The New Wealth of Nations

This essay was originally published in Foreign Policy on December 3, 2025.

Capital and statecraft have always been connected. But since the dawn of modern capitalism, the world’s overall wealth and average human welfare have risen dramatically. And so too has states’ access to capital and their willingness to deploy it to achieve political ends—a trend that is particularly strong during periods of rapid economic growth, technological change, and great-power rivalry. Today, policymakers are treating geo-economics as a national security issue, putting investments behind their geopolitical strategies through sovereign wealth funds, national champions, and public-private partnerships.

Call it the rise of instrumental capital: the use of state-directed funds to pursue the dual mandate of generating financial returns and projecting state power. This capital is patient, long-term, and aligned with the domestic and international agendas of world leaders. How countries invest is, increasingly, how they compete. In this new paradigm, governments are more than regulators of markets; they are now among the most consequential asset owners and allocators of capital in the global economy.

Read more in Foreign Policy.