In the past foreign policy mainly consisted of adjusting relations between states – what they will do with or to each other. Now foreign policy mainly consists of adjusting the domestic policies of different states – of what they will do with or to their own people.
It is a simple argument, but if fully understood its ramifications are significant. It is commonplace to read that America is going through a period of retrenchment, with a focus on domestic policy. But the same could be said of other major powers, including China, India, Japan and all of Europe. Yet today foreign policy need not recede. Instead, foreign policies should focus on how to harmonise “domestic” policies.
Domestic, of course, is often just the national face of an essentially global system. Moves to save global capitalism, for instance, change nominally domestic matters, like bank capital adequacy or fiscal policy. But take the point further: the most pressing concerns of global firms, beyond formal trade rules, are issues like government procurement, competition policy, product safety rules and intellectual property law.