April 14, 2015
New York University business professor Daniel Altman has abeef with U.S. foreign policy. It’s wasteful, inefficient, and haphazard. But in rushing to find an optimal solution to Washington’s foreign policy woes without properly framing the problem, Altman ignores the time-honored role of other state and non-state actors’ choices as inputs to Washington statecraft. Altman’s column is not as much an example of how economic thinking can help foreign policy as it is a case in point in how economists often find foreign policy and national security resistant to the simplifying assumptions that they take for granted.
Altman, surveying foreign policy circa 2015, thinks that existing schools of foreign policy thought have it all wrong. Rather, an unemotional economist looking at it from a mathematical modeling framework called “constrained optimization” could do better. Given a set of constraints and a desired quality to be maximized or minimized, how should a decisionmaker make optimal decisions? Altman’s complaint harkens back to a long tradition of mathematical decision models in business, economics, industrial operations, computer algorithms, and the military called optimization problems. For readers that struggle at supply and demand curves, a simple demonstration follows.
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