It’s certainly interesting to see how sanctions play out. There is the immediate shock of the sanctions but it feels as though it’s more the long term impact that eventually turns the screw.
I wondered when first implemented whether the West had the same power these days when there are other markets that Russia can tap into. China and India being the big ones.
It does appear from your article that the sanctions are biting and Russia are isolated to some extent at least.
I plan to write some more Russian trade in the future, but Matt Klein has done some good work on this and he pegged China and Turkey as the two big new import partners.
The citizenry of Russia seem to be facing economic pain (e.g. higher car prices, lower production of household appliances, declining real wages due to inflation). In the future, is it possible to design sanctions that hurt the government/military of an aggressive nation without tightening the belt on ordinary citizens? Were efforts to do so taken this time around?
I think this is the core tradeoff of sanctions—design something narrow enough to only deal direct damage to oligarchs and the military and you risk being ineffective, increase the effectiveness of the sanctions and you increase the economic collateral damage to civilians.
Most of the sanctions placed on Russia from 2014-2022 were of the narrow category, targeting key industries and the financial assets of wealthy elites. They definitely caused some damage to the economy, but not enough to deter Putin from invading Ukraine again (obviously). So this year's sanctions have been harsher and larger because the stakes were so much higher and because the scope of military action was so much larger.
But yes, Russian civilians are definitely feeling economic pain and I would include them in discussions about the millions suffering in the geopolitical fallout of the invasion.
Your comment makes me think about whether the population is actually of the main addressee of the sanctions -- nudging towards a tipping point of discontent. You even see - tho isolated - examples of Ukrainians protesting against the devastation of the war, not being able to straighten their lives up anywhere near in the horizon. Sustained pressure of sanctions leads to sustained discontent, and pressure on the elites and their cards. A boiling point is always near. This however also hardens their position and their grip.
The purpose of sanctions is to stop the military from resupplying, that’s all. Trying to punish civilians doesn’t work; there’s nothing they can do about it anyway except leave Russia.
Means for ends, utility maximisation? there could be strong arguments there. I’m not buying these, but try to put the goggles of the western decision makers, and for eg the approach towards Iran, and the sentiments/calculations behind that.
Отлично! Really interesting to read this piece since I hear from various people on FinTwit that the sanctions aren't really hurting Russia all that much. Perhaps the financial sanctions are not death, but the tech sanctions as you mentioned must be difficult to contend with. I just included it in my weekly list of best articles. Cheers
Haha yeah, they seem to generally want the sanctions to fail and Russia to thrive. Having made no investigation into this I was under the impression Russia was doing better than it actually is. Very informative to read your piece.
A good reminder that parts of the world are controlled by monsters and, in spite of the hardships we wreck on them, they manage to prevail and, to some extent, not suffer as much as they should. Lamentable that justice is often times so terribly slow to arrive. China, India, North Korea and who knows who else manages to mitigate the damage that we are trying to inflict.
It’s certainly interesting to see how sanctions play out. There is the immediate shock of the sanctions but it feels as though it’s more the long term impact that eventually turns the screw.
I wondered when first implemented whether the West had the same power these days when there are other markets that Russia can tap into. China and India being the big ones.
It does appear from your article that the sanctions are biting and Russia are isolated to some extent at least.
I plan to write some more Russian trade in the future, but Matt Klein has done some good work on this and he pegged China and Turkey as the two big new import partners.
https://theovershoot.co/p/russia-sanctions-mobilization-and
The citizenry of Russia seem to be facing economic pain (e.g. higher car prices, lower production of household appliances, declining real wages due to inflation). In the future, is it possible to design sanctions that hurt the government/military of an aggressive nation without tightening the belt on ordinary citizens? Were efforts to do so taken this time around?
I think this is the core tradeoff of sanctions—design something narrow enough to only deal direct damage to oligarchs and the military and you risk being ineffective, increase the effectiveness of the sanctions and you increase the economic collateral damage to civilians.
Most of the sanctions placed on Russia from 2014-2022 were of the narrow category, targeting key industries and the financial assets of wealthy elites. They definitely caused some damage to the economy, but not enough to deter Putin from invading Ukraine again (obviously). So this year's sanctions have been harsher and larger because the stakes were so much higher and because the scope of military action was so much larger.
But yes, Russian civilians are definitely feeling economic pain and I would include them in discussions about the millions suffering in the geopolitical fallout of the invasion.
Your comment makes me think about whether the population is actually of the main addressee of the sanctions -- nudging towards a tipping point of discontent. You even see - tho isolated - examples of Ukrainians protesting against the devastation of the war, not being able to straighten their lives up anywhere near in the horizon. Sustained pressure of sanctions leads to sustained discontent, and pressure on the elites and their cards. A boiling point is always near. This however also hardens their position and their grip.
The purpose of sanctions is to stop the military from resupplying, that’s all. Trying to punish civilians doesn’t work; there’s nothing they can do about it anyway except leave Russia.
Means for ends, utility maximisation? there could be strong arguments there. I’m not buying these, but try to put the goggles of the western decision makers, and for eg the approach towards Iran, and the sentiments/calculations behind that.
Отлично! Really interesting to read this piece since I hear from various people on FinTwit that the sanctions aren't really hurting Russia all that much. Perhaps the financial sanctions are not death, but the tech sanctions as you mentioned must be difficult to contend with. I just included it in my weekly list of best articles. Cheers
https://theunhedgedcapitalist.substack.com/p/december-week-1-best-podcasts-and
Thanks Unhedged! I'm really glad you enjoyed the article and appreciate that you shared it.
Yeah, FinTwit has some weird opinions on this one to say the least haha
Haha yeah, they seem to generally want the sanctions to fail and Russia to thrive. Having made no investigation into this I was under the impression Russia was doing better than it actually is. Very informative to read your piece.
A good reminder that parts of the world are controlled by monsters and, in spite of the hardships we wreck on them, they manage to prevail and, to some extent, not suffer as much as they should. Lamentable that justice is often times so terribly slow to arrive. China, India, North Korea and who knows who else manages to mitigate the damage that we are trying to inflict.