Great Industrial Power Rivalry: Jake Sullivan’s Security Dilemma
When scholars analyze the relative power of states, they tend to look first at military and economic power, especially industrial power, and perhaps adding resource endowments, demographics, and features such as warm-water ports at a later stage. The non-military aspects tend to be subordinated to the military ones: industrial production of warplanes is more important than production of toys; resources such as oil and iron are more important than timber now that warships are not made from wood; warm-water ports are important not for winter fishing but for the projection of naval power. This analytical tilt toward military power makes a rough sense. When great powers clash, the hard-power victory will come first, before the soft-power one.
But the US-China rivalry is upending the typical modern ways of understanding major-power conflict that emerged after 1800. The definition of “strategic” industry is expanding daily. In just a few years, it has come to include pretty much anything having to do with micro-electronics and digital communication. The crucial change has been that states no longer worry just about industries or technologies that have clear military applications. They now worry about industries that might possibly be relevant to military power and therefore to national security. The classic “security dilemma” taught at universities — that actions taken by a state to increase its own security cause reactions from other states, which in turn lead to a decrease rather than an increase in the original state’s security — is now being applied, in practical terms, to a growing share of certain national economies. More and more resources, from human capital to video apps to venture capital, are becoming “strategic.”
This is a new world, one that multinational businesses have begun to notice but are hardly ready to face.
If one wanted to ascribe this gradual “securitization” or “militarization” of major economies to the actions of individuals, two come to mind. The most obvious and the most important is the President of China, Xi Jinping. However, the National Security Advisor of the United States, Jake Sullivan, has also played a key role in shaping this fundamental change.
Xi Jinping’s “Made in China 2025” program, which was launched in 2016, was and is an attempt to make China as self-sufficient as possible. The alliance-building of the “Belt and Road” Initiative, the weaponization of Chinese ethnicity outside China, the opportunistic use of non-Chinese intellectual property and foreign investment, the “nine-dash line” drawn to encompass resource-rich seas, and much else all point toward the same goal: a China self-sufficient enough that it can say no to the rest of the world if it likes, especially to the United States. Chinese autarky makes little sense in terms of the social science of economics, but then mainstream economics since Adam Smith has never known quite what to make of security-driven economies, except to say that they are inefficient and probably lead to war. Furthermore, China is run by Marxists, for whom mainstream economics is seen as at most a useful tool-kit for struggle rather than a gospel of human development.
China’s weaponization of its own economy under Xi Jinping has made the security dilemma economy-first rather than military-first. That choice has caused a security reaction from the United States, one that certainly does seem to be causing a decrease rather than an increase in the original state’s security.
The US reaction is where Jake Sullivan comes in. It is true that the hardening of US economic policy toward China began during the Trump years, mainly because of the Trump administration’s focus on national economic greatness. The theory of great-power conflict, rescued from history books by Trump’s security team as a framework to constrain an inexperienced and mercurial Commander in Chief, also preceded Biden’s presidency. But the Biden administration has developed its own theoretical framework for foreign policy that reconfigures, refines, and solidifies the tendencies first seen in the Trump years.
Jake Sullivan was the young and well-liked Director of Policy Planning at the State Department under Hillary Clinton and President Obama. In the Trump years he was head of a program at the Carnegie Endowment for International Peace that aimed at developing a “foreign policy for the middle class.”
American political culture — for good reasons and with great success — has tended to see anything that benefits the middle class as positive. The nurturing of a middle class has been among the greatest achievements of American democracy. Nonetheless, the deliberate rooting of national security policy in the fortunes of a particular social and economic class is something rather new for a non-Marxist and non-aristocratic society.
The reasons for this shift are many. Probably the most important has been the perception that liberal or neoliberal policies, grounded in a theory of market fundamentalism and globalization, led to a hollowing out of the American middle class accompanied by the expansion of a global middle class, mainly in Asia. This in turn has led to an erosion in working-class and middle-class support for the Democratic Party, something that the Biden administration naturally hoped to reverse. A foreign policy for the middle class is part of that effort.
The results have been onshoring and friend-shoring and the leveraging of US market access and security guarantees in the service of creating a US-centered global economy that serves US interests first, but without the traditional prop of free trade. It is “Make America Great Again” in a Democratic key.
This is the context in which electric-vehicle manufacture, to mention just one example, with all the supply chains that feed into it, has become a national-security policy priority.
Whether this choice will, in the emerging logic of our 21st-century economic security dilemma, ultimately make the United States less secure is not an easy question to answer. What is clear is that multinational enterprises, or any enterprises dependent on globalized supply chains and open markets, need to look not only at policy manifestations — the Inflation Reduction Act or the Chips and Science Act — but also at the deeper political logic that drives them.