a bit. I would love to hear his views on what it is he thinks we’re seeing after the so-called ‘end of history.’ Does he think, as I do, that we’ve ingested our own neoliberal medicine, and begun to believe our own lines—on global markets as an apolitical sphere, on the Bretton Woods institutions as above the realm of geopolitics—a little more than we should?

So next, David Singh Grewal and Network Power: The Social Dynamics of Globalization (2008).

I’m fudging a bit and choosing the author more than a book per se. I’m very long on Grewal, a young scholar whose best work is yet to come. His big contribution here is to remind us that a lot of what we, certainly Americans, take for granted as the architecture of this rules-based economy — the tectonics of our global trading and finance system, things we imbue with a lot of internal logic and apolitical authority — actually are politics all the way down. This was intentional on the part of the US. When America built the liberal economic order it built after World War II, at that point, at least, the framers were quite clear-eyed about the choices they were making in the design of the WTO and IMF as expressions of US power and prerogative. For the US, it was a project as much about ending the British Empire as anything else. We’ve forgotten that somewhere along the way, particularly after the Cold War.

We run the risk of loving these institutions a little too much. Seeing them with an apolitical authority all of their own — to be protected from unseemly incursions of US strategic interests — robs these institutions of the kind of permeability to politics that they need to stay relevant. I’m not convinced that these institutions are still delivering the kind of enormous geopolitical benefits to the US that many US policymakers often claim, if they ever were. Witness the disinvestment that you see from Washington in these institutions. How long has it taken to pass IMF quota reform? How long to decide on the fates of Opic and Ex-Im? If these things are such vital instruments of US national interest, one would expect to see a lot more maintenance of effort than we’re actually seeing.

There’s a distinction between loving them and being stuck with them. Generally, it has taken world wars to reshape international economic institutions. We’ve just gone through a giant financial crisis and there wasn’t a lot of change in regard to international economic architecture. Would you and Grewal agree we are stuck with the status quo? Should we be fighting for a new reimagining?

My guess is that David and I would both want to see that reimagining. I’m not sure that Washington has much appetite for it. There’s certainly some destructive insights from this presidential campaign. It’s not popular to shore these institutions up. One reminder that Harvard economist Dani Rodrik often gives is a sort of thought experiment around the WTO: essentially, how different do we imagine the WTO would be if Mozambique, rather than the US, had designed it? For me, that crystallizes just how much politics and self-interest is baked into this system we imbue with this Rawlsian, blind order. As it should be. History has not looked kindly on attempts to design institutions based on much more than state interests and underlying expressions of power. If the US were to reimagine these things and get back to the scale of ambition that existed in 1945, we could do so in ways that served our interests, as well as those of other nations interested in being constructive partners.

“This seems to be a not-small nuance that neoliberal economics — at least in its current form — has largely lost sight of”

In his Networked Power, David also reminds us that Adam Smith was quite comfortable subjugating economic tools to the needs of state power and making economics into a tool to defend and promote national interests. In some ways, the problem with economics is that it has become the exclusive province of economists. While early liberals like Adam Smith and Richard Cobden understood that what was advantageous from an economic perspective might not be so from a geopolitical one, this seems to be a not-small nuance that neoliberal economics—at least in its current form—has largely lost sight of.

Our last book is certainly not written by one. This is Adam Hochschild’s Spain in Our Hearts.

Out just this year, Hochschild is a wonderful storyteller and first-rate journalist. He’s writing about the Spanish civil war and reminding us just how un-self-aware US foreign policy is. A lot of the narrative accounts of the civil war come from Hemingway and Orwell. What Adam is doing is stepping behind a lot of the familiar tones the US feels comfortable with and showing how divided America was.
He tells a somewhat untold story of the involvement of US corporations. A lot of the current focus, and my work, has looked at how ostensibly commercial entities from Russia and China are being used as conduits for projecting state power and accomplishing political aims. In fact, during the Spanish civil war, the same was true for US corporations. He tells a great story of Texaco. At one point the CEO, Torkild Rieber, a Norwegian immigrant, was a great admirer of both Hitler and Franco in the 1930’s, eventually turned much of his attention onto the Spanish Civil War. Rieber wound up violating a lot of the neutrality laws in order to continue supplying oil to Franco’s troops – at a discount, no less. He also allowed Texaco vessels to convey espionage and actual intelligence that it seems was quite meaningful to the course of that war.

“The US is schizophrenic in our relationship to geoeconomics”

All of which is to say, with a long enough memory, our hands are not entirely clean: at many points in history, US economic might—even as expressed by private actors—has sought its fair share of geopolitical ends, taking to some fairly unsavory tactics and characters in the process. It’s also striking just how much corporate purpose was felt among America’s largest companies in those days. For better or worse—almost certainly better—it’s hard to imagine a company of the likes of Texaco getting religion on a geopolitical conflict to the degree they did not so long ago.

Do you want to talk a bit about that arc? Is it that once World War II kicked in the executive branch wasn’t going to allow companies to play these sorts of games?

The US is schizophrenic in our relationship to geoeconomics. We have a bit of collective amnesia on how comfortable we used to be in exercising geoeconomic power—right up until roughly Vietnam. The first two hundred years of our country’s history, it was something we did routinely and proudly.

You do see a certain formalisation that comes about with World War I. With the US’s entry into World War I, Wilson signed on to a sanctions regime and began zealously enforcing it — quite a U-turn considering that, right up until joining World War I, we were avowedly asserting our neutral rights to trade. In fact, the US’s insistence on its neutral trading rights, even as it was clearly heading into the war itself, nearly ruptured the US-British alliance. Yet, as soon as we joined the war, Washington was not only enforcing these embargoes very enthusiastically, but pushing them further — and even threatening Scandinavian countries for asserting the same kind of neutral trading rights that we had been espousing right up until we joined the war. This does seem to be quite innovative when pressed on geoeconomics, but by and large, we see the US’s high watermark happen right after WWII, and — with the important exception of sanctions — it has been a fairly steady decline since.

Interview by Jordan Schneider

August 11, 2016

Five Books aims to keep its book recommendations and interviews up to date. If you are the interviewee and would like to update your choice of books (or even just what you say about them) please email us at [email protected]

Support Five Books

Five Books interviews are expensive to produce. If you've enjoyed this interview, please support us by .

Jennifer M Harris

Jennifer M Harris

Jennifer M Harris is a senior fellow at the Council on Foreign Relations. Prior to joining the Council, Harris was a member of the policy planning staff at the U.S. Department of State responsible for global markets, geo-economic issues and energy security. Alongside Robert Blackwill, she has recently authored War by Other Means: Geoeconomics and Statecraft.

Jennifer M Harris

Jennifer M Harris

Jennifer M Harris is a senior fellow at the Council on Foreign Relations. Prior to joining the Council, Harris was a member of the policy planning staff at the U.S. Department of State responsible for global markets, geo-economic issues and energy security. Alongside Robert Blackwill, she has recently authored War by Other Means: Geoeconomics and Statecraft.