Economic Power

6 Key excerpts on "Economic Power"

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  Regional Powers and Regional Orders

  • Nadine Godehardt, Dirk Nabers, Nadine Godehardt, Dirk Nabers(Authors)
  • 2011(Publication Date)
  • Routledge

    (Publisher)

  Size alone (of a country or of a company) is not adequate; also necessary are ‘intelligence, readiness to respond, and efficiency in translating decisions into action’ (Kindleberger 1970 : 56). Based on this, Kindleberger defines power as follows: ‘Power is the strength plus the capacity to use it effectively’ (Kindleberger 1970 : 65). According to Kindleberger, the exercise of power includes a nation’s display of economic productivity and mobility. The advantage for the leadership is being the first to enjoy the fruits of research, which in turn gives the leader the capacity to transform. Kindleberger’s contribution on regional power is therefore characterized by the terms public goods and capacity to transform, with which the relational dynamics of these interconnections are highlighted. Susan Strange (1975) bases her structural power concept on the heterodox perspective of international political economy. She assumes the power of states and the role of transnationally active Non-Governmental Organizations. According to her concept, Economic Power is exercised on four levels (Strange 1975 : 222). Rich countries and their governments influence the structure of the global economy through the pattern of their investments, production, trade and consumption. They establish the framework for minimum standards for the maintenance of stability, order and law in the global market economy. National governments exercise Economic Power through the formulation of national laws (for factors of production, credit and markets). The government with the biggest domestic market and the largest number of multinational businesses (that are important in the driving of global production) possesses the greatest Economic Power. Buyers and sellers, creditors, and debtors affect economic transactions at the operational level. Economic Power is thus always the result of a bargaining process; that is, it is relational. Technology and hegemony According to Richard R

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  Geo-economics and Power Politics in the 21st Century

  The Revival of Economic Statecraft

  • Mikael Wigell, Sören Scholvin, Mika Aaltola, Mikael Wigell, Sören Scholvin, Mika Aaltola(Authors)
  • 2018(Publication Date)
  • Routledge

    (Publisher)

  Blackwill and Harris fail to properly explain the geo-dimension, too. They try to distinguish between geo-economics and geopolitics, arguing that the latter ‘explain[s] and predict[s] state power by reference to a host of geographic factors (territory, population, economic performance, natural resources, military capabilities, etc.)’. Geo-economics, meanwhile, is ‘a parallel account of how a state builds and exercises power by reference to economic factors’ (2016, p. 24). First, economic factors somewhat confusingly appear in both definitions. What is more, economic performance and military capabilities are not geographical factors. Unless one maintains that everything is geographical because everything is located somewhere, geographical factors are limited to place-specific features – a mountain range that serves as a natural barrier against military invasions, or vast energy resources that constitute the fundament for economic prosperity, for instance. Whenever such factors are taken into consideration in explanations of foreign policy and international relations, it can reasonably be argued that geo-economics and geopolitics (instead of economics and politics) are analysed. Before returning to these thoughts, the next section provides an overview of approaches to geo-economics that do not stand in the Luttwakian tradition.

  Non-Luttwakian approaches to geo-economics

  Some publications that may run under the label of geo-economics are much less related to power politics than Luttwak’s own work, or not at all. Scholvin and Draper (2012), as well as Scholvin and Malamud (2014), concentrate on the impact of material structures in the geographical space on Brazil’s and South Africa’s respective regional economic relations. Käpylä and Mikkola (2016) explain that geographical conditions induce states to cooperate in the Arctic, because open confrontation would risk everyone’s economic objectives. As a side note, this concept of geo-economics – geographical conditions shaping economic outcomes – equals the understanding of geopolitics historically held by geographers, who thought of geopolitics as political outcomes shaped by geographical conditions (Scholvin 2016).

  Others relate geo-economics to the rise of new actors that matter for economic and political dynamics beyond the national scale. For instance, Barton (1999) argues that while the era of geopolitics was about hegemonic states and stability in international relations, the era of geo-economics is marked by highly flexible non-state actors and borderless transnational relations. Mercille (2008) suggests that while businesspeople act according to a geo-economic logic, the logic behind the actions of politicians is geopolitical. From a slightly different perspective, Cowen and Smith (2009) suggest that the assemblage of territory, economy and people under the authority of nation-states – key criteria of the era of geopolitics – is being recast, mainly because territorial borders have lost the defining role they used to play for the economy and society. The era of geo-economics is marked by global production being more and more segmented, which comes along with the rise of transnational enterprises as key actors. Security threats such as terrorism are also not bound to territorial borders.

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  Great Power Politics in the Fourth Industrial Revolution

  The Geoeconomics of Technological Sovereignty

  • Glenn Diesen(Author)
  • 2021(Publication Date)
  • I.B. Tauris

    (Publisher)

  2 The geoeconomics of technological sovereignty: Managing diffusion Introduction

  Technology is power. Governments develop technologies out of a desire to establish leadership and the fear of being left behind. Technological leadership has historically been of utmost importance in great power politics, but has traditionally focused on military technology. Since the development of nuclear weapons, military innovations have reached a level of destructiveness that fundamentally alters the cost–benefit calculations of pursuing foreign policy objectives by force. Technology also augments Economic Power. This has resulted in great power competition shifting from the military to the economic sphere because increased economic connectivity between states heightens the potential for economic statecraft. Geoeconomics means that control over markets becomes the source of power, as opposed to merely exerting control over territory and military power.

  Geoeconomics is based on the assumption of realist theory that international anarchy cannot be transcended. In the absence of a world government, states are the highest sovereign force and must compete for power to survive in the international system. Geoeconomics, therefore, rejects the fundamental assumptions of liberal economic theory because trade and broader economic connectivity are conducted primarily to advance relative gain – that is, to elevate one’s own Economic Power above others. Economic interdependence does not enable states to overcome international rivalries. Rather, economic interdependence can be used as an instrument of power for competition. Interdependence implies that states lose some autonomy while gaining influence. Economic interdependence is, however, rarely symmetrical and states strive to develop asymmetrical dependence to maximize both their autonomy and influence. For example, Laos is economically very dependent on China and therefore loses much of its autonomy to Beijing, whereas the reverse is to at all the case.

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  Evolving Regional Economies

  Resources, Specialization, Globalization

  • Martin Henning(Author)
  • 2022(Publication Date)
  • Agenda Publishing

    (Publisher)

  So far, there is still a geographical interaction cost associated with this, whether it is a traditional transportation charge or a loss of information. Also, geography is actually not only about physical distance but about the institutions and power relations that influence how different places link to each other too. There are different forms of “proximities” apart from geographical proximity – cognitive, organizational, social and institutional – that relate to geography in different ways and affect the outcomes of economic transactions in space (Boschma 2005). 2. During globalization, economic activities take place in particular localities for a reason, and regions specialize. This means that regions often develop distinct production profiles or even clusters. It is common that regions become widely associated with their economic specialties. Silicon Valley (IT), Hollywood (film and entertainment), the City of London (financial activities), Ingolstadt (automobiles), Nagoya (air and aviation industries) and Bangalore (IT services) are just some of the well-known regional specializations. Apart from these, there are thousands of less famous regional specializations across all economies. There is a reason for that, or actually several. Places are still important. 3. Some regions have a difficult time escaping their economic past. The Ruhr area in Germany, for example, once the industrial heartland of the European continent, has struggled to remain relevant in a time of deindustrialization and a growing service economy. Much the same goes for old industrial regions in the UK, the USA, Scandinavia and eastern Europe. Places, or rather what they contain, seem to matter not only “now” but for the “future” too. These examples suggest that we need to consider space and place if we want to understand how the economy unfolds over time and how that affects people. This is true in a globalized economy too

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  Japan's Economic Power and Security

  Japan and North Korea

  • Christopher W. Hughes(Author)
  • 2013(Publication Date)
  • Routledge

    (Publisher)

  The second conception of economic security policy is that concerned with the protection of a state in the event of an actual conflict, the first subdivision of which is designed to defend against deprivations of welfare and the possible adverse effects upon social and political stability. Direct Economic Power clearly plays a key role in this policy because it allows states to marshal and redistribute effectively their economic resources in order to weather the effects of political, economic, or military security crises. Indirect power also plays a role, as the weight of a state's economy and the diversity of its connections in the international economic system allow it to procure economic resources from alternative sources. Thus, the US has been able to overcome the impact of the oil shocks since the 1970s due not only to its ability to open up new sources of energy, but also because of its central position in global energy markets which forces producers to deal with it on favourable terms.

  The second subdivision of economic security policy in the event of a conflict makes the state the imposer of economic costs in order to force other states to desist from a course of action which is perceived to be threatening, and direct Economic Power assumes the most prominent role in this policy. Direct Economic Power allows a state to manipulate economic resources and impose negative economic sanctions such as embargoes. However, indirect Economic Power is also likely to increase the ability of a state to mobilise direct Economic Power, as with the example of the US's efforts to use its dominant position within the international financial system to impose punitive sanctions on Iranian capital following the 1979 revolution.

  Vulnerability and the factors determining the effectiveness of Economic Power

  As has been mentioned above, the effectiveness of the deployment of Economic Power in the service of security policy hinges upon the depth of economic links between states and the known benefits of these, or by inverse definition the degree of actual or potential costs that may arise from damaging or failing to initiate economic links. Complex interdependence theory and the concept of vulnerability can be used to help explain degrees of economic cost and the effectiveness of Economic Power in altering the behaviour of states.16

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  Economic Geography

  Past, Present and Future

  • Sharmistha Bagchi-Sen, Helen Lawton-Smith, Sharmistha Bagchi-Sen, Helen Lawton-Smith(Authors)
  • 2006(Publication Date)
  • Routledge

    (Publisher)

  objective is to identify future research agenda. Contributors highlight what they see as the challenges for understanding contemporary issues, thus putting down markers for younger researchers to take the lead on.

  The appeal of economic geography at the AAG conference was demonstrated by the size and diversity (students and faculty from a variety of sub-disciplines within geography from several nations) of the audience, as well as the participation from the audience, during the sessions. Contributors agreed that the impact of economic geography within and beyond geography had been constrained in the past by its own limitations. Some argued that the ‘mindless’ data crunching and modelling of the 1960s and 1970s that marked the ‘quantitative revolution’ was the beginning of the end of geography’s appeal to wide audiences. Others argued that the failure to engage policymakers is another reason why economic geography, more so in the US than the UK, does not have a wide reaching influence in other social sciences or business. All recognized that both quantitative as well as qualitative methodologies are important. All argued for the need of rigour in training as we prepare a new generation of economic geographers. As a synthesizer of many disciplines and a field, which offers immense synergy in bringing together ideas and practices from other social sciences, humanities, law and business, economic geography is and should be an important component of geography pedagogy from undergraduate/freshman year through doctoral training. As many of the contributors point out, economists such as Krugman and Porter have received enormous public and academic attention and have been influential in stimulating a critical appraisal of the ‘economic’ within geography from within the discipline as exemplified in this book.

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