Schadenfreude squared: why I am against economic sanctions

I am traveling to Moscow tomorrow so appropriately enough on my today’s walk I thought of economic sanctions and tried to summarize why I oppose them.

Let’s start with elementary economics. You impose sanctions on somebody in order to reduce their welfare despite the fact that it reduces yours as well. This is a deeply irrational move since nobody can rationally wish to be worse-off. Compare sanctions with what happens in Schadenfreude. Leaving aside Schadenfreude’s ethical aspects, it can be, for a homo economicus, explained solely by recourse to our valuing of relative positions (societal rankings). We enjoy misfortunate that befalls others (even if it brings us nothing), simply because the relative distance between us and them is now less. (I assume that the other person was better-off than us before). But sanctions go further. It is Schadenfreude squared: we accept or rather impose on oneself a deterioration of own position, in the expectation that the other side will suffer even more. To be understood within the rational behavior paradigm, we have to assume that our pleasure from reduced rank distance (“the other guy suffers more than I”) is so overwhelming that we are willing to accept an absolute deterioration of our own position.

But sanctions have another effect which in my view renders them particularly repugnant. They impose a collective punishment, over people who have no influence on the policies for which they are  sanctioned. This is true whether the country being punished is a democracy or not because sanctions  cannot be so calibrated to fall only on the people who have supported the supposedly guilty government. (I will come to the targeted sanctions below.) In addition, sanctions have a long-run devastating  effect on the societal fabric. I became aware of that when comprehensive UN sanctions (total ban of imports and exports) were imposed on Serbia and Montenegro for their role in the Bosnian war. The sanctions immediately led to the veritable explosion of smuggling and crime. Obviously, whatever government were in power had to engage in sanction-busting because the country would be asphyxiated otherwise. Illegality became a matter of survival. But in order to do sanction-busting, government had to work hand-in-glove with organized  crime. (I am not suggesting that the Milosevic and Djukanovic governments in respectively Serbia and Montenegro were not anyway inclined to work with the organized crime. But I am arguing that whatever government, even if composed of saints and angels, had been in power, it would have had, for the sake of maintenance of ordinary life, to rely on organized crime.)

Once the links between government, its police and military and the organized crime became quasi-official, and people seamlessly started moving  from being heads of the police in the morning to being leaders of extortionary gangs  in the evening, the entire fabric of society crumbled. It is no longer mere corruption: it is a direct destruction of a society. These are long-term effects which are not easily reversible. In other words, it is naïve to think that once sanctions lifted, things will go back to their original position: they will not, and did not.

Now, it could be argued that the UN sanctions are often calibrated in such a way that the essential  goods (food and drugs) are not banned. This is however not knowing how  in practice UN sanctions work. Each shipment of food and drugs has to be individually, item-by-item, authorized by a UN commission. What happened doing the UN sanctions against Serbia and Montenegro (1992-95) was that the representatives of the main governments that argued for sanctions (in this case, US, UK and France) would just not show up at UN commission’s meetings. The authorization, which had to be unanimous,  would then be postponed until the next meeting and thus months would pass until a shipment would finally be authorized. At times, drugs would be shipped after their expiration date. I have no reason to believe that the UN trade sanctions imposed on Iraq (between 1990 and 2003) were not even tougher, worse and more inequitous. It has been argued that almost half-a-million people died because of the sanctions, including kids and babies. Madeleine Albright infamously said that she did not care. So is the UN in the business of killing children?

How far the irrationality of sanctions goes can be seen recently when Russia imposed its  “retortive sanctions” on EU food products. Now we do not have Schadenfreude squared as in the case of unilateral sanctions, but a Schadenfreude squared one more time, when the sanctioned side becomes a sanctioner in the hope that such ratcheted-up sanctions will end up by inflicting  more damage to the original sanctioner than to the sanctionee. But the costs to own population from such self-inflicted sanctions (as reflected in wanton destruction of foreign foodstuff in Russia) must be high. I have hard time believing that the welfare of an ordinary Russian has not been reduced by the absence of many better and cheaper European food products.

How about very narrowly, individually-targeted sanctions? That approach seems more defensible because it does not imply a collective punishment. It may be also more efficient in making the people who have taken certain decision feel first hand their consequences.  

Let me end with another type of sanctions which are not directly economic. These are sanctions on academic exchanges which have recently been popularized as a way to express disapproval of Israel’s policies with respect to Palestine (or occupied territories). These strike me as particularly ill-thought. If one wants to convince another side of its wrongs, the best, or the only, way to do that is to open a dialogue and to try to persuade that country’s political and academic community. How can that be done by cutting off contact with that community is really difficult to explain. So, in this case, as in the case of economic sanctions, we can rationally understand them only if we explain them as an extreme form of Schadenfreude.

Any rational actor interested in own welfare or welfare of its population would therefore shun economic sanctions with a possible exception  of the very narrowly targeted sanctions against the people who have directly made decisions with which the sanctioner disagrees.  For the rest, we are really in a world of slanted rationality.