Geoeconomics (sometimes geo-economics) commonly refers to analytical frameworks used to assess the strategic spatial properties of national economies or the economic means of statecraft of particular territories in relation to others. Geoeconomics also serves as a strategic discourse and practice in foreign policy, where it is primarily informed by realist and mercantilist traditions. It emphasizes how states can leverage economic power, financial networks, and supply chains to pursue national interests, influence other countries, and shape global order. However, geoeconomics lacks a universally agreed definition, and its usage varies across academic, policy, and journalistic contexts. Some see it as an alternative framework to geopolitics, while others treat it as a complementary or subordinate approach. The coining of geoeconomics and the distinction of geoeconomics from geopolitics has long been falsely attributed to Edward Luttwak, an American grand strategist and military consultant, who popularized the term at the end of the Cold War. Yet, as historical research has shown, there have been numerous attempts to establish geoeconomics as a distinct field of research, a foreign policy tool, and a political program since the beginning of the 20th century, particularly in Germany and the United States. The first comprehensive elaboration of geoeconomics dates back to 1925 and was published by the German national-conservative writer Arthur Dix.
Historical Overview While the term "geoeconomics" rose to prominence in the 1990s, particularly through Edward Luttwak's writings, its conceptual roots trace back to the early 20th century, only a few years after Rudolf Kjellén coined the term geopolitics. The history of geoeconomics reveals a long-standing interest in articulating the spatial and strategic dimensions of economic life, often in parallel with or in response to geopolitical reasoning. One of the earliest comprehensive treatments of geoeconomics was developed by German national-conservative writer Arthur Dix in a 1925 monograph. Dix explicitly framed geoeconomics as a complement to geopolitics, arguing that political geography alone could not adequately explain or direct national economic development. His vision included systematic surveys of global energy and trade flows to inform economic statecraft. However, Dix's work never gained the traction that geopolitics did. As geopolitician Karl Haushofer noted in 1928, geopolitics proved far more compatible with the popular press and the emerging strategic cultures of the interwar period. In the same era, Wilhelm Röpke—later a member of the Mont Pelerin Society—argued that the term "economic geography" was too narrow to account for the full complexity of spatial-economic conditions. If business cycles constituted the temporal object of political economy, he wrote, then a spatial correlate was needed. He proposed that "geoeconomics" could address those phenomena "characterized by a horizontal-geographic relationality and boundedness to the physically, historically, sociologically, and politically conditioned variegations of space." In the United States, geoeconomic thinking also emerged before World War II. In 1919, American geographer Whitbeck proposed the foundation of a "science of geonomics" to study spatial economic patterns as a guide for national development. In 1941, Geologist Richard Field advocated for geoeconomics as a peaceful alternative to "geowar," emphasizing resource control and international cooperation. In 1943, Lewis Lorwin explicitly contrasted "geo-economics" with "geo-politics," arguing that economic rather than territorial thinking should underpin the emerging postwar world order and United Nations policy. During the Cold War, geoeconomics was used sporadically, including in curricula at the Industrial College of the Armed Forces in Washington, D.C. The school described geoeconomics as "an analysis of the position of American economy in relation to the economies of other nations." Following Luttwak's popular 1990 essay, it was only in the post-Cold War era that the term "geoeconomics" entered widespread use. Institutions such as the Council on Foreign Relations (through its Greenberg Center), the Atlantic Council, and the Institut Choiseul began to promote geoeconomics as a strategic framework in foreign policy. These efforts framed geoeconomics primarily around the use of trade, finance, investment, and sanctions as tools of statecraft. In a 2024 retrospective commentary, Edward Luttwak acknowledged that his original formulation of geoeconomics was offered without knowledge of its earlier usages.
"The logic of conflict in the grammar of commerce" Luttwak argues that the same logic that underlies military conflict also pertains to international commerce:
States seek to collect as much in revenue as their fiscal codes prescribe and are not content to let other states tax commercial activity in the former's purview. This is a zero-sum game. States predominantly regulate economic activity to maximize outcomes within their own borders, rather than for a disinterested transnational purpose, even when the outcome is suboptimal for other states. The logic of state regulation then conforms, in part, to logic of conflict. States and blocs of states strive to restrict their payouts and services to their own residents. Moreover, states design their infrastructure projects to optimize domestic utility, regardless of how other states are affected, as opposed to the transnational utility. States or blocs of states promote technological innovation to maximize benefits within their own boundaries, rather than for the sake of innovation itself.
Geoeconomics vs. geopolitics The challenge of separating geopolitics and geoeconomics into separate spheres is due to their interdependence: interactions among nation-states as indivisible sovereign units exercising political power, and the predominance of neoclassical economics "logic of commerce" that ostensibly separates market dynamics from political power. The following descriptions of geoeconomics indicate the challenge of distinguishing it from the field of geopolitics:
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