ABSTRACT
This chapter explores the basic assumptions of geoeconomic theory, the use of economic statecraft to create favourable symmetry in economic interdependence and surveys the geoeconomic rise of the West. Geoeconomics derives from different strands of economic statecraft developed in response to contemporary realities. Mercantilism was an early form of geoeconomics by using state power to establish staple ports and expand overseas colonies, to which rival powers were forbidden access. Economic liberalism has historically veiled economic nationalism by the dominant power. Once a dominant position has been established there are greater incentives to preach the virtues of economic liberalism. Britain rose to dominance with government intervention in industries and the mercantilist policies advocated by James Steuart. Excess labour and capital could be directed towards urban manufacturing, providing Britain with a lead in the race to industrialise. Washington was concerned about asymmetrical interdependence as Europe had little dependence on the US, while the US was extremely reliant on European goods and banks.
