The Future of the Dollar
U.S. Financial Power Depends on Washington, Not Beijing
In her confirmation hearings, U.S. Secretary of State Hillary Clinton said, "America cannot solve the most pressing problems on our own, and the world cannot solve them without America. . . . We must use what has been called 'smart power,' the full range of tools at our disposal." Since then, editorial pages and blogs have been full of references to "smart power." But what does it mean?
"Smart power" is a term I developed in 2003 to counter the misperception that soft power alone can produce effective foreign policy. Power is one's ability to affect the behavior of others to get what one wants. There are three basic ways to do this: coercion, payment, and attraction. Hard power is the use of coercion and payment. Soft power is the ability to obtain preferred outcomes through attraction. If a state can set the agenda for others or shape their preferences, it can