Economic Statecraft by David A. BaldwinReview by: William Diebold Jr.Foreign Affairs, Vol. 64, No. 4 (Spring, 1986), p. 875Published by: Council on Foreign RelationsStable URL: http://www.jstor.org/stable/20042706 .

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RECENT BOOKS 875

shows that partial measures (for example, the reduction of the American

budget deficit) will be inadequate to avoid a "hard landing" for the world

economy. To do "the right thing," the United States, Japan and the major countries of Western Europe will have to reverse their policies of recent

years. Some fascinating scenarios are drawn from a model, but even greater interest attaches to the author's judgments and his sharp observations

reflecting his nearly 30 years of work in the most sensitive spots of the OECD.

ECONOMIC STATECRAFT. By David A. Baldwin. Princeton: Princeton

University Press, 1985, 409 pp. $55.00 (paper, $12.50). This is a study of economics as an instrument of politics, and quite a

rigorous one. It begins with meticulous discussions of the means and ends of national policy and power, and the larger part of the book focuses on

economic sanctions. Here Professor Baldwin tears apart the reasoning of most other scholars and torpedoes not only the conventional wisdom about various cases but just about all generalizations. His emphasis on the unique circumstances in which each decision has to be made produces something less than a complete guide to foreign economic policy, but he reminds us

that Jefferson said "Ignorance is preferable to error." This is a stimulating book; one wishes it covered the whole range of foreign economic policy.

THE RISE OF THE TRADING STATE: COMMERCE AND CON QUEST IN THE MODERN WORLD. By Richard Rosecrance. New York: Basic Books, 1986, 268 pp. $19.95.

It is a familiar thought that nations cannot escape being concerned both with military power and welfare based on civilian pursuits and the interna tional division of labor. But the mix can vary. A survey of history and a

study of contemporary interdependence lead Professor Rosecrance of Cor nell to the conclusion that there is a strong movement toward emphasizing the benefits of trading and cooperation except on the part of the two

superpowers and some of the Third World. Even there he finds signs of a

shift, but one wishes he had dealt more rigorously with the connection between Soviet-American relations and the freedom of choice of other

countries, and with the nature of the power they acquire by being "trading states."

THE ZERO-SUM SOLUTION. By Lester C. Thurow. New York: Simon & Schuster, 1985, 404 pp. $18.95.

"The central task of the next quarter century is to regain American

competitiveness." To do that, according to Professor Thurow, requires action on investment, savings, education, antitrust, research and develop

ment, fairness in social policies, "a reconception of the theory of the American firm," the tax system, intervention in foreign exchange markets, and quite a few other things. American business management is given a

number of black marks and labor is told to be more cooperative. Although it is presented as a platform for the Democratic Party, this lively book is full of ideas that ought to be thought about by everybody.

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