Chapter 5 - Sanctions and moral economy

Summary

Sanctions undermine the liberal order that they are intended to protect. By challenging the principle of innocent until proven guilty, the Political West erodes its moral standing not only in target countries but across the Global South. Undermining the property and legal rights of individuals and states damages not only economic interdependence but also the very idea of deeply interconnected economies. The trend towards deglobalisation accelerates as states seek to insulate their economies and make them more resilient by short-ening supply chains, increasing localisation and import substitution. The geopolitical effects are also severe. Sanctions on Japan precipitated the attack on Pearl Harbour in December 1941. Unilateral coercive measures, as sanctions are better called, act as a form of ersatz war, entrenching the growing hostility between Russia and the West, a process that was later repeated vis-à-vis China. In his study of peasant rebellions in Southeast Asia, James C. Scott examined the moral economy of economic activity and relationships. The term is applied here to highlight the morally contentious ground on which sanctions are applied today. Without procedural justice and impartiality, not only the legitimacy of the sanctions but that of the sanctioning states themselves is questioned. No less important, sanctions contribute to the overall deterioration in the geopolitical environment, indefinitely locking states into patterns of hostility.

Sanctions from Hell

The modern era of sanctions was launched by Congress's adoption of the Magnitsky sanctions in December 2012, followed by Obama's expulsion of diplomats in 2016. Putin's ‘cronies’ became an easy although dangerously unspecific target, along with assorted oligarchs and genuine criminals. In July 2017, Congress adopted the landmark legislation, ‘Countering America's Adversaries through Sanctions Act’ (CAATSA). The CAATSA sanctions limited the president's ability to ease or lift earlier ones. Obama's sanctions had been introduced by executive order, but they were now codified in statute and therefore cannot be rescinded by presidential decree. The target was no longer alleged Russian crimes but the Russian corporate economy as a whole. This came on top of the cessation of most military-to-military contacts in the wake of the 2014 Ukraine crisis with the exception of ‘deconfliction’ procedures in Syria. A reluctant Trump had no choice but to sign the measure.