Eight Negatives Of Economic Sanctions

In the course of international affairs, economic sanctions are a common tool of politicians who seek to achieve foreign policy objectives without resorting to open warfare. Just as economic ostracism can be a nonviolent means of successfully dealing with personal conflicts, statists would have us believe that economic sanctions are a nonviolent means of successfully dealing with international conflicts. Below are eight reasons why nothing could be further from the truth.

  1. Sanctions require initiatory force. Like all other policies that are legally binding in a statist society, economic sanctions are maintained by the threat of force being used against those who disagree with them and act upon that disagreement. In other words, if trade occurs between a citizen of the sanctioning state and a citizen of the sanctioned state and agents of the sanctioning state learn of it, they will initiate the use of force against these people. As states are the organizations which currently have the capacity to engage in the most violent behavior, and have repeatedly shown a willingness (and eagerness) to use this capacity, economic sanctions are far from a nonviolent means of achieving foreign policy objectives.
  2. Sanctions do not resolve conflicts. Diplomacy is the intergovernmental counterpart of interpersonal negotiation, and it is the proper method for dispute resolution. Just as escalating to ostracism of a person is an admission that negotiation has failed to resolve a dispute, escalating to an embargo of trade goods coming from a nation is an admission that diplomacy has failed to resolve a dispute. Sanctions generally do not involve measures of restorative justice, so tensions are likely to continue, as forgiveness and reconciliation tend to be possible only when restitution is possible.
  3. Sanctions can dishonestly do economic damage to a nation. Sometimes the political leaders of a nation decide to punish another nation on factually inaccurate and/or morally unjust grounds. When this happens, economic damage will be done to people who do not deserve it (or at least, do not deserve it for the specified reasons.)
  4. Sanctions can escalate conflicts. When sanctions are levied for factually inaccurate and/or morally unjust reasons, the people of the sanctioned nation can become angry at the sanctioning nation and demand that their government take decisive action, leading to a war that might not have happened otherwise. There is also the fact that open trade serves as a deterrent to war, as neither nation wishes to sacrifice the economic benefits of trade and neither state wishes to destroy a source of tax revenue. This is why Frederic Bastiat once said, “When goods cannot cross borders, armies will.”
  5. Sanctions cannot stop determined violent sociopaths. Just as an individual person cannot ostracize murderers, thieves, rapists, kidnappers, and other such violent criminals and expect this to stop their aggressions, a government cannot sanction another government and expect it to stop waging war against its own people or other people. If the benefits of invading another territory to take natural resources, gain a new tax base, or gain living space for an overcrowded domestic population are judged by rulers to be worth the drawbacks of economic sanctions, then violent sociopathic rulers will commit acts of aggression. The same goes for exploiting or exterminating people within a ruler’s territory. Stopping them requires the use of violence in self-defense by the inhabitants of the invaded territory or deterrents such as nuclear counter-strike capability; nothing short of this will work against a determined state aggressor.
  6. Sanctions are a double-edged sword. Free trade is by definition beneficial to all parties involved. Economic sanctions interfere with free trade, and thereby hurt not only people and businesses in the sanctioned nation, but also hurt people and businesses in the sanctioning nation by depriving them of markets in which to sell their goods and services. If enough sanctions are levied, and especially if a government sanctions other nations whose governments continue to allow business with the sanctioned nation, it is possible for organized alliances to form against the sanctioning nation, which can ultimately make the sanctioning nation more economically isolated than the sanctioned nation.
  7. Sanctions hurt commoners, not rulers. The economic deprivations caused by sanctions tend to disproportionately affect the poor, while leaving rulers all but untouched. Rulers can typically find ways to evade economic sanctions, and failing that, they can simply tax their subjects at a higher rate, all while blaming the sanctioned nation for the suffering of their subjects.
  8. Sanctions provide effective propaganda for rulers. The rulers may say, “Look at these outsiders! They have cut off your trade opportunities! They are the reason your goods and services are not being bought! They are the reason why you are poor! Support us and our cause, and we will rid you of this nuisance!” Regardless of how realistic such an outcome may be, it is not difficult for the rulers of a sanctioned nation to convince their impoverished citizens that uniting behind their rulers is their best hope. Historically, this has a terrible track record for the advancement of human liberty and has frequently led to wars.

To conclude, nothing that I have said above is outside the realm of common knowledge. An educated statist is as aware of these shortfalls as I am. This means that the reasons for the prevalence of economic sanctions in foreign policy must be viewed with a degree of cynicism. Politicians like to use sanctions not because they work, but because they are effective for political posturing, for giving the appearance of acting tough while doing nothing of substance. Sanctions are also used simply because there are no other options between diplomacy and military action to compel change in a geographical area outside of a government’s direct control.

Special thanks to Christopher Cantwell, whose article “Top 6 Shortfalls of Ostracism” was very helpful in the writing of this article.