The Economic Weapon: The Rise of Sanctions as a Tool of Modern War by Nicholas Mulder

This isn’t a book about if sanctions are good or bad. It’s about the history of sanctions and what effect they have had on war and politics. It goes through the arguments of different countries of when and where to deploy the ’economic weapon’. It is a narrative of certain events in world history when sanctions were deployed, threatened, or planned to be used. This is a pretty dry history book but has gained a bit more relevance due recent current events.

Right now, the world is deploying sanctions on Russia to a degree never before seen. What isn’t so clear is what affect it is having on Russia.

I have collected some interesting quotes that caught my eye while reading the book and interspersed some commentary in there too. A lot of the commentary is about the current Russian war of aggression. It’s hard not to try to think about that as I read a book about sanctions as a weapon of war.

“The economic weapon, the most decisive, which can, without a drop of blood, bring the aggressor to his knees, will be used,” wrote the French newspaper editor Le’on Bailby in 1918.

“Another French solidariste and friend of Bourgeois was anthropologist Marcel Mauss. A draft document from 1918 found in his personal files contains an ingenious plan for automatic international sanctions. It introduced the concept of “contraband of peace”, defined as all foreign property and commercial goods based in or traversing another nation’s territory. In case of a treaty violation, this wealth could be seized and auctioned off by the nation proven in the right by an international organization.”

It is an interesting concept of seizing property of the aggressor nation and using the funds to finance the war against them.

“…the British delegation had changed its stance on this for legal reasons: under common law, His Majesty’s Government could not claim the authority to institute coercive economic measures without officially declaring war.”

Are sanctions war? It isn’t really said aloud but most would agree that sanctions are a type of war. We have gotten so used to them though that they aren’t that surprising anymore. The US has been using sanctions against China and Iran for a long time.

“…the use of economic pressure in peacetime was beset with problems. Who would suffer most from being deprived of access to trade? Would blockade-caused hunger and socioeconomic collapse stifle Bolshevism or spur it? And who determined when the isolation of the defeated and revolutionary states of East and Central Europe would end?”

We still struggle with these questions. Do we block food or only ‘military’ goods? Who defines what goods are for the military?

“British leaders hoped that limited exchange would soften and dull Bolshevism more effectively than maximum economic pressure. Lloyd George explained to the House of Commons: “We have failed to restore Russia to sanity by force. I believe we can save her by trade. Commerce has a sobering influence in its operations. … The Russian with his head in the clouds finds he is cold, and discovers thathe is not clad and that he is hungry … There is but one way - we must fight anarchy with abundance.” Lloyd George subscribed to a version of the older liberal idea of doux commerce, the notion that trade is inherently civilizing.”

This hasn’t worked with China nor Russia. This idea needs to go the way of the dodo.

“Elliot Felkin (1924) I think personally that we should make sanctions as automatic and as terrible to the entire government, fighting forces and civil population of the aggressor state as we can without resorting to arms or landing ourselves in such trouble with neutrals as to entail the breaking up of our system of sanctions owing to their opposition, and I think the more successful we are in making life in the aggressor state intolerable to the ordinary man & woman the more likely are we in a modern democratic state to break down the resistance of the recalcitrant state or indeed prevent a potential aggressor from becoming recalcitrant.”

We seem to be having this same ethical discussion in 2022. Total sanctions against Russia or slow sanctions? Do sanctions hurt regular people? or maybe that should be the point? We have tried to make war ’nicer’ and more ‘humane’ with guided missiles and limits on types of weapons that can be used but has that made war more rare? No, it seems there are ‘forever wars’ all over the world.

“Sanctions were considered economic, nonviolent, pacific, and civilian in nature, distinguishing them from physical, violent, belligerent military measures. They came to be conceived of as a political rather than a military instrument, were integrated into diplomatic practice, and could be administered by technocrats rather than professional soldiers.”

“German banker Carl Melchior, friend to Keynes (1927): “If it would be possible … to unite the capitalist powers in a kind of economic and financial blockade against Russia,… then such a move would bring Russia in an extraordinarily difficult economic and financial position, but it would in my view not lead to the downfall of the current government. The Russian people would then, as long as this situation remains, tighten their belts one or two notches.”

Seems sanctions never really were seen as useful against such huge countries as Russia and China. These large nations are difficult to encircle, have huge amount of resources within their borders, and aren’t that particular about repressing dissent in their own people.

“William Arnold-Forster, a Labour Party member who denied the possibility of distinguishing between state and civilian supplies. “Every attempt thus to cut in half the weapon of blockade is doomed to failure, for the distinctions on which it rests do not really exist,”..the lesson of the world war was that “army and nation were one.””

“Sanctions were the dark side of liberalism, a superficially neutral tool that in fact hid old-fashioned power politics.”

“E.H. Carr’s foundational text of international relations realism, The Twenty Years’ Crisis (1939), held that the League’s sanctions were misguided since the countries imposing them were not prepared to use military force as an ultimate backstop.

Exactly the problem NATO is having. Putin knows that NATO is loathe to send in troops and even lose 100 soldiers. He will just weather the sanctions.

“Once it was accepted that the U.S. government should regulate trade with warring states to avoid war, it was only a short distance to regulating trade to stop war. Neutrality legislation, intended as a roadblock against U.S. global interventionism, eventually became a stepping-stone in its rise to primacy instead.”

The US is one of the countries that has used sanctions the most since World War 2.

“When the Swiss diplomat and League high commissioner Carl Burckhardt visited Hitler at his Bavarian summer residence on 11 August, the Fuhrer told him, “I need Ukraine, so that they cannot again starve us out like in the last war.”

“Hitler, all too familiar with the fear of blockade, agreed and added that “if one doesn’t want to wait to have one’s throat cut, one must strike just beforehand, and Japan rightly recognized and did this.”

The economic sanctions from WW1 weighed heavily on the mind of Hitler it seemed. Currently in the Russian-Ukrainian war, it feels that Russia certainly knew they would be sanctioned for being the aggressor in the war but didn’t seem to care. Sanctions are not that feared by certain leaders, and types of countries. As an energy exporting country, Russia can weather these sanctions better than smaller countries that import their energy and food.

“The American jurist Edwin Borchard attacked the disposition in 1946, arguing that “the chameleonic epithet ‘aggressor’…is applied selectively to those particular disturbers of the status quo whom the dominant states happen to dislike….It is responsible for the doctrine of sanctions, designed to bend nations to the will of the ruling group.”

“At the time of the Paris Peace Conference in 1919 there had been many who had criticized sanctions as the illicit continuation of war in peacetime.”

“…World War I had shattered the old belief that people were inherently peaceful and only the rulers belligerent. The innovation of sanctions was to rely on economic total war to intimidate peoples into restraining their princes. Interwar sanctionists transformed the liberal state, defended the League, attacked neutrality, stigmatized aggression, and justified the threat and application of coercion against civilians.”

“…commodity control was not where Washington’s advantage was greatest. Its hegemony derived less from goods trade than from international leadership in corporate, regulatory, technological, and financial structures - an ensemble of capacities that policymakers have come to see as tools of “economic statecraft””

“League sanctions against Italy were not effective in stopping Mussolini or saving Ethiopia, but they had marked effects on the Italian regime and the autarkic aims and trajectories of Nazi Germany and Japan. Blockade-phobia meant that the unintended and counterproductive effects of the policy overtook its political goals. It is in this dynamic interaction between effects and efficacy that the true historical significance of sanctions lies, in the era of the world wars as much as in the present.”

After this war with Russia is concluded, I wonder what new lessons we will learn about using sanctions in war.

Rating: ★★★★

Book #41 in my 2022 Reading Challenge

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