ECONOMIC INSTRUMENTS, MILITARY INSTRUMENTS, AND NATIONAL POWER

Several propositions are widely accepted as characterizing the post-Co ld War era. These propositions include: 1. Economic interests, issues and instruments are increasingly important in international affairs. 2 . Military issues, interests and instruments are becoming less importa nt. 3. US national power, especially economic power, has declined rela tive to that of other countries. 4. This decline has been due to overe mphasis on military issues, and reversal of the decline depends on foc using more on economic issues and economic policies. Some of these pro positions are more valid than others, and all of them suffer from the ambiguous terminology they employ. This article is principally concern ed with clarifying some of this terminology, suggesting various ways o f measuring the terms that are used, and proposing several hypotheses about the relationships and interactions among the terms and concepts. The article also contains some observations about the shortcomings of several of these preceding propositions. The central thesis is that e conomic and military instruments of power are often closely linked, ra ther than being independent of each other, that the relationships betw een them are often complex and subtle, and that these relationships va ry in different contexts. To be effective, economic power and economic instruments of power sometimes complement military power and military instruments, and at other times and in other circumstances substitute for them. To clarify these complex relationships, the article begins by suggesting various indicators or metrics for defining and measuring economic instruments of power, and the military instruments of power. It is acknowledged in the article that the political and diplomatic i nstruments of power are also of central importance, although these are not the focus of the present discussion. Having proposed several metr ics, three hypotheses about the relationships among them are formulate d: first, that national power depends on economic instruments, militar y instruments, and a set of other shift variables; second, economic in struments in a given period depend on their level in the preceding per iod, as well as on the level of military instruments and a set of othe r influential economic factors; and third, the level of military instr uments in a given period depends upon their level in the preceding per iod, the current level of economic instruments, and a set of other con ditioning political, as well as economic and military, variables. Fina lly, several examples are cited of how economic instruments can be use d, in conjunction with or as a substitute for military instruments, to influence the behavior of various actors in the international arena.