A Business Approach to Foreign Policy

Reuters today is describing what it thinks will be in the U.S. President’s speech tomorrow on foreign policy with Russian and China.  People who specialize in this topic will not like what he has to say, probably for the wrong reasons.  That is because he has a business approach to it.

In big business, entities can compete without necessarily fighting.  The President will say that Russia and China are competitors, and are trying to maximize their economies at our expense.  At the same time, they are expanding their territories by seizing land and water claimed by other countries.  Business generally ignores this kind of government activity, focusing on the areas where business can be done. Be friends with the leaders of these countries and work at what works, even though there are political disagreements.  Sure, businesses take territories from one another all the time, but a long-term strategy can get those territories back.  The objective always is to maximize the business without getting into a fight that will hurt profitability in all competing businesses.

In this model, Russia and China are not enemies, determined to destroy the United States.  They are competitors whose business interests are at odds. I would not agree with that view.  The Russians and Chinese both interfere with the U.S. political system, in different ways.  This would be like having the Board of SAIC, in China, undermining the Board of General Motors with proxy fights and stock maneuvers to influence how General Motors does business abroad.  Maybe they do that too, but it isn’t apparent one way or another.   Incursions into the undermining of U.S. political processes, the military, and intelligence capabilities are analogous to direct interference in the operations of General Motors, which businesses generally do not do.  They know that is a two-edged sword.

North Korea is the best example of where such a strategy fails.  NK wants to cloud the dealings by threatening to destroy General Motors and kill large numbers of its workers.  That doesn’t work very well with this model.  It is not behavior that can be tolerated and Russia and China seem to want to let it go on because it is destabilizing.  If we are going to be competitive and not enemies, then North Korea (and Iran too) have to end their nuclear ambitions.  They are neither one playing the game the way this strategy suggests.  Russia and China can stop them both anytime they want.  The fact that they haven’t suggests they are not just competitors.