Noah Feldman

Sanctions Test Faith in the Power of Economics

The European-American response to Russia’s invasion of Ukraine represents a watershed in the contemporary understanding of how nation-states behave and what motivates their leaders to act. It pits two leading theories of international affairs against each other. The difference between the two theories may even explain why there is a war going on at all.

The post-Cold War belief prevalent especially in Western Europe is that states and leaders are motivated by rational economic self-interest. By this reasoning, squeezing Russia economically will bring Russian President Vladimir Putin to a breaking point. Either he will back down and leave Ukraine, or Russia will collapse. In other words, economic warfare is a form of warfare as effective as bombs and guns.

Putin’s apparent faith in military force represents the other theory, associated with old-school international affairs ideas like realpolitik and machtpolitik (realist politics and power politics). According to that perspective, if a country’s troops can occupy another nation and no one can push them out by force, the occupier wins, sanctions or no sanctions.

These worldviews overlap. Advocates of economic warfare admit that missiles and tanks also send a message. Proponents of military power must acknowledge that wars can be won and lost because of one country’s greater capacity to pay for and manufacture arms. Both agree that before going to war, rational state actors try to weigh the costs and benefits of fighting, including its economic consequences. And both agree that costs and benefits include the well-being of citizens and the domestic prestige of leaders.

The divergence between the worldviews comes down to their answers to whether states and leaders can be sufficiently motivated by economic pressure alone to give up on a war of invasion that they otherwise would choose to pursue.

Europe says yes. It bases its logic on the interconnectedness of the contemporary economic world. Eventually, it thinks, economic pressure will win. Its evidence is the remarkable period of peace and prosperity in Western Europe since World War II (if you leave out the Balkan debacle of the 1990s).

Putin says no. His historical evidence is that it’s difficult to name even a single example of a country that occupied another and withdrew because of sanctions alone. The basic intuition, going back to antiquity, is that force wins. Deploying economic sanctions without the threat of force is, for him, a signal of weakness.

Put another way, Europe thinks of economic sanctions as a tool of warfare like a siege or a blockade. Putin thinks a siege is only a siege if you back it up with an army, and a blockade is only a blockade if a navy makes it real.

And both sides know that, for the time being at least, Germany is dependent on Russian gas, oil and coal for its energy needs. That means even economic pressure cannot be total.

This disparity of worldviews goes a long way to explaining the run-up to the war. Even as the US government made public its intelligence assessments that Russia had decided to invade Ukraine, many skeptics in Europe and the US continued to believe that war could be averted. They reasoned that Putin couldn’t possibly think the economic costs would be small enough to justify the gains he might make by invading.

Putin had already determined that no power outside Ukraine would be willing to use force to oppose the invasion. From this premise he surely reasoned that the costs of economic sanctions would not displace Russian troops. From there he seems to have concluded that the gain to Russia and himself in prestige and power would outweigh the costs of sanctions.

The same thinking gap may help explain why the fighting is happening. According to one influential theory, wars happen when the two sides either have different information about each other’s power or have radically different understandings of the likely consequences of their conduct.

This idea is a form of rational-actor theory. It assumes that, if both sides knew who would win a war, neither would have to fight it. The certain winner would just take what it wanted, and the certain loser would give in without a fight. Wars happen, according to this account, when no one can be sure what will happen next.

The Ukraine war fits this description. Most militarily informed observers are fairly sure that Russia can occupy Ukraine, albeit not as quickly as it probably expected and not without quite a few casualties. But can economic sanctions suffice to make Putin leave or otherwise defeat Russia? That question awaits an answer.

The only way to know is by fighting the war, imposing the sanctions and seeing what happens. Europe sees it one way, Putin another. Their interpretation of their relative strengths may not differ much. Their predictions about what will happen when the dice are rolled differ markedly — because of their different theories of war and economic power.

Rational-actor theories, whether economic or militaristic, oversimplify reality. Leaders make mistakes. Political ideology shapes self-interest. And sometimes, there are no facts, just competing predictions based on competing theories.