Scholars have historically defined “economic warfare” in negative terms—as an attack by one state or states against the economic and military power of a target. Resurrecting and inverting an alternative “economic warfare” conceptualization proposed by the economist Robert Loring Allen in 1959, I argue that American Cold War “economic warfare” is best understood as a series of attempts by the United States to increase its political, military, and economic power relative to the Soviet Union through a variety of negative and positive initiatives. These approaches remain components of American economic warfare today.
I outline three signature features of U.S Cold War-era economic warfare. First, it presumed that Soviet power could be diminished indirectly through initiatives focused on third countries. Second, it included the establishment of new trade-creating ties with communist countries, not just trade-destroying tactics. Third, it eventually made use of multilateral engagement, not just bilateral arrangements. These features made American economic warfare against the Soviet Union compatible with more idealistic policy objectives, despite the emotionally charged nature of the term. I suggest that U.S. officials pursued greater East-West trade for a mix of reasons, including humanitarian assistance, to broaden and deepen the reach of liberal trading norms, to cool East-West tensions, to encourage Eastern European independence from Moscow, and to diminish the global appeal of Soviet communism, among other objectives.
The notion of “positive” economic warfare is counter-intuitive, and I will focus exclusively on that sub-topic. My primary intervention will be interpretive. I will present a revised history of U.S. East-West trade that explains how trade was intended to contain Soviet power. I will present a four-part taxonomy of different positive economic warfare types, adapted from international relations theory. And I will present a theory explaining what determined the effectiveness of these tactics.