Economic Statecraft and US Foreign Policy

Reducing the Demand for Violence

Leif Rosenberger

• Publisher: Routledge
• Year: 2019
• Print ISBN: 9781032239835
• eBook ISBN: 9780429649172
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Explaining the connection between economics and violent extremism, this book argues that American foreign policy must be rebalanced with a greater emphasis on social inclusion and shared prosperity in order to mitigate the root causes of conflict.

Rosenberger argues that economic coercion has usually proven counterproductive, and that a militarized American foreign policy too often results in frustration and strategic failure. He analyses this theory through a number of case studies, from the Treaty of Versailles to the more recent issues of Israel in Gaza, US sanctions against Iran, the US backed, Saudi-led boycott of Qatar and Donald Trump's trade war against China. He concludes that the economic logic of social inclusion and shared prosperity demonstrated in Jean Monnet's European Coal and Steel Community would be a more successful strategy in reducing the demand for violence in the civil wars in Afghanistan, Iraq, Yemen and Syria.

This book will be of particular relevance for courses on American Foreign Policy, International Relations and International Political Economy and seminars on the Near East and South Asia. Professional economists, diplomats and military officers in America and in the Near East and South Asia will also find the argument useful.

1 Introduction

A few years back, Robert Zoellick, former President of the World Bank, wrote an article that became a classic, praising a US foreign policy tradition which had been deeply infused with economic logic for its first 150 years.¹ Zoellick then argued that after the start of the Cold War, Washington marginalized economics in the global war against communism. In the process, Robert D. Blackwill and Jennifer M. Harris note, Washington too often reached for the “gun instead of the purse.” Not surprisingly, the systematic use of economic instruments to accomplish geopolitical objectives (or what Blackwill and Harris call “geo-economics”) became a lost art.²

The attacks on the World Trade Center in New York City and the Pentagon in Washington, D.C. on 11 September 2001 triggered another global war, this time against terrorism. Would Washington keep marginalizing economics? To answer this question, one needs to separate thoughtful discussion from foreign policy action.

In terms of thoughtful discussion, the answer is clear. Three years after the 2001 attacks, the 9/11 Commission issued a report which underscored the need to address the negative underlying economic conditions that fostered violent extremism. In fact, of the 27 recommendations of the report, only one can be seen as advocating the use of military force. Former Deputy Secretary of State Richard Armitage notes that the US has exported the anger and fear of their citizens, not their vision of hope and opportunity. He suggests that the US needs to foster economic opportunity and hope for a better life if the global war on terrorism is to achieve anything but tactical successes.³

The 9/11 Commission’s Report says that

When people lose hope, when societies break down, when countries fragment, the breeding grounds for terrorism are created… Backward economic policies and repressive political regimes slip into societies that are without hope, where ambition and passions have no constructive outlet.⁴

Spreading prosperity, while not a silver bullet, does help in combating violent extremism. Conversely, poverty and illiteracy are easy prey for violent extremists to exploit.

But terrorism was not the only cause for concern back then: Full blown wars were also breaking out, most of them were civil wars. In academe, speculative political debates broke out regarding the root causes of civil wars.⁵ Thankfully, a definitive World Bank statistical study came out in 2003, with the finding that civil wars were heavily concentrated in the poorest countries. It therefore follows that poverty increases the likelihood of civil war. In other words, elevating economics in American foreign policy would be a logical approach in reducing the number of civil wars globally.⁶

Thus, the World Bank and the 9/11 Commission were mutually supportive of one another. The World Bank research showed that the root cause of civil wars was the failure of economic development. The 9/11 Commission Report recommended addressing the economic conditions that fostered violent extremism. But this was rhetoric, not action. American foreign policy was still militarized and out of balance. Douglas Lovelace, former Director of the Strategic Studies Institute at the US Army War College, notes that “The administration of President George W. Bush was frequently accused of favoring the use of unilateral military power over multilateral diplomacy and development as the primary tool of American national security.”⁷ And when Donald Trump became president, former General Martin Dempsey and former Admiral Michael Mullen, two former chairmen of the Joint Chiefs of Staff, voiced their concern that having too many generals and admirals in the highest US national security positions could lead to the over-militarization of US national security policy.⁸

President Obama took office in 2009 with a different mindset from President Bush. He said he wanted to rebalance American foreign policy, away from what he felt was an over-reliance on the military toward greater reliance on diplomacy and development. If one looks at his rhetoric and National Security Strategy documents from 2010 and 2015, it’s clear that the Obama administration favored diplomatic solutions over military ones. For instance, years of negotiations between the US and Iran resulted in both sides signing an agreement in July 2015 to restrict Iran’s nuclear program. President Trump, however, subsequently withdrew from the agreement in 2018.

While President Obama deserves some credit for his rhetoric in his speeches about the need to rebalance American foreign policy, US Army War College Professor John Deni says the tragedy of the Obama administration is that Obama failed to rebalance American foreign policy. Deni says there is plenty of evidence showing that US foreign policy remained militarized. The most obvious indicator was federal spending. Deni’s research indicates that the international affairs expenditure (which includes money for diplomacy and development) remained a small fraction of what the Pentagon was spending throughout the eight years of the Obama administration.⁹

What is the effect of marginalizing diplomacy and development? As the Chief Economist at the US Central Command (CENTCOM) and the US Pacific Command (PACOM) for almost two decades, I too often saw the White House (regardless of party) squandering peaceful foreign policy opportunities. I saw the US stuck in its economic coercion mindset, never seriously considering creative opportunities to use diplomacy and economic actions to mitigate the risk of drought, migration and social unrest, which ultimately led to humanitarian crises and civil war in places like Syria. As US Major General John Campbell, the top Commander of US military forces in Afghanistan, said in 2011, “We can’t kill our way out of Afghanistan.”¹⁰ In other words, a militarist approach won’t work as a way to produce peace and stability in Afghanistan. In essence, the militarized approach simply counters violent extremism with more violence. It deals with the symptoms of conflict rather than the economic root causes. At best, it produces short-lived tactical and operational military victories, ultimately leading to frustration and strategic failure.

We should always honor the sacrifices that US military members make to keep America free. Unfortunately, I will argue that civilian hawks in Washington too often rush to judgment and needlessly put our brave men and women in harm’s way. Members of the Army National Guard and Reserves are redeployed over and over again. Later, we will see how the creative economic statecraft and efforts at creating shared prosperity of the Marshall Plan and the European Coal and Steel Community would help prevent unnecessary US military casualties and deaths.

The top positions in the US national security arena need to be filled by people who can connect the dots. We need generals and admirals who already understand the social, economic and political conditions that have an impact on the demand for violence. Too often, generals and admirals only consider kinetic solutions. Instead, they must understand the importance of social and political inclusion and shared prosperity.

One of the few generals I worked for who can do this superbly is David Petraeus. Petraeus is one of the most decorated US generals since World War II, but what makes him different is that he holds a PhD in International Relations from Princeton University, and he taught economics at West Point.

His ability to connect all the socio-economic, political and military dots opens his eyes to non-violent ways in which to resolve conflicts. He was the author of the US counterinsurgency doctrine that advocated living with the locals and winning hearts and minds.¹¹ Petraeus does believe that there is a time and place for kinetic courses of action, but thankfully, to him, endangering the lives of his troops was an option of last resort.

The time has come for Washington to seriously consider rebalancing American foreign policy. This book asks the questions: What if America pursued a rebalanced foreign policy? What if it actually tried to address the negative underlying socio-economic conditions which increase the demand for violence, terrorism and civil wars? What if it put more emphasis on social inclusion, which, in turn, tracks with what Martin Dempsey, former Chairman of the US Joint Chiefs of Staff, and Berkeley Professor Ori Brafman talk about in their book Radical Inclusion: What the Post-9/11World Should Have Taught us About Leadership.¹²

Too idealistic? President Harry S. Truman once said, “The only thing new in the world is the history you do not know.” If we think back to the Treaty of Versailles, it’s clear that victors of World War I came up with a punitive peace. French Prime Minister George Clemenceau wanted revenge, to make Germany pay for the wartime damage it (and the Central Powers) had done against Allied Powers, like France, during the war. Clemenceau got his economic coercion. Heavy reparations were used to keep the German economy down and punish Germany for its bad behavior. Clemenceau assumed that a weak economy would also keep the German military weak. How did Clemenceau’s economic coercion work? A collective German resentment of these economic sanctions arguably aided the increase in the socio-economic demand for violence and, in turn, contributed to the rise of Hitler and World War II.¹³

Professor Ulrich Krotz at the European University Institute in Italy points out that relations between France and Germany have gone through three grand periods since 1871: “hereditary enmity” (up to 1945), “reconciliation” (1945–63) and the “special relationship” embodied in a cooperation called Franco-German Friendship (since 1963). Given the fact that the French and Germans had fought each other for centuries and had developed this hereditary enmity towards each other,¹⁴ was Clemenceau’s economic coercion against Germany inevitable? After World War II, the statesman Jean Monnet argued that it was not. Jon Meacham, author of The Soul of America, would argue that people can and do change if you give them a chance to find their better angels.¹⁵

In this regard, Monnet looked for common ground and social inclusion between the French and German people. In his strategic vision, French and German businessmen would work together and build a European Coal and Steel Community. Common bonds among businessmen would spread to the rest of the French and German populations, and help turn longstanding enemies into friends.

Did Monnet appear naïve and hopelessly idealistic? Possibly. But appearances can be deceiving. Monnet showed that a web of economic interdependence and social inclusion could lead to shared prosperity and a more durable peace than more short-sighted economic coercion. In other words, shared prosperity would reduce the demand for violence and thus lower mutual threat perceptions – not a bad way to keep the peace in Europe for 70 years.

Like Monnet, US Secretary of State George Marshall felt it was important to help Germany and the rest of Western Europe rebuild their factories and enjoy shared prosperity with America, rather than resorting to the ill-fated Clemenceau’s economic coercion of Germany.

Of course, World War I and World War II were wars fought among nation states. That raises the question: Are the approaches of Monnet and Marshall regard...

Table of contents

• Cover
• Half Title
• Series Page
• Title Page
• Copyright Page
• Dedication Page
• Table of Contents
• About the author
• 1 Introduction
• 2 Iraq
• 3 Afghanistan
• 4 Yemen
• 5 Syria
• 6 Gaza
• 7 Iran
• 8 Qatar
• 9 Lebanon
• 10 Turkey
• 11 Trump and China
• 12 Taiwan
• 13 Bangladesh
• Conclusion
• Index