Monday 20 Aug 2018 | 01:13 | SYDNEY
Monday 20 Aug 2018 | 01:13 | SYDNEY

The return of geo-economics


Mark Thirlwell

This post is part of the Globalisation and war debate thread. To read other posts in this debate, click here.

24 May 2010 08:36

This post is part of the Globalisation and war debate thread. To read other posts in this debate, click here.

Thanks to the IISS I was able to attend last week's inaugural Bahrain Global Forum, the first IISS Geo-economic Strategy Summit.

The idea of the meeting was to bring together politicians, business people, economists, strategists and others to think about how shifts in international financial and economic conditions were affecting local, regional and international relations, and to analyse the overlap between economic and strategic thinking. I think this is a good idea.

One feature that made the event particularly interesting for me was the explicit focus on 'geo-economic' issues. That term seems to have originated with an article by Edward Luttwak that first appeared in the National Interest in 1990. Back then, Luttwak argued that the waning of the Cold War was reducing the importance of military power relative to 'commercial logic'.

Luttwak did not think that 'World Politics' would simply be replaced by 'World Business', however. Instead, he suggested that the result would be the emergence of geo-economics, or 'the logic of war in the grammar of commerce', since commercial forces would still be operating in an environment dominated by states and blocs of states. 

The more general but related idea that countries could be thought of as companies competing in global markets became a popular theme during the 1990s, albeit to the annoyance of some prominent economists.

After being — briefly — fashionable during the 1990s, the term geo-economics largely dropped out of use. Now it seems to be making a comeback, at least in the looser sense of the entanglement of international economics, geo-politics, and strategy. 

It's this general theme of spillovers across disciplines that I find intriguing, not least because one of the things that the Lowy Institute tries to do is precisely to look at these kinds of linkages between our various research programs.

I can think of at least five reasons why geo-economics looks like an interesting way to think about the world again. I'll explore those in a follow-up post later today.

Photo by Flickr user elycefeliz, used under a Creative Commons license.