Passion Struck with John R. Miles
Edward Fishman on Economic Warfare: The New Age of Power Dynamics | EP 577
Tue, 25 Feb 2025
In this episode of Passion Struck, host John R. Miles welcomes Edward Fishman, a former top State Department sanctions official and author of the groundbreaking book Choke Points: American Power in the Age of Economic Warfare. The conversation delves into the evolving landscape of global power dynamics, where economic tools such as sanctions, export controls, and financial dominance have become the primary instruments of statecraft in the 21st century.Fishman explains the concept of "choke points," which refers to critical areas in the global economy where one country holds significant leverage, allowing it to exert influence without military intervention. He discusses how the U.S. has pioneered the use of economic warfare, particularly in response to the rise of authoritarian regimes in Russia and China, and the implications of this shift for international relations.The episode explores the historical context of economic warfare, the ethical dilemmas faced by policymakers, and the potential consequences of overusing economic power. Fishman emphasizes the importance of understanding these dynamics as nations navigate a fractured global economy, where the competition for resources and influence is increasingly defined by economic rather than military means.Full shownotes here: https://passionstruck.com/edward-fishman-on-the-new-age-of-power-dynamics/Key takeaways:Factors contributing to the rise of economic warfare include:The hyper-globalization of the 1990s leading to economic interdependence.Political shifts post-9/11 that made military action less appealing.The resurgence of great power competition, particularly with Russia and China.The implications of sanctions and economic tools, emphasizing their dual nature as both offensive and defensive strategies.The ethical dilemmas associated with economic warfare, particularly the humanitarian impact on civilian populations.The potential for a fractured global economy, with nations becoming isolated economic deserts due to competing economic blocks.The importance of maintaining economic security and the risks of over-reliance on economic sanctions are emphasized.The dangers of a chaotic global economy where only great powers set the terms, potentially leading to military conflicts.Connect with Edward Fishman: https://www.energypolicy.columbia.edu/edward-fishman/Sponsors:Factor Meals: http://factormeals.com/factormeals50off and use code “FACTOR MEALS 50 OFFRosetta Stone: Unlock 25 languages for life at “ROSETTASTONE.com/passionstruck.”Prolon: Reset your health with 15% off at “ProlonLife.com/passionstruck.”Mint Mobile: Cut your wireless bill to 15 bucks a month at “MINT MOBILE dot com slash PASSION.”Hims: Start your journey to regrowing hair with Hims. 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Check them out at passionstruck.com/starterpacks.Catch More of Passion Struck:My solo episode on The Science of Healthy HabitsMy episode with Ethan Mollick on the Impact of AI on Life and WorkCan't miss my episode with Robert Breedlove on the Hidden War on Financial FreedomCatch my interview with Jeffrey C. Walker On: The Criticality of Collaboration in Systems ChangeListen to my interview with Richard Dolan On the Importance of Financial Health in LifeIf you liked the show, please leave us a review—it only takes a moment and helps us reach more people! Don’t forget to include your Twitter or Instagram handle so we can thank you personally.How to Connect with John:Connect with John on Twitter at @John_RMiles and on Instagram at @John_R_Miles. Subscribe to our main YouTube Channel here and to our YouTube Clips Channel here. For more insights and resources, visit John’s website.Want to explore where you stand on the path to becoming Passion Struck? 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Chapter 1: How does China influence global telecom networks?
I'm most concerned about, and I cover quite a bit in the book, is the way in which China has its finger on global telecom networks. And this was really the reason why the first Trump administration started trying to bring Huawei down to size because Huawei was a Chinese company quickly dominating global 5G networks.
Even to this day, there's a lot of our telecom networks that are dependent on Chinese base stations and routers. I am concerned about China's ability to shut down our communications in a true break glass conflict scenario.
Welcome to passion struck. Hi, I'm your host, John R. Miles. And on the show, we decipher the secrets, tips and guidance of the world's most inspiring people and turn their wisdom into practical advice for you and those around you. Our mission is to help you unlock the power of intentionality so that you can become the best version of yourself.
If you're new to the show, I offer advice and answer listener questions on Fridays. We have long form interviews the rest of the week with guests ranging from astronauts to authors, CEOs, creators, innovators, scientists, military leaders, visionaries, and athletes. Now let's go out there and become passion struck. Hey, passion struck fam. Welcome to episode 577.
Whether you're a longtime listener or tuning in for the first time, I am thrilled you're here. You're now part of a global movement dedicated to living with intention, unlocking your full potential and making what truly matters matter most.
So let me ask you, what if the most important weapons in today's world aren't missiles, tanks, or cyber attacks, but financial leverage, supply chains, and control over economic choke points? What if the future of global power isn't determined on the battlefield, but in boardrooms, central banks, and trade networks.
Today's guest, Edward Fishman, is here to unpack this seismic shift in global strategy. A former top State Department sanctions official, Edward has been at the forefront of America's economic warfare efforts, helping to design sanctions against Russia and Iran. Now in his groundbreaking book, Choke Points,
American Power in the Age of Economic Warfare, he takes us behind the scenes to reveal how economic weapons like sanctions, export controls and financial dominance are reshaping global power dynamics. In today's episode, we explore how economic warfare has become the primary tool of statecraft in the 21st century. What choke points are and why controlling them is the key to global influence.
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Chapter 2: What are choke points in economic warfare?
The hidden history of how the US pioneered economic weapons long before most of us even noticed. How Russia, China, and other nations are fighting back by building alternative economic systems. and the risks of overusing economic power and whether we're headed toward a fractured global economy.
If you've ever wondered how global conflicts are really fought today or how the economy itself can be weaponized, this episode is for you. Edwards Insights will challenge your understanding of power, security, and the invisible forces shaping our world. Before we dive in, let's take a moment to reflect on last week's incredible episodes.
On Tuesday, Randy Blight, the legendary Lamb of God frontman, joined me to talk about art, purpose, resilience, and the creative process. His journey from self-destruction to artistic mastery is one of the most raw and insightful conversations we've had on the show.
Then on Thursday, I was joined by my friend, Dr. Scott Schur, and we explored the cutting edge world of health optimization and did a deep dive on the GABA system and how it impacts brain function, stress resistance, longevity, and mental clarity, and why the future of health is about personalized proactive wellbeing.
Each of these conversations was packed with insights on transformation, resilience, and unlocking potential, and they tie directly into today's episode. Whether it's about redefining personal power, optimizing your health, or understanding global power shifts, intentionality is the common thread. And do you want to dive deeper?
If today's episode sparks your curiosity, check out our episode starter packs, curated playlists that explore topics like leadership, economic power, and resilience. You can find them on Spotify or at passionstruck.com slash starter packs.
weekly insights and strategies sign up for my live intentionally newsletter at passionstruck.com prefer watching these conversations head over to our youtube channels where you can catch all our episodes and share them with those in your life who are passionate about growth now get ready for a conversation that will change the way you see global power one that's playing out not just in war zones but in supply chains currency markets and cutting edge technology let's dive in with edward fishman
Thank you for choosing PassionStruck and choosing me to be your host and guide on your journey to creating an intentional life. Now, let that journey begin. I am absolutely thrilled to welcome Edward Fishman to the PassionStruck podcast. Welcome, Eddie. How are you today?
John, thanks so much for having me on. I'm doing great.
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Chapter 3: How did economic tools surpass military force in statecraft?
You also have a very significant part of the world's food supply that's going through that choke point every day. So throughout history, these choke points have really been thought of as geographic features.
But as you say, John, in the book, the choke points I'm talking about are really novel choke points and choke points that have developed only in the last 20 years or so in the wake of the hyper globalization of the 1990s. And these are economic choke points. These are parts of the global economy where one country has a dominant role and there's very little, if any, redundancy.
And so typically, if you go back even 20, 30 years and even thousands of years, the way that you would block a choke point like the Bosphorus was to take a Navy ship and park it right in front of it. You would need basically to use military force to stop ships from going through that choke point.
The novelty that we have today is a situation where the US and other countries, primarily the United States, can use these economic choke points in global supply chains and financial flows to cut off these physical trade flows just by using the stroke of a pen. So in that scene that you mentioned, in December of 2022, The U.S.
government, in addition to several allies in Europe and the Japanese government, imposed a price cap on Russian oil. And this all it really was a regulation issued by Washington, Brussels and a few other capitals. And overnight it blocked the Bosphorus.
So something that, you know, for thousands of years would have required the actual use of naval force to do today can be done by an official sitting behind her desk in Washington, D.C.
It is so interesting to me how your book really lays out how economic warfare has evolved into America's primary tool of statecraft. And what you were just describing is we now have these new weapons to fight wars. One of those is cyber warfare, which I'm very well familiar with because that's what I did in my career.
But we've also reached a moment where these financial weapons that you were just describing have taken precedence over military ones. How did we reach this point?
That's a great question. And the main thesis of my book, John, is that we're living in an age of economic warfare. Sanctions, tariffs, export controls, they have become the primary way that great powers like the United States and China compete with one another. And I think there are really three factors that led to this.
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Chapter 4: What role did Stuart Levy play in modern economic warfare?
I think what's happened, John, unfortunately, is that neither China nor Russia evolved in the way that we hoped and neither moved in a democratic direction. They both became increasingly authoritarian, increasingly aggressive, imperialistic in their objectives. And so what happened was in the 2010s, we saw
a situation in which we still had economic interdependence and geopolitical competition had come roaring back. So we lost our sense of economic security. And so the way I view that is we obviously, as the American people, want economic security. We don't want to feel like our livelihoods are dependent on the whims of Xi Jinping and Vladimir Putin.
And so the accumulation of restrictions like tariffs and sanctions and export controls is just a natural outgrowth of that, where the U.S. is trying to restore a sense of economic security that we've lost. And by the way, other countries are doing this too. The European Union has been imposing more tariffs and sanctions. China has. Japan has.
Japan even has a cabinet minister for economic security now. And Russia has too. So I think this is a global phenomenon we're seeing.
Because of what I did in the military, I have a lifetime ban of ever going to Russia. But I have been to China many times. And I have to say, the last time I was there, it was a profound change. I was in Beijing. And when I started going over there in the 2000s, we were welcomed. It was all about economic growth, everything else. When I was walking around Beijing the last time,
It was almost like the way we used to look at Russians in the old Soviet Union. I just felt like people were looking at me completely different and not in a necessarily friendly way. So it is interesting how much the world has changed and how the paths that we expected things to go down did not manifest itself.
Yeah, John, on that point, I can relate to it. One of the ironies about my own trajectory is I grew up loving Russian history and Russian literature and actually spent time in college living in Russia. And I've had friends there and felt very comfortable living there. I never felt threatened. I myself now am sanctioned by the Russian government.
So similar to you, I can never travel there, at least not for a very long time. So it's remarkable how much can change in a short period of time.
Yeah, it's unfortunate because when my sister was living there and she was fluent in Russian, she used to always just talk about how beautiful the country was, how wonderful and warm the people were. And it's one of those things that the more we should focus on the commonalities, we would understand that our differences are just so slight in the big scheme of things. Well, let's go on to this.
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Chapter 5: How does China's economic system challenge the US?
And I think with Levy and the campaign against Iran, there was, in that you had an adversary of the United States who had financed and bankrolled and supported terrorist groups around the world that had killed Americans who was actively pursuing nuclear weapons. So I do think Levy was justified.
So just early days into the Trump administration right now, but one of the things that we're already seeing is that the treasury is gonna play a major role over the next four years. And I wanted to get into this discussion of, Coming out of World War II, the US became the gold standard for the world.
In fact, we had a call where not only did we take Germany's gold, but we got the gold from a number of our economic partners in the war. And then under the Nixon administration, we ended up shifting from the gold standard to the fiat standard that we're on today, which kind of changed everything. And so the central bank and the treasury started to play this profound role.
And that role has lasted now for decades where the US has had the upper hand, but now we're starting to see the threat that China could bring by creating an alternative economic system and neutralize America's dominance. I was hoping you could touch on this and did I get the path correct?
You did, yeah. And I think one of the ironies that I draw in the book is this really pivotal moment in 1971 when Richard Nixon unilaterally takes the U.S. off the gold standard and says, you know what, the gold is no longer redeemable for, the dollar is no longer redeemable for gold at $35 an ounce. It's seen at the time as like the end of American economic dominance and the dollar is dead.
It's like the end of hegemony in a way. And of course, we look in retrospect, this is just the beginning of dollar dominance, because what winds up happening is when the dollar becomes untethered to gold and when you have the capital controls that had been so important for the Bretton Woods system breakdown, we have a global economy that becomes almost entirely dollarized.
So you get to a point where Even if it's two countries trading with each other, if it's India and Saudi Arabia trading with each other, they're almost certainly clearing that transaction in U.S. dollars, not in their home currency. And that's something that is enabled by the Nixon shock and by the fiat standard that you mentioned, John.
I think what's happening now is you do see a very significant challenge to American economic dominance by China. China is in GDP terms, so in terms of just the size of its economy, it is the closest we've ever had a peer competitor be in terms of being almost as big as the US economy, about 70%, 75% as large as the US economy.
China, theoretically, you think could have a currency that competed directly with the dollar. After all, China is the world's leading or is a leading trading partner for 120 of the world's countries. So about two thirds of every country of all the world's countries say count China as their top trading partner.
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Chapter 6: What are the consequences of sanctions on global markets?
And we've recently seen over the past few weeks that China has entered the AI arms race in a big way, taking on chat GPT. And for a long time, the US has been targeting China's semiconductor industry with sanctions aiming to slow its AI as well as some of its military technological advances.
Looking at what they have just done, how would you rate the effectiveness of the strategy and what does it tell us about the future of this tech-driven economic warfare we find ourselves in with China?
I'm glad you brought this up because just to loop back to the very beginning of our conversation about choke points. So I think the dollar and the US financial system is the most potent choke point in the global economy today that Washington controls. The second most potent, at least that we've thought, is the technology that goes into advanced microchips.
This is manufacturing equipment from places like firms like Applied Materials and Lam Research or EUV machines from the Dutch company ASML. And the theory had been that without access to those tools, China would always stay very far behind the U.S. in semiconductors. And as a result, without that computing power, they'd never be able to match the leading U.S.
AI labs in terms of how sophisticated their models are. What happened a few weeks ago, as you mentioned, is we saw a model out of China by a company called DeepSeq, a relatively small company. That seems to be at least in the same ballpark as the OpenAI models and anthropic models. Probably not quite as good, but in the same ballpark.
And they did have access to some NVIDIA, quite a few NVIDIA chips, high-end chips, because they bought these chips before the export controls went into effect. But certainly not as many, not to the same magnitude that the US labs have.
So there's a question, does this mean that the export controls are counterproductive because they've incentivized China to create basically a different way to advance through algorithmic innovation as opposed to hardware innovation? I think the answer to that is certainly this incentive has been created.
But you got to ask yourself, would DeepSeq's model be worse if they had unfettered access to NVIDIA chips? No, it would be a lot better, right? My own takeaway, and frankly, it's the takeaway of Dario Amodai, the CEO of Anthropic, who's come out very powerfully in favor of more export controls, is that
It's not the case that these export controls are going to keep us 10 years ahead of China, but they will give us a significant unfair advantage that if the American people use our ingenuity, use our entrepreneurial spirit, we should be able to keep a lead of a year or two over China. That doesn't guarantee anything, right? They still could leapfrog us through other means.
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Chapter 7: How is the US targeting China's semiconductor industry?
It's going to be a very interesting next few years. I'm just trying to take in everything that you're talking about, because what you're saying are the same things that are going through my mind on a weekly basis. So I want to make an interesting metaphor for you. I used to be a senior executive at Dell.
And for those who aren't familiar with how Dell has been organized over the years, they did this kind of accordion effect where they would globalize and then localize, globalize and then localize, meaning they would have global leaders over different areas like the consumer business.
And then they would switch to in-country leaders instead where that regional leader was running all practices for Asia-Pac and then they'd switch back. And it created these ripple effects that as a person in technology, I saw because we had this spaghetti architecture. And at the time I got there, 8,000 plus systems that were all doing repetitive things across this infrastructure.
So a whole bunch of spend and wastefulness that the company no longer needed. But the world is doing this as well. And it's interesting because when I was there, we had a number of different presidents over these business units.
And when I was there, they had switched back to, you had a person over consumer, a person over small, medium business, a person over public, a person over large enterprise, a person over services, a person over software. But the way that Michael would lead is all of them were in competition.
And so where I'm going with this is it causes these fractures within Dell, which really became economic fractures because all these presidents were competing against each other and their behaviors started to form economic blocks.
And I thought I'd introduce this whole topic using this analogy because with every major power weaponizing its economy, are we heading towards a future where the global economy fractures into competing economic blocks like I saw at Dell?
Well, I think your personal experience is actually, I think, relevant because I think we are seeing a similar phenomenon play out. in the global economy. The way I view it, John, is I think we really have three possible futures. And I'll handicap our odds of which one is most likely versus least.
So one is maybe we return the unfettered globalization of the 1990s, where we feel like we can have free and open trade with the China's and Russia's of the world, and it doesn't endanger our national security. I don't think this is particularly likely, frankly, because I think we have the great power competition trend I don't see abating anytime soon.
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