Home » Money » Geoeconomics

Geoeconomics

In a world connecting in new ways, it logically follows that some nations are working with great clarity and unity to make use of these connections for political goals. It is also reasonable that new tools for connecting the methods and message of these tools can be found to increase understanding and transparency for this process.

The book War by Other Means: Geoeconomics and Statecraft by Robert D. Blackwill is important for many reasons, primarily in how it describes how economics can be used to move forward the political goals of developing nations. It is, however, very dense and at times difficult to follow. It is also, as its title suggests, centered on the Industrial National model of a previous generation.

Thank goodness the most relevant parts of this have been brought forward in a fabulous youtube production that is less of a TED talk and more of a quick graduate class.

Videos can be a good way to connect to new ideas.

If you are unfamiliar with youtube, you may have heard terrible things about it. Much of that is deserved, as it is indeed a home for presentations serving up the most dangerous and plain crazy nonsense. This runs from racist crap to detailed explanations as to why the earth is flat, among many other topics. No, I will not provide links.

But there is other very good stuff there as well.

This video is thirty minutes long and extremely dense. It moves quickly through a subject which reasonably could be an entire graduate level course in economics. But it is very much worth it if you are interested in understanding geoeconomics, or how economics can be bent to pursue geopolitical aims.

There are some issues with the presentation in my own mind. For one, it does not present a broader perspective on the stages of development that nations logically go through in order to achieve what we in the developed world consider a modern market based economy. There is an assumption that a national industrial policy, something akin to what developed nations had between 100 and 50 years ago, is necessary to lift a nation through the march of technology.

This is only reasonable, of course, but it’s an assumption that should be stressed.

The world is connected. The answer is out there.

More importantly, the reasons for pursuing geoeconomic strategies are left up to the viewer to contemplate. The book from which it was taken does largely presume that it is about pursuing geopolitical power or enhancing the prestige and security of nations. It is entirely possible to see this from the perspective of People’s Economics, where the purpose of a nation is to serve its people and little more.

Indeed, one of the great assumptions left unsaid is that before pursuing any of these strategies, it is first essential to look a a population as much more than a lot of mouths to feed and to begin looking at them as an undeveloped resource, talents and drive waiting to be realized with the correct nudge.

Did you get our jobs?

There is some discussion of how dangerous it is to have a national industrial policy, particularly with respect to the amount of capital that is allocated through central planning rather than market forces. A discussion of this process, really a tangent to this presentation, is probably essential.

This only works for less developed nations who are relying on known technologies which can be quickly implemented, providing return on the capital employed quickly. Developed nations are going to find it much more difficult to implement such geoeconomic strategies for growth or dominance simply because their risk is considerably higher.

It’s largely the converse of the old adage, “It’s easier to become number one that to stay number one.”

As a gateway to understanding the world today, however, this video is priceless. It explains how in a world otherwise defined by open markets there is a place for such wholesale intervention. It increases an understanding of how nations rise in stages, expounding on the now relatively antique and thus incomplete analysis of Marx.

Mao is always watching. Is he, though?

The process has many perils, as shown by some of the nations which have applied it. For example, Japan has not been able to move to the next level in part because of the structures it acquired during its phase of rapid growth – rather than abandon them, it finds itself necessarily maintaining them to the detriment of its own population. South Korea has yet to hit that wall, but we see a frenzied population running ragged and likely to face social upheaval and demographic peril in the near future.

Which naturally brings us to China. Without consistent rule of law and a modern system for generating its own internal capital, thus realizing the fruits of its own investment, the problems are very obvious. The flight of capital for these reasons continues to cause disruptions all around the world. And given the size of China and the geopolitical reasons to not allow it to rise in the way Japan or South Korea did, there are problems ahead without a doubt.

What matters here is an understanding of the process and perils that come with geoeconomics, or the process of using economic goals for geopolitical gain. When these are applied for the benefit of the people of a nation, which is indeed the root of the entire process, amazing things happen. Yet that is rarely the entire goal, and it is a goal easily lost sight of in the dazzle of a vibrant and connected economy.

Watch this. It’s important.

Advertisements

One thought on “Geoeconomics

Like this Post? Hate it? Tell us!

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s