The Roman Philosopher Lucius Anneaus Seneca (4 BCE-65 CE) was perhaps the first to note the universal trend that growth is slow but ruin is rapid. I call this tendency the "Seneca Effect."

Monday, March 28, 2022

Solutions that Worsen the Problem: Economic Sanctions

 

Economic Sanctions seem to be becoming more and more popular. There is no doubt that they can do a lot of damage to the targeted countries and, in some case, they are true weapons of mass destruction. But are they effective for the purposes they are supposed to have? (image from "Democracy Digest")


Economic sanctions are relatively new: and I can't find anything like that in ancient history. The oldest version known is probably the European blockade enacted by Napoleon against Britain from 1806 to 1814. It damaged more the blocking nations (Europe) than the blocked one (Britain). 

The next important blockade was enacted during World War I against the Central Empires. This one was successful, at least in terms of damaging the blocked nations. The victims of starvation caused by the sanctions are probably to be measured in millions. But whether something is a "success" depends on how you define it. You may argue that the sanctions made the survivors angry enough that they sought revenge 20 years later, with World War II. 

Another important case of economic sanctions was enacted against Italy in 1935 as a punishment for having invaded Ethiopia. In terms of economic damage, it may have been successful: the Italian economy was badly hit. But we could argue that the wrecking of the Italian Economy was more a result of the war expenses than of the sanction. In any case, it made Italians angry enough that they thought it was a good idea to declare war on Britain in 1940. It wasn't, as they soon discovered. 

These examples suggest that sanctions are an effective weapon against weak countries. Actually, they can be a true weapon of mass destruction directed against civilians. Whether they can accomplish anything useful, is another matter. If history tells us something, it is that sanctions tend to achieve results that are exactly the opposite of the intended ones, at least officially. 

And not just that. Sanctions often hurt the sanctioners as much as the sanctioned ones. So, it is hard to understand why they are so popular, especially in a world where we tend to glorify "free trade." But, right now, they are like the Colt .45 at the belt of a gunman in a Western Movie: the first thing that appears as soon as a crisis develops. There may be some logic in the idea, though. After all, sanctions are an inexpensive way to give the impression that the government is "doing something." That is what politicians are looking for. Their worst fear is being labeled as "weak," and the sanctions offer them a chance to avoid that.        

Will the current sanctions against Russia obtain anything useful? We have to see that but, so far, it seems that the rule that sanctions are a solution that worsens the problem is being confirmed. Not only the Russian public remains in favor of the "special operation" in Ukraine, but the sanctions seem to be hurting Western Europe more than Russia. But we are just at the beginning of the story, and we'll have to see what happens in the long run. 

For a historical perspective, below I discuss the case of the sanctions against Italy enacted in 1935.


Sunday, December 8, 2019

The Effect of the Sanctions: Is Italy Cracking Down Under the Strain?


Posted on "Cassadra's Legacy" in December 2019, republished with a different title and some modifications 


We can learn a lot about the effects of economic sanctions from the story of how Italy reacted to the international economic sanctions imposed on the country in 1935 by a coalition of World Powers. Above, a photo from 1935. It shows a stone slab with the engraved words, "On 18 November 1935, the world besieged Italy. Perennial infamy on those who favored and consumed this absurd crime." Most of these slabs were destroyed after the defeat of Italy in WW2, but some can still be found.


In 1935, Italy invaded Ethiopia, at that time the only remaining free African country. Why exactly that happened is a long story. Let me just say that, in part, it was a revenge for a defeat suffered long before, when an early attempt at invading Ethiopia had failed. In part, it also had to do with reacting to the financial crash of 1929: governments often tend to seek for external enemies to distract people from internal troubles. Then, in part, it was seen as a way to displease the hated British, seen as guilty of not providing for Italy the coal that the Italian economy needed. And, finally, it had to do with some nebulous dreams about rebuilding the Roman Empire. It may sound silly, today, but if you read what people wrote at that time in Italy, the idea of creating a new Roman Empire was taken seriously.

Whatever the reasons, in 1935 the Ethiopian army was overwhelmed by the modern weaponry deployed by Italy: modern guns, planes, tanks, and the like, with the added help of poison gas bombing, a military innovation for that time. The final result was that the King of Italy gained the dubious honor of taking for himself the title of "Emperor of Ethiopia" and that Italy gained "a place in the sun" in Africa, as the propaganda described the results of the campaign.

A victory, yes, but a hollow one. From the beginning, Ethiopia was only a burden to the Italian economy, and the costs of the military occupation were just too much for the already strained Italian finances. The final result was perhaps the shortest-lived empire in history: it lasted just five years, collapsing in 1941 when the Italian forces in Ethiopia were quickly defeated by a coalition of Ethiopian and allied forces.

An interesting side effect of the invasion of Ethiopia was the story of the imposition of economic sanctions on Italy by the League of the Nations. It was a half-hearted effect to stop the invasion, but the war lasted just 8 months and the sanctions were dropped just two months afterward. Their effect was nearly zero in economic and military terms but, in political terms, it was a completely different story, and the consequences reverberated for years. Here are some of these consequences:

1. The Italians were not only appalled at the sanctions, they were positively enraged, appalled, livid. According to the international laws of the time, for a state to attack another was not in itself a crime (unlike the use of chemical weapons, but that came to be known only later). So, most Italians felt that they were punished for having done something -- annexing an African country -- that the other Western Powers had done many times before without anyone complaining. The result was a burst of national pride and a strong wave of popular support for the war. That generated also a wave of personal popularity for the Italian leader, Benito Mussolini, seen as the one who was making Italy great again (some things never change in politics).

2. The sanctions soon were presented by the government's propaganda as an epic and grandiose struggle undertaken by the glorious "proletarian nation" that Italy was against a coalition of the great plutocracies of the world, Britain in particular. And, by defeating this coalition, Italy showed that it was a great power, too, on a par with the others. This idea had terrible consequences when it led the Duce, Benito Mussolini, to think that Italy could match the military capabilities of the major world powers in WW2.

3. The government propaganda in Italy also used the sanctions to magnify the importance of the Ethiopian campaign. If the Northern Plutocrats had reacted so violently against Italy, it was because they feared Italy very much. As a result, Ethiopia became a national priority, to be kept at all costs. At the start of WW2, Italy had more than 100,000 fully equipped troops there. Without the possibility of being resupplied from Italy, these troops had no chance against the British, and they were rapidly wiped out. What might have happened if they had been available in other war theaters? It is unlikely that the final outcome of WW2 would have changed, but, who knows? The battle for Egypt in 1942 could have had a different outcome if Italy had been able to field 100,000 more troops there and, maybe, take the Suez Canal.

This catalog of disasters is so impressive that we might wonder if the sanctions were not just the result of incompetence and idiocy, but of an evil machination. Could it be that the British wanted Italy to engage in an adventure that was sure to lead the country to ruin, a few years later? Of course, it is unlikely that the British had been planning exactly for what happened, but it is not impossible that they understood that the Italian military apparatus would be weakened by the task of keeping Ethiopia and that would make Italy a less dangerous adversary in case of an all-out military conflict. If the British had planned that, they truly deserved the reputation they had at the time (and that they still have) described with the name of the "Perfidious Albion."


12 comments:

  1. Interesting history of sanctions. I had known that Nelson Mandela spearheaded the modern sanctions movement to put pressure on South Africa to end apartheid and also the fruitless but endless sanctions against Cuba by the US, but not about earlier use of sanctions. Thanks.

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  2. No one has commented on the effect of sanctions (say the fertilizer losses...just to give one current example) in light of the goals of "The Great Reset", which I now believe is actually a US/EU/Deep State effort to control the world. I've read a lot of comments on a lot of blogs and they comment on food shortages etc. But no one comments from the approach of Disaster Capitalism or mentions Blackrock's Global Natural Asset Fund...and what is actually happening, is of course, that the farmers (mid sized..small, maybe larger) will be forced out of business and if they have any debt, or are cash short, they will be forced to sell to the Blackrock's and Vanguard's of the world...for further consolidation and control. The concommitant benefit will be food shortages and starvation and death and desperation, thus aiding the population depletion effort started by the lockdown panics and small business destruction, etc. It was no accident that Biden mentioned the deaths of 60 million from 1900 to 1950 to establish the new liberal world order. One has to grasp that he knows many greater numbers of deaths are coming from his "New American World Order" which he announced publicly last week. Certainly others understand this, as Politico was projecting a massive demographic collapse in Russia and China shortly....why, what do they think they know?

    Yes, Ugo....evil machination that is generally unnoted, or perhaps not understood...as one of my former students said, "The evil is so great I cannot wrap my mind around it." And that is what the monsters count on, along with control of the media...People refuse to see/are too brainwashed to see/have had too much in their lives not to believe they are entitled to keep it forever. Anyway, good post and you came to the right suggestion at the end of the Italian piece. They may not be able to control/foresee all the variables, but the evil doers can understand that they usually benefit from their push.

    Time to go out with the dogs and gather cow pies for my own fertilizer supply for my survival garden. C.

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    1. Via Zerohedge today: https://www.zerohedge.com/geopolitical/russia-real-target-western-sanctions

      We (the people of the West) are the real target of the sanctions for the Great Reset.

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  3. Economy is life of a nation and whoever imposes economic sanctions against a nation is deadly enemy and should be treated as such.

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  4. Fact: 70+% of the EU oil imports come from producers that each have already or will pass before 2030 their peak oil production
    Personal theory: the outrage felt by europeans, driving them to support blindly any sanctions, allowed the european elites to ensure that there will be no social justice nor sobriety in reducing oil imports and the masses will be impoverished while the elites's bellies are full. As usual.

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  5. As mentioned anonymously above, these sanctions are likely part of The Great Reset, and are probably not intended so much to strangle Russia. They are the method TPTB have come up with to force reductions in resource use (food & combustible fuels) on their populations, while avoiding the political fallout by blaming it on Russia.

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  6. The current sanctions have the dangerous effect of driving the other superpowers toward a new reserve currency or, more sensibly, no reserve currency..If the dollar loses that value, 30+ trillion in debt is looking like an unclimbable mountain...
    Earlier sanctions against Russia, for the crime of not submitting to rule by the West, caused Russia to become self-sufficient in food and many other essentials, a valuable thing...Putin is now forcing the Europeans to pay for their energy in rubles, an hilarious turnabout in this stupid game...

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  7. Sanctions or no sanctions, Russia holds most of the cards in this game...Lots of scarce minerals needed by the West, large wheat surpluses to export,the largest oil reserves, and the largest unexploited oil resource in the world..As John Dos Passos wrote in his USA trilogy, "oil was trumps", and that's even more true now...Putin also has the weapons to defend these assets...

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  8. From today's The Saker blog:

    "The Vatican Bank used 10 million euros to BUY RUBLES from the Russian Central Bank so they could pay for their gas.

    They followed the instructions by the Russian Federation government to the letter.

    If this multinational organization In Nome del Padre, Figlio & Spirito Santo can do it, why not some bloody Germans?"

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  9. As always in complex systems, cause-effect is usually only predictable afterwards... It is often difficult or impossible to know what will come out of a certain action, so the most important is to be flexible and adjust if outcomes are not what we want.

    Where is the nimbleness and adaptability these days? Where do you see agile action?

    I heard an excellent quote by David Holmgren the other day, which is relevant to this topic: "The solution is the problem!" Full interview available here:
    https://regenerativeskills.com/david-holmrgren-on-the-hidden-regeneration-potential-of-the-suburbs/

    Peace,
    Göran

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  10. Very interesting opinion from Italian journalist (only 3 minutes):

    https://youtu.be/dz3qnDwwaEg

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    1. Yep, You know Ivan, there is the story that when you get old, your mind become senile. You don't understand anymore what's going on. I think it holds also for civilizations, and that's what Mr. Giorgio Bianchi is saying. Our civilization is suffering from a terminal societal Alzheimer's syndrome.

      Delete