Let me try to explain why sanctions on Russia are unlikely to have the desired effect and are, once again, performative theatre for domestic consumption. Talking tough, rather than acting tough.
Russia doesn’t need our money
Russia has its own currency - the ruble. That means when Vlad needs to buy a tank he orders the Russian Central Bank to debit the Russian Treasury account at the central bank and transfer that to the supplier of the tank. That’s all he needs to do - forever and for as much as he wants to do that.
New Wayland
NeilW
https://new-wayland.com/blog/the-unreasonable-ineffectiveness-of-sanctions-on-russia/
Actually that's not true. It's even more depressing as someone who understands MMT to watch someone else who understands MMT insist on its pure theoretical application and ignore the realities of what happens in practice. Of course the sanctions are going to be even more difficult for those dishing them out and of course Russia has the ability to shrug them off with minimal consequence. But in reality Russia has never managed their domestic economy for their workers and it would take them a considerable amount of time to figure out how to do so, something the regime doesn't have when most of the rest of the World is putting enormous pressure on you, your populace doesn't support your invasion of their neighbor and friends, time is of the essence because your soldiers are dying, and your oligarchs ARE affected by the sanctions because they mostly travel around in planes and yachts in Europe and spend Euros. In addition, while Russia may be able to produce everything they need, what are the chances that they actually currently do so? Transitions take time, and I don't think Russia has that resource in the amounts Neil thinks.
ReplyDeleteOut of FIFA….
ReplyDeleteFIFA and Uefa...
Delete@ dave
ReplyDeleteThis is the stated rational of the US for imposing sanctions, which had little to do with Ukraine. This was just a convenient excuse.
We'll see how true is over time. The Russian analysis that I see is that the West is "rational" in the sense of preferring utility understood as pleasure-seeking. Russians are non-rational in the sense of having traditional values that supervene over utility in this sense but not utility in a higher sense.
John Stuart Mill: “It is better to be a human being dissatisfied than a pig satisfied; better to be Socrates dissatisfied than a fool satisfied.” (Utilitarianism)
"But in reality Russia has never managed their domestic economy for their workers and it would take them a considerable amount of time to figure out how to do so"
ReplyDeleteHave you not studied the history of the second world war? Don't they teach that any more? How quickly were economies restructured for war?
As I said:
In 1940 JM Keynes published a pamphlet called “How to pay for the war” where he explains how equipment for a war is produced and distributed and what the population must do to enable it. In it is the following: “In a totalitarian state the problem of the distribution of sacrifice does not exist. That is one of its initial advantages for war”.
This mistake is failing to separate needs and wants, and failing to recognise that necessity is the mother of invention.
Ukraine exports most of the world's neon gas, which is required in computer chip manufacture. How is the West going to replace that, now it can't pay for it?
There's also the other small point. People who hold their savings in foreign currency are not patriots and likely oppose Putin. The west has just 'taxed' those people.
ReplyDeleteIf you believe that 'taxing the rich' reduces their power, then taxing away the savings of those opposing Putin has just reduced their power to oppose him.
I'm looking forward to seeing those championing this approach squaring that circle.
https://www.quantamagazine.org/an-ancient-geometry-problem-falls-to-new-mathematical-techniques-20220208/
DeleteNeil they only export it to sell to get USDs … USD zombies…
ReplyDeleteThey’ll just get it somewhere else..,