We’re well aware of the role of economics in our daily affairs and in the aggregated domestic affairs of our country.  The quality of our economy directly relates to our and to our nation’s prosperity.  But what is the role of economics in our foreign and defense policies?  Our economy is no less critical there.

General George Marshall once said

The only way human beings can win a war is to prevent it.

A successful economy plays a role in this prevention through a number of pathways.

The role of economics in foreign policy

Included among the paths is the ability to aid our allies, our friends, and those who wish to leave their current orbit and if not align with us, at least to begin to chart their own independent course.  A strong economy makes this possible.  The surplus from that can fund support for those nations struggling to get free of their current restraints—both their own and those from foreign domination.  Our strong economy, through the trade relationships our businesses create, can aid other economies as they struggle through their own recessions—and their resulting stronger economies can, through those same trade relationships, then aid our own in similar circumstance.

Another path is through the capacity to support the economic development (and through that, the social and political development) of less fortunate nations, both those in the developing world and those whose development has been stunted by being trapped under foreign domination—the follow-on condition of those nations just broken free.  Our economic strength here is especially useful in guiding the political and social development of these nations as well as their economic evolution.  By aiding these nations to develop as democracies with free market economies, we not only help them to find their own strength and prosperity, we deny the nations of tyranny the resources they need for their aggression, and we push those tyrannies back from our own shores.  This also is facilitated by our very success at home, which demonstrates the superiority of our economic methods.  As above, this is possible only from our own economic surplus.

A third path is to work with nations that are committed to the principles of free enterprise, and of freedom generally (which collection will overlap greatly, but are not coincident with, the group comprising our friends and allies), to strengthen all of us economically and politically and thereby to build, further, a bulwark against those tyrannies, who otherwise would become tempted to test us in battle, and perhaps win.

A fourth path is as a magnet for immigrants who want to come here share in our success—economically, to be sure—that’s the proximate magnet—but also our success politically and culturally.  These immigrants are a prime source constant renewal for us, in energy and in problem-solving.

The role of economics in defense policy

A strong economy creates the ability to fund, conduct R&D for, and equip our national defense system.  Without a successful national defense system, we very quickly will have no economy to defend, no nation to defend.

A strong economy enables the next step—the ability to fund the actual use of our national defense system, which usage is by its nature destructive of that system and which destruction must be replaced during the conflicts and after them.  Yes, we will be tested in battle, even though the means of testing will evolve, as the events of 11 Sep 2001 and after have demonstrated.

A strong economy gives us the wherewithal to preposition equipment and supplies near flash points.  These are, to be sure, targets, but they’re useful in the power projection phase of conflicts, and they can be useful in delivering quick reaction forces to the flash location(s) when they start to ignite.

A strong economy creates the ability to help other nations develop their own defense capacity: arms support, arms development support, and so on.  Such defense arrangements also can support economic success in the recipient nations: a common constituent of arms sales agreements is the assembly of purchased weapons in the buying nation’s factories, which represents employment for the citizens of those nations.

Related to the above, a strong economy facilitates reciprocal R&D agreements with our allies and friends.  This leads to greater commonality of key supply items, which simplifies the logistic problems inherent in coalition war.

A strong economy facilitates our maintaining a force with the technology and the numbers to enable us to hold open the world’s sea lanes.  This, by itself, creates a virtuous circle: free and easy transport of trade goods over the world’s waterways facilitates free trade, which leads to greater prosperity and stronger economies for all concerned, which leads to increased free trade and an easier time maintaining and improving those forces guarding the sea lanes.

Notice, too, that all of this adds up to a forward defense of our nation so as to minimize the likelihood that the initial, critical blows of a conflict land in our homeland.

In the end, the very success of our economy—our evident prosperity and freedom—serves as an empirical example of the rightness of our way of life.  It becomes a magnet drawing other nations to our methods, or at least to try them, it draws other nations to send their sons and daughters to our universities, where they not only will learn the academics of our institutions (whether economics, or science, or engineering, or philosophy, or…), but simply by being here through much of their formative years, these students also will learn the American way of life through immersion in it.

Moreover, our free market, capitalist economy, founded on individual liberty, individual responsibility, and individual ownership of property—our bodies and our real and our intellectual property—is what gives us the moral strength and the prosperity to constantly grow, to steadfastly maintain our freedom, to aid others, whether our neighbors or those wanting out from under.