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Economic Sanctions: America's Folly

Speaker: Gary C. Hufbauer
November 10, 1997
Foreign Affairs

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Note: Remarks as prepared for delivery

Woodrow Wilson’s Legacy

President Woodrow Wilson sparked America’s love affair with economic sanctions. After the carnage of the First World War, Wilson proclaimed:

A nation boycotted is a nation that is in sight of surrender. Apply this economic, peaceful, silent, deadly remedy and there will be no need for force. It is a terrible remedy. It does not cost a life outside the nation boycotted, but it brings pressure upon the nation that, in my judgment, no modern nation could resist.

America has tempered much else in the Wilsonian vision. We do not expect the United Nations to broker disputes between great powers. We do not champion an independent state for each ethnic nationality. We do not elevate democracy above all other interests.

The Grand Experiment

But when it comes to economic sanctions, we not only embrace the Wilsonian vision, we embellish upon it. In fact, we use sanctions so often—nearly 100 times this century—that they have become America’s grand diplomatic experiment. This experiment, repeated many times, shows that three of Wilson’s assertions, seemingly self-evident when declared at Indianapolis in 1919, are quite often and quite simply wrong:

  • A nation boycotted is not in sight of surrender: recall North Korea, Cuba, and Iran.
  • In achieving “high” foreign policy goals, sanctions are not a substitute for force, but they can be a prelude to force—consider Iraq, Haiti, and Bosnia.
  • Contrary to Wilson’s belief, economic sanctions have turned out to be an offer that nearly every target can refuse—not only powerful China, but also powerless Panama.

In the face of this doubtful record, Presidents Carter, Reagan, Bush, and Clinton nevertheless embraced economic sanctions as a major instrument in the U.S. diplomatic repertoire. Indeed, in the post-Cold War era, sanctions have become the lead violin of American foreign policy. The federal government now imposes sanctions, small and large, against at least 40 countries; joining in the diplomatic laboratory, state and municipal governments have enacted some 25 sanctions in last 2 years, and another 16 are pending. The most recent sanctions are directed not only against our adversaries but conspicuously against our allies.

The conventional rationale for America’s folly is straightforward:

  • As the superpower standing astride the global economy, the United States has a special responsibility to deal with misdeeds and despots in many places;
  • Military force is too costly and customary diplomacy is too feeble;
  • Economic sanctions must therefore be applied like a global salve, liberally to every wound.

Lurking behind the conventional rationale are pragmatic reasons that too often come into play:

  • Congressmen, governors, and mayors who sponsor sanctions can reap all the political thrill of playing “Secretary of State for a Day” without bearing any of the responsibility.
  • The grievances of religious and ethnic minorities at home can be answered (and their votes acquired) by dishing our punishment to governments abroad.

Consequences of the Grand Experiment

“Seward’s Folly” would have had no great consequence, even if the Alaska purchase had turned out a great boondoggle instead of a great bonanza. All that would have been lost was $15 million. The same insignificance cannot be attributed to America’s grand experiment with economic sanctions. President Wilson was right on one key point, if not for the reasons he imagined. Sanctions are a “terrible remedy.”

Economic sanctions today cost the United States some $15 to $20 billion in lost exports, depriving American workers of some 200,000 well-paid jobs. It would be one thing if these costs were compensated from the public purse, so that everyone shared the burden; it is quite another when the costs are concentrated episodically on individual firms and communities.

More important, economic sanctions often wreck havoc on innocent people and increase the power of the very leaders we despise. When applied broadside—as against North Korea, Cuba, Iran, and Iraq—economic sanctions mix the vices of carpet and neutron bombing. They hit hardest the most vulnerable—the poor, the very young, the very old, and the sick. They leave unharmed, indeed strengthen, the real targets—political, military and economic elites. Indeed, those in power relish adversity. Like Mussolini in 1935, they defiantly declare:

At the League of Nations, they dared to speak of sanctions. To sanctions of an economic character we will reply with our discipline, with our sobriety, and with our spirit of sacrifice. To sanctions of a military character we will reply with orders of a military character.

Bombast is not the only benefit to those in power. They control the borders and thus profit from smuggling. They control the ration tickets and thus tighten their grip over the populace at large. It is one thing to sanction a semi-democratic country like South Africa, Pakistan, or Indonesia. In such cases, sanctions applied adroitly may be cited by domestic dissidents to alter internal policy. It is quite another matter to sanction a country ruled by Kim Il Sung, Castro, Saddam Hussein, or an Ayatollah.

Most important, secondary sanctions imposed by America against its allies and friends—the approach pioneered by Senator Helms and Congressman Burton, refined by Senator D’Amato, and now emulated by dozens of state and municipal governments—furnish an international rallying flag against American hegemony. Americans above all should understand symbolic offenses. The British tea tax imposed no real economic hardship. It did inspire a revolution against the greatest power of the day.

What Can be Done?

The path out of America’s folly is clear. But it will require decisive steps by the White House. Five steps are essential.

First, the United States should seldom impose sanctions when it cannot marshall support among its friends. To paraphrase Richard Haass, this is a game for possees, not Lone Rangers. Ideally, the U.N. Security Council should support the sanctions. At a minimum, our NATO allies, or made-to-order possees in Latin America, Asia, or the Middle East, should endorse the effort.

Second, we should realize that sanctions typically have more value as carrots than sticks. In other words, they are more useful when lifted than when imposed. This was recently illustrated by the U.S.-China summit agreement restraining Iran’s delivery of missiles and nuclear materials to Iran in exchange for U.S. relaxation of nuclear technology controls. Another example is our complex and costly diplomacy with North Korea.

Third, as a corollary, the president must have unfettered freedom to lift sanctions step by step, when he obtains appropriate cooperation from the target country. Sanctions legislation enacted by Congress, states, or municipalities should be vetoed, or challenged in court, when it does not contain a national interest waiver exercisable by the president.

Fourth, in the great majority of cases, sanctions should target elites, not the populace at large. Iraqis are not our enemy. Nor are Cubans. We can be imaginative in targeting elites. We can single out individuals and agencies that give offense or outrage. We can devise civil and criminal punishments so that their persons and property are at risk whenever they travel or do business in the civilized world.

Fifth and finally, broadside sanctions should be seen—by the White House, the State Department, and the Pentagon, as well as by the foreign target—as a prelude to force, not as a substitute for force. Powerless people do not deserve despicable governments. Not in Iraq, not in Nigeria, not in Cuba. But unless we are prepared to remove bad governments with military force, we have no business heaping prolonged punishment on innocent people.

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