Rallying the War Party

For many pundits, the events of the past two weeks indicate a forceful return to a Cold War framework. But such abstract comparisons deserve some concretization: as Mike Davis notes in a recent essay for Sidecar, those who evoke such a historical parallel seem to ignore that, this time around, this dangerous predicament does not include “politburos, parliaments, presidential cabinets and general staffs [which] to some extent countervailed megalomania at the top. . . . There are few safety switches between today’s maximum leaders and Armageddon.”

From this perspective, the ease with which so many have jumped on the opportunity to brandish their warmongering credentials and to salivate in anticipation of a full-on conflict with Russia is doubly frightening. Like adolescents whose understanding of war is reducible to video-game simulations and driven by a desire to be seen as “doing something,” quite a few Western commentators — and a lineup of “experts” attached to weapons contractors — have advocated the creation of a no-fly zone over Ukraine — oblivious or indifferent to the fact that its implementation presupposes its military enforcement and, therefore, constitutes a declaration of war.

If there is any indication that the potential horror unleashed by pursuing such suggestions is not entirely lost on the sociopaths proposing them, this can only be negatively inferred. Parallel to such doomsday suggestions, one finds the deranged and yet supposedly reassuring calculations that an actual nuclear war might not be that bad. That such notions have even entered public debate is an ominous sign of the dark times we are living through.

Officials in the United States and the European Union have not gone that far, at least publicly — but they often come close. One such example was Spain’s foreign minister José Manuel Albares, who nonchalantly suggested the need for a “serious discussion” about a no-fly zone at an upcoming Western summit. Less direct but equally unsettling, the leader of Germany’s Christian Democratic Union, Friedrich Merz, publicly wondered if we should consider the possibility that NATO itself will have to be “forced to take decisions to stop Putin.”

Until now, however, the most obvious escalation along similar lines came in an ecstatic speech by the president of European Parliament, Roberta Metsola, a member of Malta’s Nationalist Party. Opening the session on the prospect of fast-tracking Ukrainian EU membership — after a self-congratulatory rundown of the measures already taken, ranging from banning “Kremlin propaganda tools” and boycotting Russian participation in sport events all the way to economic sanctions and the provision of military equipment — Metsola promised that “Europe stands ready to go further still.”

Insisting that the Russian state’s actions pose an “existential threat to the Europe we know” and exclaiming the need to “defend our way of life,” Metsola called for disentangling European energy requirements from “Kremlin gas” and obstructing the access of Kremlin cash “in our cities, our communities, or in our sports clubs.” After hinting that such noble goals should be shared and widely echoed by “social media and tech conglomerates,” lest they be seen as complicit in Putin’s war, she concluded by urging a massive increase in European military spending, signaling that “investment in our defense must match our rhetoric.” The ease with which her rhetoric became ours was, to say the least, disturbing.

Such proclamations may well represent the Western mirror image of Putin’s own propaganda war. Verbal escalations of this sort are not atypical in such circumstances, serving as an ideological mechanism for producing a unified vision and consensus, but are rarely translated into direct action. Yet, as is the case with Putin’s actual invasion, we can already see signs that the war in Ukraine is weaponized to reconfigure European policy beyond the immediate conflict. German chancellor Olaf Scholz’s surprise announcement that an extra €100 billion would be earmarked for military spending, premised on the basis that we are experiencing a “zeitenwende” (historical turning point), is yet another indication.

The Economic Alternative

In contrast to the worrisome potential evoked by such militarization, the use of nonmilitary means to pressure the Russian state is, understandably, often seen as a more benign, and thus preferable, alternative. Indeed, up till now, beyond providing military equipment, Western reaction has remained focused on economic sanctions.

Yet, once again, the language with which some officials accompany the sanctions gives reason for pause. Starting from UK foreign secretary Elizabeth Truss’s declaration that “the purpose of sanctions is to debilitate the Russian economy,” French finance minister Bruno Le Maire took matters further by proclaiming that “we are going to wage a total economic and financial war on Russia” with the aim of causing “the collapse of the Russian economy.” Leftish Belgian politician Conner Rousseau took to Instagram to celebrate the prospect of the Russian economy being “strangled to death.”

Such statements do seem to accurately portray the unprecedented escalation of economic action taken against Russia. In the first days of the invasion, sanctions appeared to follow the 2014 playbook; i.e., targeting individual members of Putin’s entourage and specific banks while also placing significant (but not unsurpassable) obstacles to Russian firms’ capacity to finance themselves through capital markets. Back in 2014, given the deeper entanglement of Russian exports and money within the European economy, German, French, Italian, and UK participation remained (until the shooting down of Malaysia Airlines Flight 17) rather lukewarm. Even after that, sanctions remained confined to a ban on exports of military-related equipment to Russia, restricting Russian banking debt issuance privileges, and expanding the list of banks and energy corporations with limited access to capital markets.

This time around, however, any divergence between the United States and EU dissolved in just a couple of days. Beyond the decision to exclude key Russian banks from the global payments messaging system (SWIFT), and their subsequent full exclusion from dollar-based clearing systems (directly controlled by the Fed), Western sanctions directly targeted the Russian central bank’s reserves — a measure previously only utilized in the aftermath of the Taliban takeover in Afghanistan.

According to commentators, the result was the effective freezing of more than $300 billion in central bank reserves, while others noted that, at this moment, Russian financial claims and its gold reserves are inaccessible. With the ruble in free fall since the beginning of the military invasion, the Russian state has been deprived of a key weapon through which to defend the value of its currency, leaving it with the sole (and less effective) option of drastically raising interest rates (from 9.5 to 20 percent within one day, dwarfing a similar hike in 2014, when interest rates moved from 6.5 to 17 percent).

Such pressure represents a huge step into unchartered territory. As a former adviser of the US Treasury put it, “We are, with Russia, heading toward an Iran scenario but over the course of several days with a G-20 economy and a major exporter of fossil fuels.” Worse than that, as Dominik Leusder explained, “there is a reason sanctions of this severity have never been levied against a major world power in the nuclear age: they are profoundly dangerous.”

There was, some argued, a silver lining: so far, energy transfers from Russia remained exempt from the sanctions. This did not merely reflect Europe’s significant dependence on the Russian energy supply — calculated at 26 percent of its crude oil, 41 percent of natural gas, and 46 percent of coal. It was also a semiofficial admission that the inflationary pressures of the past year, which had central banks with their hands on the switch to raise interest rates, were largely driven by energy prices. Nonetheless, mounting calls for including energy supplies in the sanctions package continued. Otherwise, the Wall Street Journal argued, it is hard to conceive a “complete collapse of Russia’s economy.”

Whether this consideration was behind Joe Biden’s announcement of a ban on all imports of Russian oil is debatable. In any case, it led to a retaliatory move by Putin, who announced the banning of any export of medical, auto, electronic, and tech equipment for 2022.

The Use and Misuse of Sanctions

When we take a wider view and actually survey the historical record of sanctions (brilliantly researched by Nicholas Mulder for his recent book), we must have serious doubts over the effectiveness of this economic weapon. While sanctions have historically been effective when preemptively used against significantly weaker countries (like Yugoslavia or Greece in the 1920s), their implementation against more powerful actors (like Italy in the 1930s) appears utterly counterproductive. Playing into domestic propaganda and paranoia about global isolation, sanctions facilitate moves toward protectionism and a disconnect from the global economy via enhanced calls for autarky. Even if this path is illusory, the results can retrospectively be blamed on the sanctions themselves. If anything, sanctions seem to accelerate the authoritarian tendency to sacrifice economic well-being in exchange for nationalist awakening.

Sanctions’ effectiveness also has to do with them being accompanied by clear (and realistic) demands, as well as a well-defined timeline for their implementation — and withdrawal. The absence of such a framework can be well perceived (and it has on numerous occasions) as an indication that those imposing them will continue even if the immediate trigger for their implementation is gone. Seeking the withdrawal of the Russian army from Ukraine is different from aiming at the “complete collapse of the Russian economy.”

Such ambiguities are all too present in current sanctions. Given their obvious failure to preemptively deter against territorial expansion, what exactly is the aim at this moment? Punishment? Pressure on Putin’s entourage? The devastation of living conditions in Russia to the point of causing an uprising? A closer look at each of these notions may dispel some myths.

To start with, the capacity to locate and gain access to the wealth and assets of Putin’s oligarchs is known to be a complex, difficult, and long process — not because their wealth is hidden behind a corrupt and criminal structure but because the legal code of capital represents a historically successful process of constructing “asset-shielding devices.” Just as Russia’s central bank accumulated reserves in anticipation of sanctions, oligarchs surely prepared themselves accordingly, mitigating any attempts to sanction through stronger legal toolkits and sophisticated layers of legal protection.

Moreover, even if progress could be made on locating and seizing these assets, it is hard to explain how this is meant to turn Putin’s supporters against him. The structure of the Russian accumulation regime is such that those at the top of the ladder depend as much on Putin (and access to state coffers) as he does on them. With their overseas assets frozen, one may well wonder which aspect of their self-interest would convince them to turn against their domestic benefactor.

What we have seen, though, is how the sanctions are directly worsening the living conditions of people in Russia. This lands on top of accelerated repression against courageous opposition to the war, with thousands promptly arrested and abused by Russian police. A growing number of others are simply leaving the country.

Finally, the absence of a clear timeline creates a further layer of concern. Since sanctions presuppose the interconnectedness of the global economy, their implementation against a country that has a significant position within that nexus directly threatens a wider collapse. Russia’s share in global energy and commodity markets has, for that reason, raised significant concerns about the consequences of these sanctions at a “global monetary and macro stability” level.

Solidarity With Ukraine?

As Mulder also shows, alongside the emergence of the economic weapon of sanctions, a “positive economic weapon” was also developed, designed to provide direct financial and logistical support to victims of aggression. From such a perspective, it could be hoped that significant economic support to Ukraine might balance out the uncertain effectiveness of sanctions on Russia, at least for people in Ukraine. Yet even here, the track record of Western economic aid leaves much to be desired.

As Yuliya Yurchenko’s Ukraine and the Empire of Capital well illustrates, ever since the collapse of the Soviet bloc, Western economic relations with independent Ukraine have largely exacerbated its socioeconomic disasters. More recently, we find not only the European Central Bank’s scandalous refusal to provide Ukraine access to swap facilities (i.e., to support liquidity) in 2008, but also the equally discreditable EU Association Agreement of 2012. While “offering” Ukraine a meagre €610 million (as Adam Tooze notes, “there were Ukrainian oligarchs with personal fortunes larger than this”), this demanded massive public spending cuts, a 40 percent increase in gas bills, and the imposition of trade sanctions with Russia whose impact was optimistically calculated at a massive $3 billion per annum.

Despite the outrageous terms of this deal, then president Viktor Yanukovych’s refusal to sign it, with an eye to a more lavish Russian counteroffer (with strings of integration into the newly formed Eurasian Economic Union firmly attached), formed the background for the 2013 uprising and his eventual overthrow. The subsequent annexation of Crimea and the outbreak of conflict in Ukraine’s eastern regions strengthened the (understandable) desire for further Western integration. But the recipe followed was the same.

Triggered by geopolitical considerations, and thus indifferent to the fact that Ukraine’s economic capacity for “program compliance” was close to zero, the IMF brokered a deal (with EU, US, and Japanese participation) promising more than $17 billion over two years. The problem was not only that such loans came with heavy strings attached, in the form of sharp public-spending reductions and a series of privatizations that further decimated what remained of the welfare state; it was also that Ukraine was forced, as Tooze notes, into the “impossible challenge of implementing an IMF austerity program while fighting a war.”

Given this background — and coupled with the verbal warmongering — the eager proclamations of EU officials that Ukraine will swiftly be welcomed into the European “family” should be taken with not just a pinch but a whole cup of salt. Commission president Ursula von der Leyen’s statements have already attracted some backlash by officials throwing cold water on the possibility of quick integration, rendering such a long-term prospect irrelevant to the current conflict. From this perspective, it remains hard to see how making misleading promises to those experiencing or fleeing a war situation is anything to celebrate, despite Western festivities around “European unity.” As in 2008 and 2013, the actual interests of people in Ukraine seem to play little role in the deliberations of EU officials. If anything else, an immediate cancellation of Ukraine’s unbearable debt, as many are already demanding, would go much further than empty “We want them in” phrases.

An End in Sight?

As already mentioned, the repercussions of the continuation of the war and sanctions have exerted tremendous pressure on global commodity prices (reflected in oil, coal, gas, and, crucially, grain markets), resulting in a record price hike. Some commentators have noted that we are heading toward a frightening situation where “demand destruction . . . will become prevalent” — adding that “the last time we ran out of wheat we had the Arab Spring.” With prices at their highest since the 1970s, we face the threat of catastrophic developments affecting the whole world. Already, expectations of strong inflationary pressure (also a result of Western policies) have given the European Central Bank’s conservative hawks a leading role in setting monetary policy, a predicament that raises legitimate concerns about a global recession. As always, those deprived of the resources to withstand such a turn — or the ability to control the decisions that led to it — will be the immediate victims.

The unprecedented nature of many of these developments often hampers direct historical analogies. But there are historical lessons to be learned. From such a perspective, a reminder of a largely forgotten historical truth might be of some use.

In his review of Mulder’s book, Jamie Martin notes that “Germany did not sue for peace in late 1918 because the civilian population had been hobbled by deprivation. Instead, this was due more to a crisis of morale in the military.” Going one step further, we might add that this crisis of morale led, in turn, to widespread mutiny and the formation of sailors’ and soldiers’ councils that not only brought the war to an end but sought to radically transform the society that had brought it about. Along similar lines, one can hardly underestimate the importance of the collapse of military discipline, the widespread practice of fragging officers, and the rebellion within the US Army in ending its offensive in Vietnam.

Now news has surfaced of Belarusian soldiers threatening to shoot their own officers if ordered to engage in Ukraine. And while nothing of this scale has emerged from the Russian side, there are some reports of rising desertions. Should no diplomatic solution be found, the continuation of the invasion could well feed such insubordination. Our solidarity and practical assistance toward people from Ukraine must remain invariant. Yet it is also possible that support for Russia’s internal enemy will bring a faster end to this war than plans to impoverish them.