The transition toward “smart power ” requires constant adjustment to the balance between hard and soft power . Changing geopolitical and economic contexts necessitates a regular reassessment of what tools of power are used and how they are applied, especially in the information age, in which change happens at increasingly break-neck speeds.

In her confirmation hearings, U.S. Secretary of State Hillary Clinton said, “America cannot solve the most pressing problems on our own, and the world cannot solve them without America…We must use what has been called ‘smart power,’ the full range of tools at our disposal.” Since then, editorial pages and blogs have been full of references to “smart power.” But, what does it mean?

“Smart power” is a term I developed in 2003 to counter the misperception that soft power alone can produce effective foreign policy. Power is one’s ability to affect the behavior of others to get what one wants. There are three basic ways to do this: coercion, payment, and attraction. Hard power is the use of coercion and payment. Soft power is the ability to obtain preferred outcomes through attraction. If a state can set the agenda for others or shape their preferences, it can save a lot on carrots and sticks. But, rarely can it totally replace either. Thus, the need for smart strategies that combine the tools of both hard and soft power.

In an otherwise estimable new book, Power Rules: How Common Sense Can Rescue American Foreign Policy, Leslie Gelb argues that “soft power now seems to mean almost everything” because both economic and military resources can influence other states. (Gelb’s recent article in these pages, “Necessity, Choice, and Common Sense” [May/June 2009], is drawn from the book.) But, Gelb confuses the actions of a state seeking to achieve desired outcomes with the resources used to produce those outcomes. Military and economic resources can sometimes be used to attract as well as coerce–witness the positive effect of the U.S. military’s relief efforts in Indonesia following the 2004 tsunami on Indonesians’ attitudes toward the United States. This means that many different types of resources can contribute to soft power, not that the term “soft power” can mean any type of behavior.

In his book, Gelb defines power too narrowly, as “getting people or groups to do something they don’t want to do.” He ignores a long literature on the other facets of power that are used to persuade others to do what is in fact in their own interests. As U.S. President Dwight Eisenhower put it, leadership is about getting people to do something “not only because you tell them to do so and enforce your orders but because they instinctively want to do it for you.” Sometimes that is possible, and sometimes not, but it is certainly an important aspect of power. Even if soft power is rarely sufficient, it can help create an enabling or disabling context for policy.

The major elements of a country’s soft power include its culture (when it is pleasing to others), its values (when they are attractive and consistently practiced), and its policies (when they are seen as inclusive and legitimate). Over the past decade, public opinion polls have shown a serious decline in the United States’ popularity in Europe, Latin America, and, most dramatically, the Muslim world. Poll respondents have generally cited the United States’ policies, more than its culture or values, to explain this decline. Since it is easier for a country to change its policies than its culture, U.S. President Barack Obama should focus on choosing policies that can help recover some of the United States’ soft power.

Of course, soft power is not the solution to all problems. The fact that the North Korean dictator Kim Jong Il likes to watch Hollywood movies is unlikely to affect his country’s nuclear weapons program. And U.S. soft power got nowhere in drawing the Taliban government away from al Qaeda in the 1990s; it took hard military power in 2001 to end that alliance. But, broader goals, such as promoting democracy, protecting human rights, and developing civil society, are not best handled with guns.

Contextual Intelligence

In 2007, former U.S. Deputy Secretary of State Richard Armitage and I co-chaired a bipartisan commission at the Center for Strategic and International Studies that helped popularize the concept of smart power. It concluded that the Pentagon is the best-trained and best-resourced arm of the government, but that there are limits to what hard power can achieve on its own and that turning to the Pentagon because it can get things done will lead to an overmilitarized foreign policy. Gelb criticizes us in Power Rules for “a mechanical combining rather than a genuine blending of the two ideas,” but we never proposed a mechanical formula for smart power. Figuring out how to combine the resources of both hard and soft power into smart power strategies requires what I call “contextual intelligence” in my book The Powers to Lead. In foreign policy, contextual intelligence is the intuitive diagnostic skill that helps policymakers align tactics with objectives to create smart strategies. Of recent U.S. presidents, Ronald Reagan and George H. W. Bush had impressive contextual intelligence; the younger Bush did not.

Academics and pundits have often been mistaken about the United States’ power. Just two decades ago, the conventional wisdom was that the United States was in decline, suffering from so-called imperial overstretch. International relations theory at the time suffered from a materialist bias that truncated conceptions of power and ignored the full range of factors that can influence behavior through attraction. This is what I tried to recover in 1990 with the idea of soft power.

A decade later, with the Cold War rivalry over, the new conventional wisdom was that the world was characterized by unipolarity and U.S. hegemony. Some neoconservative pundits drew the conclusion that the United States was so powerful that it could decide what was right and others would have no choice but to follow. This new unilateralism heavily influenced the George W. Bush administration even before the shock of 9/11 produced the Bush doctrine of preventive war and coercive democratization.

Contextual intelligence must start with an understanding of not just the strengths but also the limits of U.S. power. The United States is the only superpower, but preponderance does not constitute empire or hegemony. The United States can influence, but not control, other parts of the world. World politics today is like a three-dimensional chess game. At the top level, military power among states is unipolar; but, at the middle level, of interstate economic relations, the world is multipolar and has been so for more than a decade. At the bottom level, of transnational relations (involving such issues as climate change, illegal drugs, pandemics, and terrorism), power is chaotically distributed and diffuses to non-state actors.

Military power is a small part of any response to these new threats; these necessitate cooperation among governments and international institutions. Even at the top level (where the United States represents nearly half the world’s total defense expenditures), the U.S. military may be supreme in the global commons of air, sea, and space, but it is much less able to control nationalist populations in occupied areas.

Contextual intelligence is needed to produce an integrated strategy that combines hard and soft power. Many official instruments of soft power—public diplomacy, broadcasting, exchange programs, development assistance, disaster relief, military-to-military contacts—are scattered across the U.S. government. There is no overarching policy that even tries to integrate them with hard power into a comprehensive national security strategy. The United States spends about 500 times as much on the military as it does on broadcasting and exchange programs. Is this the right proportion? And how should the U.S. government relate to the generators of soft power in civil society—including everything from Hollywood to the Bill and Melinda Gates Foundation?

Success in the Information Age

Despite its numerous errors, the United States’ Cold War strategy involved a smart combination of hard and soft power. The U.S. military deterred Soviet aggression, while American ideas undercut communism behind the Iron Curtain. When the Berlin Wall finally collapsed, it was destroyed not by an artillery barrage but by hammers and bulldozers wielded by those who had lost faith in communism.

In today’s information age, success is the result not merely of whose army wins but also of whose story wins. The current struggle against Islamist terrorism is much less a clash of civilizations than an ideological struggle within Islam. The United States cannot win unless the Muslim mainstream wins. There is very little likelihood that people like Osama bin Laden can ever be won over with soft power: Hard power is needed to deal with such cases. But, there is enormous diversity of opinion in the Muslim world. Many Muslims disagree with American values as well as American policies, but that does not mean that they agree with bin Laden. The United States and its allies cannot defeat Islamist terrorism if the number of people the extremists are recruiting is larger than the number of extremists killed or deterred. Soft power is needed to reduce the extremists’ numbers and win the hearts and minds of the mainstream.

The United States can become a smart power by once again investing in global public goods—providing things that people and governments in all quarters of the world want but cannot attain on their own. Achieving economic development, securing public health, coping with climate change, and maintaining an open, stable international economic system all require leadership from the United States. By complementing its military and economic might with greater investments in its soft power, the United States can rebuild the framework it needs to tackle tough global challenges. That would be true smart power.