The economic element of power is the leveraging of a nation’s wealth to influence the behavior of others. The more global the world’s economy becomes, the more important the use of economic power becomesand the more effective.


Unlike the ideological conflicts that dominated the world throughout the entire 20th century, economic concerns now tend to dominate decisions and priorities. A nation can choose a variety of methods in applying economic power. Liberal or restrictive trade policies can open up or deny markets to the other nations of the world. Restricting odious foreign organizations from raising money from US sources or forbidding US companies from doing business with state sponsors of terrorism are two currently used economic tools. U.S. decisions concerning the changing of financial policy, which not long ago would have primarily impacted the U.S., now impacts the entire world. The loosening or tightening of the U.S. money supply has enormous worldwide implications.


The United States has long used foreign aid to entice other nations into taking actions favorable to U.S. interests and applied economic sanctions against enemies of the United States in attempts to influence the behavior of “unfriendly” nations.












Historically, the effectiveness of the economic instrument of national power has been mixed at best – particularly in cases of dealing with dictatorships or rogue states. In these cases, the withdrawal of foreign aid or the application of economic sanctions often failed to impact the intended targets. A nation’s population might have been impacted, but normally the leadership can continue to operate.


The fact that so many other countries, especially China, are often willing to do business with global “bad actors” often undermines the application of US economic power. It is rare that foreign governments changed policy based on the application of US economic power alone, but in combination with the other instruments of national power, economics can be a very effective tool.

Frank Gaffney, Jr.
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