Why economic sanctions never work

The purpose of economic sanctions was aptly summarised back in 1960 by a US State Department official in a secret memo on Cuban sanctions ‘to bring about hunger, desperation and overthrow of government.’ Twenty years later, the CIA concluded that ‘economic sanctions… have not met any of their objectives’. Worse, the measures strengthened the regime, providing Castro with ‘a scapegoat for all kinds of domestic problems’.

That pattern has endured. Sanctions result in hardship for the sanctioned population, as exemplified by the half-million toll on Iraqi children during the 1990s, while the sanctioned nation’s ruling elite escapes unscathed and diverts any possible local disaffection among the immiserated populace against the sanctioning powers. In 2022, the sanctions on Putin’s regime have backfired more spectacularly than usual. Not only has the Russian economy not collapsed; but the sanctioneers, principally the Europeans, are themselves in an accelerating economic downslide, marked by rising inflation, in particular catastrophic energy costs consequent on sanctions against Russian oil and gas.

To understand why sanctions so consistently turn out to be ineffective, it is worth reflecting on another instrument of strategic coercion that has long beguiled western powers, especially the US. Strategic air power, deemed capable of inflicting defeat on an enemy independently of ground action, first found institutional expression with the creation of the RAF in 1918. Since then, whether expressed in the form of 2,000lb bombs dropped from Lancaster bombers over Germany, the eight-year US air war against Vietnam, or precision strikes with Hellfire missiles against enemy commanders in Afghanistan, independent air power has consistently failed to deliver the promised results. German war production steadily increased through 1944; the Vietnamese never showed the slightest inclination to quit; the Taliban’s determination never apparently faltered.

These two modes of warfare share the underlying assumption that the enemy system and the consequences of attacking its components can be comprehensively understood and that, furthermore, the enemy will not adapt. For years during the Vietnam war, for example, the US strove relentlessly to destroy the Thanh Hoa bridge in North Vietnam, deeming it absolutely key to the enemy supply system. Finally, in 1972, they succeeded, only to discover that the North Vietnamese had stopped using it years before, rerouting supply lines to a convenient river ford a few miles away.

The misplaced belief in the efficacy of sanctions as a weapon may partly be traced to what is generally deemed to have been their greatest triumph: the British blockade of Germany in the first world war that supposedly starved the Germans into submission – a ‘very perfect instrument’ in Keynes’s words. But as the late, great Norman Stone pointed out, German food shortages were almost entirely due to government mismanagement, though the blockade provided a convenient scapegoat. Nevertheless, following the war, what Woodrow Wilson called ‘this economic, peaceful, silent deadly remedy’ retained its place in the armoury of nations powerful enough to use it, preserved in international law as a mechanism for dealing with recalcitrant foes.

Just as an unpromising record has not apparently affected the bomber lobby’s power and prosperity, there is little likelihood that the sorry example of Russian sanctions will deter future deployment of the same weapon. Sanctions, at least in America, now have a firm institutional base in the bureaucracy, thereby allowing the US Treasury to become a major player at the expense of the State Department in national security affairs, while their ever-widening scope has spawned a growing tribe of compliance lawyers across banks and corporations.

Of course, assuming that sanctions continue in failing to provoke ‘hunger, desperation, overthrow of government’ – in this case Putin’s – Biden may be tempted to reach for the other strategic weapon discussed above. Let’s hope that someone remembers how well that one has worked.