Episode Transcript
Speaker 0 00:00:00 Thank you all for coming tomorrow's and markets tonight's topic is our economic sanctions ever defensible. I will let Dr. Salzman do the formal intro for that, but if you are joining us, um, via podcast, be sure to like great and subscribe to the podcast to share it with your friends. And if you want to join us live and take part in the discussion in Q and a that we do at the end of these sessions. Fourth, Thursday of every month at 5:00 PM. Pacific time, 8:00 PM. Eastern time, uh, links are in the bottom of the podcast. Um, in, in the description, you can find the links or go to the ATLA society's website at society.org/events. And with that, I will hand it over to our host, Dr. Richard Salzman.
Speaker 1 00:00:37 Thank you, Abby. And I want to, I want to register my, uh, amazement and cuz Abby, I think you're coming from a car. I think you're driving somewhere. So tell me where, where are, where are you and how high you're driving, where are you driving to?
Speaker 0 00:00:53 Yes, so, uh, my boyfriend is moving back to the great state of Michigan. So I am helping him road trip, uh, like came, flew down last minute to help him bring all of his stuff back. So it's 20, 22. It's amazing. I've been able to work from the car every day, almost everywhere. So tad, you know, I use my phone as my hotspot and off we go.
Speaker 1 00:01:15 I think it's great. And thank, thank you for letting me in. Thank you for letting us invade your privacy there for a moment. Yeah, I just say Abby, Abby, isn't it. Isn't it part of, part of what Atlas society is doing is, uh, it's, it's very high tech and it's very virtual and it's kind of cool. It's like using every medium possible. Uh, I remember the first time you guys said to me, uh, Hey, you wanna do Instagram videos? And I said, uh, what's Instagram. I didn't even know what, I didn't even know what it was. So you've taught me a lot. You guys have taught me a lot. I love this. Thanks Abby. Yeah,
Speaker 0 00:01:50 Of course.
Speaker 1 00:01:50 Uh, as I normally do, let me just, let me just read in, I'll just what's that.
Speaker 0 00:01:56 Oh no, I will mute. And it's all it's off to you.
Speaker 1 00:02:02 Uh, as I normally do, let me just read into the record, the little summary I gave when I invited people to this. And, uh, the other thing we're doing is we're trying to have me just limit myself to the first 25 30 minutes, but the whole thing's 90 minutes. So it's really to open it up to others, to discuss debate, push back against me, but also the Atlas society's using the first 30 minutes to create, um, no podcasts of stuff like that. So, so some of this is a little formalistic, but we'll open it up after this. Okay. Here's how I wrote the summary of tonight's topic with the title of which is, are economic sanctions ever defensible? All right. Here's my summary, many nations recently have imposed economic sanctions on Russia. Is this proper? Is it effective in her essay? The roots of war 1966 Iran said, quote, the essence of capitalism's foreign policy is free trade.
Speaker 1 00:03:08 That is the abolition of trade barriers of protective tariffs of special privileges. The opening of the world's trade route to free international exchange and competition among the private citizens of all countries dealing directly with one another. But we also know if you know the history. We also know that she opposed us trade with America's sworn enemies, mourn enemies, including the USSR where she immigrated from. So in, in the session tonight, I wanted to really discuss if and when economic sanctions are justified and what are their typical effects for good or ill. And I'm gonna suggest that like protectionist measures, which are applied even during non-war, uh, they often hurt the ones who impose the protectionist measures. That's the, that's the opening. That's my summary. Now I just wanna say the first thing I wanna, I don't know. What's a, whether it's a confession or I am an economist and I do believe most economists are biased.
Speaker 1 00:04:26 I hope I'm not. I think most economists are biased toward free trade. So they almost never want to hear normally, unless they're Kasians who, who are protectionist, they, they really don't want to hear an argument for economic sanctions, which could be classified as a kind of protectionism for any reason. That's not actually my view, but I do lean in the direction of Liberty. All right. So here's what I want to say. And then I really do hope you will come back at me because I think there are, I'm not gonna tell you in advance, but I think there are weak parts of my argument. So see if you can find them and go at me.
Speaker 1 00:05:11 This is in a way, uh, this economic sanctions debate is part of a, I have already done Atlas society seminars or webinars on foreign policy. And so I wanna leverage off that a bit. I've talked about an egoistic America first foreign policy. I've talked about applications to the recent conflict in Ukraine, Russia. So for those of you who may have missed that, go back and look at those. But I just wanna lay out as context, the principles I go by and how I apply them to economic sanctions. Okay. The first thing I've been saying is, and this may sound very black and white, but I'm a black and white guy. I'm an either or Aris Italian guy, a country has to define first and foremost, its friends and folks. It's friends and enemies. Now, you know, in your own personal life, you have friends and enemies, but it sounds very black and white, you know, because there are people in the middle, right?
Speaker 1 00:06:18 People who used to be your friends and then betrayed you, who used to be what you thought were antagonists, who came to love you. So the first thing people most notice is this doesn't sound black and white. It sounds like a mixture of things, including gray, right? The reason I bring that up is I've long been over the view. And I think it's actually the objective issue, but that's not important that a nation, just like a person does have to identify the nature of the nations they're dealing with. Just like you have to, through your own, self-interest identify the essence and the nature of the people you're dealing with. Now, what does that mean in international relations? It's often referred to as allies, allies, and enemies, who is an ally? Do they agree with everything you believe is, is their constitution identical to yours? No, but that's true in personal relations as well, right?
Speaker 1 00:07:22 Your friends are not clones of you. They share values with you. All right. Let's get to America. What is in America's self-interest if I'm right about America, America's essence is Liberty America's essence is rights. America's essence is a constitutionally limited government devoted to the protection of individual rights. Now, does America always stand up for that ideal? No. Is it moving away from that ideal in recent decades? Yes. Is that a problem? Yes, but unless we hold that up as a standard, we're gonna have no rational objective basis for dealing with other nations, but I confess this does become more difficult as the us becomes more mixed. And that is exactly the problem with our foreign policy in recent decades. I would say actually since world war II, the premises are very mixed. The system is very mixed. We have not definitively declared war against any country since world war II.
Speaker 1 00:08:31 And that's a problem because it's actually required philosophically and constitutionally, by the way. And I don't think, as I've said before, I don't think it's coincidental that the fact that there is no definitive method of identifying F and friends by American foreign policy and relatedly the fact that there has been no definitive declaration of war since world war II has caused America to lose five wars in a row. The United States have lost five wars in a row. It is very terrible. It's very tragic. If you love this country, you don't want it entering wars or losing wars. We can talk about what standards I'm talking about for declaring those failures. But that to me is the record and that the record has to be changed and reversed. Now, what is a friend or enemy when it comes to international relations? I would say it isn't a country that endorses every value and ideal that America stands for.
Speaker 1 00:09:36 That's a very high standard. That's not really doable, but go negatively. Let's go on the negative side. What is a foe? I think a foe is this. These, some of these are just obvious. They declare war against us. Now that that's an obvious one. If a country declares war against you, they're a foe. That's pretty easy right now. What about a country that doesn't declare war against you, but says in every other speech, by a leader, um, death to America, I, I think you know who I'm talking about. This would be Iran or death to Israel, death, to an ally. I think that's an enemy. I think that's the equivalent, not of a, of a direct murderer, but a, an attempted murderer death to America means the end of the existential end of America. That is a foe. Anyone who says that, especially an official, I don't mean some crazy person on the street.
Speaker 1 00:10:34 I mean the head head of a country that says that repeatedly as part of their speed is a foe. Now it, it, it should be obvious that if a country funds a, an attack on us, like they don't declare war, they don't say death to America, but they fund a group of 19 people who attack the Pentagon, the world trade center, and other things that would be Saudi Arabia. If you know, from 2000, that's an enemy of the United States. So, I mean, those are just three examples. People always want examples. I'm NA I'm trying to name principles and then examples where you could classify countries as enemies. Now it's harder to, okay. Allies are obvious allies. For example, during world war II, Britain was Britain an ally. Yes. Why they share certain philosoph, political, legal principles with us. They're basically our parents, the Brits were our parents.
Speaker 1 00:11:38 The Brits made America possible by establishing colonies. Yes. We fought with them twice. Yes. We had the revolutionary war. Yes. We had the war of 18, 12, but it is undeniable that by world war one and two Britain was our ally. So if Britain was attacked, you can defend your friends legitimately at war. Uh, so the, the ally thing might be, I think might be easier. So I'm not gonna spend much time on that, but the idea of an ally they're obviously not, um, attacking you or betraying you, then the only question is how much they support you, how much they align with you. That's an easier one. Now I wanna say something about the topic tonight is economic sanctions, but let me introduce this continuum that might help with the analysis. And I think is actually the reason why this is murky to most people.
Speaker 1 00:12:36 I think the continuum is cultural sanctions, diplomatic sanctions, economic sanctions, military sanctions. Now military sanctions is actually a weird word, cuz military really means bring out the guns and bring out the munitions and start killing the enemy. So I, but I, but I'll, I'll refer to all of them as sanctions in the sense of punishments, sanction means punishing. Now, what does cultural mean? Cultural would be something like, we're not gonna participate in your Olympics or we're not gonna have cultural. We're not gonna let your, we're not gonna allow the Mo you know, the bullshit by ballet dance in New York or something like that. So, you know what I mean? By cultural, there can be cultural cutoffs where you're trying to punish another country. Culturally that's ki I think like the bare minimum, that's like a small little slap on the wrist if you will, but it's still a kind of punishment.
Speaker 1 00:13:37 And it's telling the other side, we consider you an enemy. So here's the punishment. Uh, you wouldn't do it to a friend. I don't think, but okay. Now diplomatic, what is diplomatic? Diplomatic is like close. The embassy. Diplomatic is very important because state departments in each country have, uh, embasies. They very important by the way, a legitimate function of government to have a state department that basically serves as a conduit to talk to other countries. And so, so embasies and diplomatic missions and things like that are very important. They're basically talking and you can close embasies, but notice what that means. That is much more, I think I'm going on a continuing that is much more concretely, a punishment to say, not just you can't have cultural exchanges with us, but we're gonna close the embassy. We're literally not gonna have an ongoing dialogue anymore between the governments.
Speaker 1 00:14:39 That's really serious. Now, economic that's our topic for economic economic would be, we're not gonna let you trade with us anymore, or we're going to punish. Now I'll speaking from an American standpoint, say we're not gonna allow American citizens or American companies to buy stuff from you anymore. We're going to stop. We're going to criminalize if necessary, that kind of interaction and action. And I hope you can see that. I think that is much more serious than both cultural and diplomatic sanctions. Economic sanctions are much more serious. Now we're talking about people's livelihoods. We're talking about people's material comfort, but it's plausible. Isn't it. If you truly had an enemy, you would not want to buy their stuff during some kind of conflict where they would benefit by that. And the last one is military, which I won't get into because obviously once you say, declare war say this enemy is so bad that not only are we gonna stop cultural exchanges and diplomatic and economic ones, we're gonna start shooting them and killing them and invading them that that's pretty straightforward.
Speaker 1 00:15:57 Okay. Here is the most controversial thing. I, I think I will say tonight that continuum for most people is a reason to say we don't have to identify friends and PS. We can have a murky middle, a murky gray middle, where, ah, they're, they're not really allies. They're not really our friends, but they're not really our PS in the sense of wanting to existentially eliminate us. Therefore let's apply this kind of continuum Salman's been talking about. And, you know, and even progressively at first cultural, then diplomatic, then economic apply these, uh, sanctions that is ex notice. That is exactly what's happening today with Russia, by the way, it also happened with Japan. I dunno if you know this before world war II, before Pearl Harbor, before Japan declaring war against us and literally attacking us. Um, there were sanctions, there were economic sanctions against China, Japan, and many people think.
Speaker 1 00:17:09 And I do think that you have to be careful about these things because when you start closing down embasies and throwing out diplomats and imposing economic sanctions, I think these are acts. These are early acts of war and you, and I'm not against war if it's launched for self interested reasons. And so I don't want you to get the impression that I'm against any of these, uh, variations of conducting war, but they're basically variations of conducting war and I'm very black and white about this. You have to declare war or not declare war <laugh> and you only declare war against definitively define enemies. And that's not easy. That's not easy for a lot of people to do. I believe an enemy of the United States, as I said before, is one that either declares war against the United States or is on record saying, we want the United States to go out of existence.
Speaker 1 00:18:18 So they're tr they're literally an existential threat or more easily. They've actually attacked us like Pearl Harbor, like nine 11. But here's the hard part. Here's the weakest part of my argument. Anything short of that? There should be no sanctions. That's a really hard thing to say. Imagine a friend who has really started to sound like not your friend, they haven't fully betrayed you yet, but they're starting to act in a disloyal manner or they're starting to treat your other friends badly. You have to notice you have to make a judgment. At what point would you reprimand your friend? At what point would you say you're not my friend anymore. At what point would you try to punish your friend by ostracism or some other man? We're not talking about physical force here. Obviously we're not, not talking about war. I'm just trying to use an analogy of when, what, by what standards would you judge your friends and when they go off the rails, so to speak and what would you do about it?
Speaker 1 00:19:20 So I only have about five minutes to go. So I wanna sum up here. I'm saying that economic sanctions should only be as all these sanctions, cultural diplomatic, the whole continuum should only be imposed on enemies on P by the method. I have defined N and not on anyone else. And there should be no sanctions about any, any country that is short of that. It's a controversial position. I understand it's not even a, it's a, not a majority position. The position I'm giving is here's a minority view. I understand, um, AP applying it to Russia, let me apply it to Russia. Ukraine right now is Russia a country wholly in, in accordance with, uh, Amer American principles of Liberty and constitutionally limited government answer. No, they're not, but neither is Ukraine by neither by the way is most of Europe. Okay? But the more important point is, and here's a very difficult thing for me to admit America itself.
Speaker 1 00:20:37 Sadly, last 20 years is not abiding by the principle of Liberty. So it makes this very meaning. The us is actually politically and philosophically merging, merging converging with getting close to the kind of authoritarianism we're seeing in Europe, in Russia, in China. I wish this weren't true, but it is the us was moving toward more liberal liberal in the good sense, Liberty oriented direction in the eighties and nineties under Reagan and even Clinton that has been reversed entirely over the last 20 years. So it makes this whole analysis much. Murier because there's not as much of a gap. There's not as much of a difference, sad to say between the United States and these other regimes. However, it's a fact Russia, oh, let's go by. Our yardstick. Has Russia declared war against the United States? No, as Russia's leaders said existentially death to America, no. Has Russia attacked our allies?
Speaker 1 00:21:54 Now here's a Murier point. A lot of people will say that Ukraine is our ally. I don't think Russia has attacked an American ally. Ukraine is not an American ally, sad to say, but it's not. It's not in NATO. That's an important issue. It's not in NATO. Why is it not in NATO? NATO has actually expanded over the last 20 years. It's added countries, countries that show that they were not corrupt and could handle their weapons. And that's what NATO is. It's a military Alliance, right? Ukraine prior to this invasion was so corrupt and so unable to commit to the security of the weapons it had under its control that even America who wanted to expand NATO membership said Ukraine is unfit to be a member of NATO. That is very revealing. I only say it from the standpoint of, it's not an ally at the United States now under threat from Russia.
Speaker 1 00:23:00 Of course, Ukraine is eager to mooch and beg and cry and complain to the west that it wants Western support. Of course it does. But that doesn't mean it's a us ally. So I would put it as, uh, this does not mean, I hope you realize the logic of it would not mean this is defense of Russia, or it's an exoneration of Putin or anyone who says this is a Putin stooge. None of that is true. The question is what principles guide foreign policy. And I I've laid them out. They do seem black and white. I do think they should be black and white. If we go by the gray of it, we're gonna make, we're gonna Bumble into yet another world war. The us has already done this twice for Europe and they were both mistakes. And I worry that we're gonna go into world war three, bumbling into a kind of humanitarian quote, unquote, I put this with air quotes.
Speaker 1 00:24:06 It's not humanitarian. All it's against America's self interest to sacrifice American fortune and lives and blood for basically a European civil war. There's a European civil war going on. And I say something like Europe, uh, three strikes. You're out. We've already tried this with world war. I we've already tried this with world war II. The results for America, the results were disastrous that did not help America in either case. And I think world war II would be even worse, but both parties I've said this before. Both parties are moving us toward world war three, the Republicans Democrats alike. And I believe if this happens and it's against Russia and China, China and Russia have a lot. This will be the end of the American experiment. It'll be over. If we enter world war three, we're not capable of winning it. We're not morally prepared to win it.
Speaker 1 00:25:07 The us itself is going through a civil war. Half the country hates America. I won't say which half it is. It's hard to tell sometimes, but the American culturally is going through a civil war and it is in no position to be fighting a war between two European thugs, U Ukraine and Russia. And, uh, but I, back to my original point, economic sanctions sound like a narrow thing, but the us has been pursuing this and doing this to the great harm of Americans. By the way, just look at your, the price you pay at the pump. We rely heavily on Russian gas, uh, natural gas and oil. And I don't believe any of that should be stopped at all. I'm not happy with what Russia did with Ukraine, but I understand it. But the answer is not to penalize Americans by preventing them from buying Russian stuff.
Speaker 1 00:26:05 We can talk all we want about, and there's a long historical literature on this economic sanctions. Don't work. If work, if by work means change the regime or change the bad behavior, the studies are overwhelming. 90% of the cases, Cuba, Iran, Russia. They don't work in the sense of they do not accomplish what the sanctions claim in the more recent case, by the way, the sanctions were supposed to prevent Russia from invading Ukraine at all, that didn't happen. The sanctions were imposed and Russia invaded anyway, and then the sanctions were supposed to prevent Russia for being there very long. That's wrong. So I don't really wanna focus much on the impracticality of sanctions. They're very impractical. The, the question is the morality of them. I think it's, I think they're actually imoral if you impose them on a country, that's not actually an enemy. So see, my, my moral point is you cannot impose sanctions on what amounts to a non enemy that I I'm saying non enemy.
Speaker 1 00:27:16 I'm not saying really friend, I'm just saying non enemy. That's against American self interest. One last point I'll make, and then I'll stop. It's very interesting that countries that are most authoritarian, when you impose sanctions, they have the least effect. So there's a sliding scale. So to speak, if you take a country like Cuba, North Korea, or the Soviet union and impose sanctions on them, it doesn't deter that dictators at all, they're undeterred. They don't care about the negative effects on their citizens. That's the whole point of an authoritarian regime. They don't care about their citizens. So sanctions in that case, precisely targeted against countries that we're trying to make more liberal they're least effective against precisely those kind of countries. And if you try to impose them on countries that are liberal, of course, that's just ridiculous. So that's another just practical aspect of this.
Speaker 1 00:28:18 This has always been true. It's true. Also a foreign aid, by the way, if you see a country of starving citizens starving because their leaders are so barbaric and dictatorial, guess where the aid goes. The minute you send the aid into those countries, it goes to the leaders. You're basically feeding the leaders who are, are tyrants. So it's never been a practical policy. The question is why people keep pushing this? I think the reason they push it is they see economic sanctions as a kind of gray area of like a halfway house of ways to deal with countries that they've neither designated friend or foe, and they don't know what to do. And that's true. If you ask Americans today, is Russia a friend or a foe of America? The polls are completely mixed. It is not 90%. They are enemies. And that I think is why these economic sanctions are, are enacted, but they're still bad. All right, I'm gonna stop there. So I would love comments, questions, pushback criticism,
