Economists, argues Samuel Huntington in the debate with Christopher Layne.and Robert Jervis about for the United States, are blind to the fact that economic activity is a source of power as well as well-being. It is, indeed, probably the most important source of power, and in a world in which military conflict between major states is unlikely, economic power will be increasingly important in determining the or subordination of states.1 What economic policies will in fact foster the pursuit of American primacy that Samuel Huntington seeks? What economic policies would, in contrast, lead to the redistribution of power in favor of America's rivals, complete with the hostility and antagonism of earlier big power struggles, that Christopher Layne fears? What, in short, is the economics agenda best suited for neorealists? Is there a special policy path, perhaps built around strategic trade theory, for those who wish to pursue relative gains at the expense of mutual gains, or political power at the expense of economic welfare? An economics agenda for neorealists should address three principal dangers to America's position in the international political system that emerge directly from U.S. economic policy: a persistent imbalance in trade and capital accounts, which mortgages the assets of future generations or turns over the assets of the current generation to foreigners; a lagging competitiveness of firms and workers, which undermines the growth rate and skill level of the nation's industrial base (and other sectors) in comparison to rival states; and a growing dependence on outsiders for critical products or technologies, which leaves the nation vulnerable to denial or manipulation by external suppliers.
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