Story by Will Chappell
A new Cold War has begun. As Ukraine’s war with Russia stretches into a second week, the response of the international community has made it clear that the United States and her allies have decided to revert to a thirty-year-old dynamic. Sanctions have come pouring in from European and other close US allies from around the world, targeting Russians’ access to international banking, trade and travel, seizing Russian government dollar reserves and freezing the assets of private citizens for good measure.
Again, as a couple weeks ago, I am left wondering what our goal is here. Despite the media once again falling in line with President Biden’s State of the Union in claiming that these sanctions will undermine Putin in Russia and possibly lead to his ouster, I don’t follow this logic.
Most importantly, although these sanctions will undoubtedly have a drastic effect on the Russian, American and global economies, Russia is far from in complete isolation. China and India, the two most populous nations in the world, as well as longtime US allies, Israel, Mexico and the UAE have forgone implementing sanctions on Putin. This leaves Russia with substantial international markets for its oil and other commodities. Both Russia and China also have alternatives to the Society for Worldwide Interbank Financial Communication (SWIFT) that are less developed, but clearly conceived with a situation such as this in mind.
Which leads to what should be the second question anyone imposing these sanctions should ask: will they work? The consensus seems to be that the Russian public and oligarchs,
furious at their lack of access to the west and its consumer goods will quickly grow tired of Putin and either oust him or pressure him to conclude the war in Ukraine.
The history of US sanctions offers little precedent suggesting this is the course events will follow. The best case demonstrating western economic pressure leading to the fall of a regime would have to be the United Soviet Socialist Republics. Without access to western markets, capital and technology the USSR’s economy eventually collapsed leading to the fall of the communist government. There is certainly truth in that narrative. But it ignores the fact that the Soviet Union chose not to engage with capitalist economies on ideological grounds, making the western imposed sanctions somewhat redundant. It also took 70 years for the Soviet Union to collapse, and I would argue that the failures of communism as an economic system and inept leadership were the true causes of the collapse. If our strategy to deal with Putin is to follow this playbook, I would suggest we search for a more expedient answer.
Beyond the case of the USSR, our sanctions regimes have a nonexistent track record of effecting regime change. The United States imposed an embargo on Cuba more than 60 years ago but the communist government begun by Fidel and Raul Castro is still in control of the island. Iran has been the target of draconian sanctions since the Islamic Revolution there in the 1970s, but the government remains the same. North Korea has been excluded from trade with the west for 70 years dating to the end of the Korean War. It has certainly caused the people of the country to suffer mightily, but Kim Jong Un, the grandson of the founder of the ruling dynasty still rules while being chauffeured in a fleet of Mercedes Benzes.
Even looking at the current conflagration with Russia, it seems clear that sanctions have little effect. The United States has been imposing escalating sanctions on Putin and other
Russians for over a decade now but still we have this war. The plain truth of the matter is that the leadership and elite of countries can plan for and weather even the most draconian of sanctions while the common people suffer. History suggests that this suffering is unlikely to cause an overthrow of the regime we believe the affected citizenry should be blaming, and if anything increases hostility towards the sanctioning countries.
All of that to say, I’m not sure what the plan is for the US and her allies. By initiating this economic war that Putin must have seen coming it seems we have simply chosen to continue the backslide into the Cold War. Maybe there is a comfort in the familiarity of that dynamic for some, but it seems an ill-advised plan to me. History suggests that we will hurt ordinary Russians for decisions in which they had no part with little prospect of helping anyone or affecting positive change.
