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By William R. Nester (auth.)

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The demands of nationalism, mass politics and ideology shape a nation's foreign policy in ways that often conflict with a pure power politics orientation. States with similar power endowments may have completely different foreign policies. A state's foreign policy reflects the interaction of its domestic political, economic, and cultural system with the international environment. " This determines the way a policymaking elite interprets and interacts with the world. 5 1 T h e rise of the democratic industrial state brought a shift from a "high politics" emphasis on military security issues to a "low politics" emphasis on welfare; geoeconomic interests have eclipsed geopolitical interests in importance for most democratic states.

Less is more. Why? According to liberal theory, individual consumers and producers, not the state, should be the primary economic units. The needs and wants of consumers and skills of producers vary considerably, and everyone should be free to consume and produce what they want. Goods are demanded by consumers and thus created by entrepreneurs who realize they can profit by that demand. Government simply gets in the way of these natural forces of supply and demand. 28 Liberalism, Neomercantilism and the New World Order Government's economic role should be minimal not only within but between states.

T h e difference between these two systems concerns the means that are used to advance state interests. 48 Although geopolitical and geoeconomic systems differ greatly in the way power is massed and utilized, success in both systems depends on governments skillfully entering a virtuous circle of power and wealth. States in a territorial system enhance their power and wealth through military aggression, by using force to maximize their self-sufficiency in population, natural resources and land, which in turn is mobilized into an ever stronger military.

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