Reasons For Restraining The Economic Weapon

By Michael Youhana

In March, Eric Levitz of New York Magazine published a widely read and lengthy critique of dovish policies promoted by the Democratic Socialists of America in response to Russia’s invasion of Ukraine.  Levitz’s sprawling challenge to the DSA’s proposals is thoughtful, and merits a rebuttal from those who support a more measured response to Russia’s war of aggression than the bellicose strategy adopted by the Biden administration. 

I am not offering a comprehensive rejoinder to the piece in this essay. Rather, I aim to reply to a specific question posed by Levitz: How can the DSA “reconcile its moralistic objections to sanctions against Russia with its support for” the Boycott, Divestment, and Sanctions (BDS) movement against Israel? The question is generative. It requires the identification of a universal standard for justifiable sanctions in response to international crimes, and an evaluation of the ongoing and proposed economic penalties on Russia and Israel against that standard. 

So let us begin with a rough sketch of a universal sanctions standard: the only sanctions socialists (and everyone else) should support are those that 1) have the backing of the international community, and 2) are narrowly tailored so that their impacts fall primarily on culpable elites and militaries. We can call the first clause the “Legitimacy Clause,” and the second the “Distinction Clause.” While the sanctions on Russia fail on both counts, BDS more closely comports with the second principle. Let us consider each in turn.

The Legitimacy Clause

The Legitimacy Clause derives from a principle embodied in the United Nations Charter – one I think universally held by leftists as well as some liberals – that matters related to peace, security, and international law should be decided as collectively as possible. Contra Madeleine Albright, no single country or region of the world stands tall and sees “further into the future” than the rest. Because individual governments are liable to pursue narrow interests defined by domestic constituencies, for decisions on matters of global governance to have political legitimacy there needs to be buy-in from diverse stakeholders across the globe. To be sure, this principle should grant countries directly affected by an international law violation, like a war of aggression, more leeway to act unilaterally. Moreover, the views of directly affected countries should carry significant weight in any collective decision-making process. 

So how do our two case studies fare under this principle? A recent statement on the BDS campaign’s website suggests that unlike the sanctions on Russia, the campaign’s proposed sanctions on Israel will not be “US-lead.” BDS gets at something here.  I would not go so far as to call the sanctions on Russia US-lead. They are multilateral, the EU played a significant role in bringing them about, and they would do significant damage to Russia even in the US’s absence. But, at the same time, it is undeniable that the US, as a result of its inordinate influence over the global financial system, is at the center of the constellation of states sanctioning Russia. 

Moreover, that constellation of states is only regional. Almost all of the sanctioning governments are European, with the handful of exceptions being US-aligned states primarily located in East Asia: Japan, Singapore, Korea, and Taiwan. As David Adler points out, the bulk of the Global South, including “many of the world’s largest nations… have refused to join in.” This regionality is understandable to the extent that the Eastern flank of the EU is near the line of fire, however it becomes more suspect as one’s eyes drift westward along the map of sanctioning states.

But is BDS really proposing sanctions that are more multilateral than those presently imposed on Russia? I do not think so. Certainly, the campaign hopes that sanctions on Israel will be global in scope. But the campaign apparently would also support individual states taking initiative in the meantime. For example, leading advocates of the BDS movement view unilateral efforts by the lower house of Ireland’s parliament to impose trade sanctions on Israeli settlements favorably.

To be fair, because the Security Council is routinely paralyzed by the veto power of its Permanent Five members, there is not really a reliable institution in existence with both the mandate and the capability to engage in collective decision-making on sanctions. This void in the security architecture of the world makes it difficult for the international community to vote on sanctions, and so, where the interests of the Permanent Five are implicated, the best we can hope for at the present moment are ad hoc, iterative sanctions campaigns. For this reason, a categorical Legitimacy Clause is aspirational—dependent on reforms to the institutions of global governance. What we are left with is a more malleable principle or a sliding scale: a sanctions regime becomes more legitimate as international support for it becomes more widespread. Suffice to say, at the present moment, the principle does not allow for the drawing of sharp distinctions between BDS’s proposals and the sanctions imposed on Russia.

The Distinction Clause

Not even a truly global sanctions regime is worthy of support if its impacts are indiscriminate. As Joy Gordon – to whose writing I owe much of my own thinking on sanctions – observes in her book Invisible War, the notoriously inhumane sanctions on Iraq in the 1990’s were devastating, in part, because they were global in scope. Unlike the Legitimacy Clause, the Distinction Clause is categorical: sanctions must distinguish between civilians and individuals engaged in hostilities or culpable for violations of international law. 

This “principle of distinction” is hardly radical. The idea that it is immoral to injure civilians in order to affect enemy morale crystallized amidst anticolonial struggles in places like Vietnam in the decades following World War II. But the norm has much older antecedents, like the 1868 St. Petersburg Declaration, which affirmed the corollary proposition “[t]hat the only legitimate object which States should endeavour to accomplish during war is to weaken the military forces of the enemy.” Even as applied to sanctions, the principle has some basis in international law. For example, a 1997 General Comment by the UN Committee on Economic, Social, and Cultural Rights states that when imposing sanctions,

“[I]t is essential to distinguish between the basic objective of applying political and economic pressure upon the governing élite of the country to persuade them to conform to international law, and the collateral infliction of suffering upon the most vulnerable groups within the targeted country… When an external party takes upon itself even partial responsibility for the situation within a country… it also unavoidably assumes a responsibility to do all within its power to protect the economic, social and cultural rights of the affected population… the external entity has an obligation ‘to take steps, individually and through international assistance and cooperation, especially economic and technical’ in order to respond to any disproportionate suffering experienced by vulnerable groups within the targeted country… the inhabitants of a given country do not forfeit their basic economic, social and cultural rights by virtue of any determination that their leaders have violated norms relating to international peace and security… lawlessness of one kind should not be met by lawlessness of another kind.”

With the Distinction Clause in mind, let us first consider the case of the growing suite of enormous economic penalties that have been imposed on Russia since February 24. Some of these sanctions are narrowly tailored to target the personal finances and mobility of culpable individuals within or closely associated with the Russian government. But the most dramatic sanctions are the exclusion of Russian banks from the SWIFT international bank payment system and a ban on transactions with the country’s Central Bank. As a result of such measures, JP Morgan expects a 35% contraction of the Russian economy in the second quarter of this year, and the Institute for International Finance projects that the country’s economy will shrink by 15% by the end of the year

What do these abstract macroeconomic indicators mean in practice? For some perspective, the 2008 Great Recession resulted in a comparatively small 4% slump in the American economy. In a recent speech, President Biden predicted that the Russian “economy is on track to be cut in half in the coming years.” If that figure turns out to be correct, the result would be a depression in Russia on par with that which accompanied the collapse of the Soviet Union. What is clear enough is that the sanctions will result in harm to civilians. Many studies indicate that economic recessions have adverse impacts on public health. Significant declines in life expectancy accompanied the Russian recessions of the 1990’s. 

The devastating effects of the Russia sanctions are not entirely lost on their American architects. Although Secretary of State Antony Blinken (unpersuasively) argues that “[t]he economic costs that we’ve been forced to impose on Russia are not aimed” at ordinary Russians, he concedes “the Russian people will suffer.” Biden’s deputy national-security adviser for international economics, Daleep Singh, echoed the sentiment in a New Yorker profile. Singh, the principal author of the sanctions regime, acknowledged that “hardship… will be imposed on the Russian people as a result of these sanctions… It’s sobering and it’s tragic.”

Biden himself has stated, “these economic sanctions are a new kind of economic statecraft with the power to inflict damage that rivals military might.” It is worth emphasizing that this might is not trained upon individuals in the Putin regime or the country’s military-industrial complex. The sanctions are not designed to have an immediate or direct effect on the war-fighting capabilities of the country’s invading military forces. Instead, the sanctions inflict damage primarily upon civilians. Let me be precise about what I am saying here: I am not arguing that harming civilians is the ultimate goal of the sanctioning states, but rather that the sanctioning states are aiming to achieve their final military and political objectives by harming civilians. As the New York Times reports,

The harsh penalties — which have hammered the ruble, shut down Russia’s stock market and prompted bank runs — contradict previous declarations by U.S. officials that they would refrain from inflicting pain on ordinary Russians… The thinking among some U.S. and European officials is that Mr. Putin might stop the war if enough Russians protest in the streets and enough tycoons turn on him. Other U.S. officials emphasize the goals of punishment and future deterrence, saying that the carcass of the Russian economy will serve as a visible consequence of Mr. Putin’s actions and a warning for other aggressors.

This is a manifest violation of the Distinction Clause.

How does BDS fare by comparison? The BDS National Committee states that it only supports sanctions that “respect fundamental human rights and humanitarian obligations,” are “proportional to the gravity of the [Israel’s international law] violation,” and that would not cut “the supply of food, medicine and other basic goods” to residents of the country. These are good general principles that are entirely compatible with the Distinction Clause. 

However, a few words of caution are in order about formal guarantees that sanctions will contain humanitarian safeguards. Such safeguards are actually quite typical of sanctions regimes. BDS supporters should be mindful that the devastating 1990’s sanctions on Iraq included humanitarian exemptions for basic goods and medicine, and that extant Iran sanctions do as well. In practice, even ostensibly humane comprehensive economic sanctions have a tendency to cut civilians off from necessary supplies either due to poor design or due to the ripple effects of major economic disruptions. For example, as Human Rights Watch observes, “[t]hough the US government has built exemptions for humanitarian imports into its sanction regime, broad US sanctions against Iranian banks, coupled with aggressive rhetoric from US officials, have drastically constrained Iran’s ability to finance such humanitarian imports.” According to more recent reporting by the Times of London and the BBC, already the present Russian economic crisis is leading to panic buying of medicine and shortages in pharmacies: “Sales of medicines are not subject to sanctions, but with major shipping companies suspending services, supplies could be hit.”

Digging into the specific sanctions recommended by the BDS National Committee, a mixed picture emerges. The Committee calls for “a comprehensive military-security embargo, cutting financial links with banks that finance apartheid and settlements, and expelling apartheid Israel from the Olympics, FIFA, Horizon, and other international bodies.” The Committee also appears to endorse another statement by the human rights organization Al Haq, which recommends the termination of free trade agreements with Israel, trade sanctions on Israeli settlements, and an end to security cooperation with the country. 

An arms embargo and end to security cooperation are entirely compatible with the Distinction Clause. Bans from sports leagues are symbolic sanctions. They do not run afoul of the Distinction Clause because they have negligible impacts on the well being of civilian populations. On the other hand, although BDS aims most of the proposed trade and banking sanctions at the financing of settlements in occupied territory, in practice it is likely that at least some of these penalties would primarily fall on ordinary people who are not culpable for this international law violation. I cannot say the proposed trade and banking sanctions certainly will violate the distinction clause because the Committee’s description of these measures is only cursory.

In any case, even these suspect BDS proposals are nowhere near as severe as the sanctions imposed on Russia. There is no call to cut Israel’s economy in half by imposing draconian sanctions on the Bank of Israel (the country’s central bank). It is safe to say that, whatever their potential faults, the BDS sanctions proposals are more in line with the Distinction Clause than the Russia sanctions. Furthermore, there is still time to design BDS sanctions that completely hew to the standard.

An Afterthought on the Efficacy of Sanctions

Readers may have noticed that my proposed universal sanctions standard lacks criteria related to the efficacy of sanctions. My decision to relegate a discussion of efficacy to this postscript is intentional. When evaluating a sanctions regime, socialists (and everyone else) should take efficacy into account, but only as a secondary consideration—an afterthought. An internationalist Left must not ignore the international community. And a decent Left must not victimize innocent people to fulfill larger aims. 

I also excluded efficacy from the standard, in part, because I do not believe that sanctions are effective policy tools. As historian Nicholas Mulder observed in a 2019 Fellow Travelers essay, “the history of sanctions is mostly the history of failure interspersed with a few limited successes.” Mulder, author of the recently published The Economic Weapon The Rise of Sanctions as a Tool of Modern War, observes that,

There is only one instance in which a state of similar heft to Russia has been embargoed in order to rein in its aggression. In 1935 the League of Nations imposed sanctions on Mussolini’s Italy, which was the world’s seventh-largest economy for invading Ethiopia in 1935. But these measures failed to hobble the invader and save the defenders.

Worse, regimes may misbehave even more after the imposition of sanctions.  When Saddam Hussein invaded Kuwait, a US-led Security Council responded with the most severe sanctions package in modern history. Rather than withdrawing from Kuwait in response, the Iraqi regime escalated. Hussein declared Kuwait Iraq’s 19th province and annexed the Gulf state. Reporting from Russia does not inspire confidence that the new sanctions have chastened that government. To the contrary, the economic shock appears to have contributed to a rally around the flag by Russian citizens. 

Supporters of BDS more sanguine about sanctions’ prospects to change Israel’s behavior might argue that there is some quality of that country that would make it more responsive to sanctions than Mussolini’s Italy, Hussein’s Iraq, or Putin’s Russia’s. Many argue that sanctions contributed to ending Apartheid in South Africa, and that the struggle for Palestinian liberation is analogous. Maybe there is a unique vulnerability in settler-colonial societies, with relatively high standards of living, surrounded by unfriendly states, accustomed to American support, and presiding over large and hostile colonized populations. Maybe.

Of course, the entire concept of efficacy is muddled by the fact that it is often unclear what the intended effect of a given sanctions regime is. When sanctioning states fail to articulate the conditions under which economic penalties will be lifted a kind of mission creep can set in. And even if the conditions are articulated clearly there is no guarantee that the sanctioning state will abstain from moving the goalposts. 

Once again, Iraq is a useful case study. In Invisible War, Joy Gordon traces how the objectives of the Iraq sanctions gradually shifted over the course of the 1990’s from expelling Iraq from Kuwait, to disarming the Iraqi state, to containing Saddam Hussein, and, finally, to removing him from power. This one-way ratchet is not unique to Iraq. American presidents are typically vilified by the opposing party and a variety of hawkish interests groups for negotiating with adversaries. As U-turns on sanctions relief for Cuba and Iran from 2015 to today demonstrate, the incentives of American domestic politics are such that Presidents find it much easier to slap on and tighten sanctions than to lift them.

To BDS’s credit, from the outset of the campaign, organizers have laid out four conditions that, if met, would lead to the end of calls for sanctions on Israel: 1) ending the occupation of Palestine, 2) demolishing the separation wall along the border of the West Bank, 3) granting Israeli-Arabs full equality under the law, and 4) accepting the Security Council resolution acknowledging Palestinian refugees’ right to return to Israel.

The criteria for lifting the sanctions on Russia are not quite so clear. They appear to be developing in real time. When the SWIFT and Central Bank sanctions were announced by the coalition of sanctioning states on February 26, Daniel Drezner, generally a supporter of sanctions, lamented, “I saw nothing in the joint statement that suggested any demands that could cause these sanctions to be lifted.” In at least two subsequent White House Press Briefings reporters sought clarity. Under what conditions might sanctions be lifted? Would an agreement with Ukrainian President Volodymyr Zelensky be sufficient? Press Secretary Jen Psaki declined to answer both times. Over the same period, in an interview with TASS, Under Secretary of State Victoria Nuland more forthrightly stated “sanctions will end that if [Putin] ends this war, and helps rebuild Ukraine… and recognizes that country’s… territorial integrity.” 

In a March 16 NPR interview Secretary of State Tony Blinken finally laid out his criteria, generally echoing Nuland’s, but adding one condition: “[w]e will want to make sure… that anything that’s done [by Russia] is, in effect, irreversible.” The Secretary did not specify what steps Russia would need to take to prove that a complete withdrawal from Ukrainian territory is irreversible. Ten days later President Biden generated more uncertainty about US policy objectives by stating that Putin “cannot remain in power” in an off the cuff remark at the end of a speech in Warsaw – incidentally the same speech, mentioned above, predicting that the sanctions will cut the Russian economy in half over a number of years. Biden, of course, walked back the statement, and on April 3, Blinken reiterated a version of his previously stated position that sanctions relief will be tied to a restoration of Ukrainian sovereignty. More recent, reporting on the matter from the Washington Post underscores an outstanding ambiguity in the administration’s position: 

If Ukraine and Russia agree to a peace settlement, Washington and the European Union will face a separate question about whether to offer sanctions relief to the Kremlin. The answer is not an automatic yes, some policymakers said.

The report is an ominous reminder that even in the happy event that Ukraine succeeds in liberating its territory, the country’s sovereignty ends at its border. The same cannot be said of the United States, a world-spanning economic and military superpower. Lifting many of the sanctions imposed over the past two months will be our sovereign prerogative. Given our history, it is not difficult to imagine this economic siege becoming a permanent feature of our increasingly fractured world order.

Michael Youhana works for a nonprofit and occasionally writes about foreign policy. Views on Fellow Travelers are his own.

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