IN MY youth, I was taught that economics comes in two forms: the free market and socialism.
There are hybrids of the two, such as market socialism or free market welfare statism, but in general these two are the options people were given.
To choose the free market is to be with the “Right” and to be Socialist (and all its variations, including Marxism) is to be with the “Left”.
Despite their differences, both of these systems were given moral dimensions. If you were against the free market, you are against freedom, liberty and individualism, its proponents might argue, and if you were against socialism, you are a heartless fat cat who greedily preys on the poor or a stupid hick who votes against his own interests.
Both the free market and socialism are treated as ends in themselves, rather than what all economic systems actually are: tools.
Such tools can be used to create prosperity, military power, technological advancement or whatever the government decides is best for the interests of the country given existing constraints. It basically asks the question, what is Gross Domestic Product (GDP) for? What is our prosperity for?
And this is where economic statecraft comes in. In contrast to the free market and various types of socialism, both of which have built-in ideological assumptions, economic statecraft is defined by geopolitical interests, allies and enemies and security interests.
For example, how much oil and steel will the Philippine need to maintain an army of 100,000 in the field?
If the Philippines has a trade war with a neighbor, which parts of the economy are most vulnerable? If the Straight of Malacca is blockaded, which of our industries are most at risk?
You can’t answer these kinds of questions ideologically, which is what traditional free marketers and socialists do.
In contrast, economic statecraft is pragmatic, applying whatever works to specific problems. Both the United States and China are doing this right now, despite their ideological veneers. Other countries are doing the same.
