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--:-- Noel King: When the U.S. and NATO allies decided not to send troops to Ukraine, they simultaneously decided to hit Russia with sanctions. The aim? To strangle Vladimir Putin's economy and devastate the finances of his oligarch friends and frenemies.
--:-- Noel King: We have purposefully designed these sanctions to maximize the long-term impact on Russia and to minimize the impact on the United States and our allies.
--:-- Noel King: In late June, the Biden administration announced yet another round of sanctions, banning, among other things, the import of Russian gold into the U.S.
--:-- Noel King: If you're a glass half-empty person, you might look at this and wonder, after all these months, are sanctions working? If you're a historian, you might ask, have they ever?
--:-- Noel King: Coming up on Today Explained, The Historian Asks, and we ask the historian.
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--:-- Noel King: It's Today Explained. I'm Noelle King.
--:-- Nick Mulder: Sanctions are a way of fighting a war without fighting in a war.
--:-- Nick Mulder: They do really involve the actual use of force or sometimes a threat of force, but they don't necessarily have the same intensity always as kinetic warfare.
--:-- Nick Mulder: That's me, Nick Mulder. I'm an assistant professor of history at Cornell.
--:-- Noel King: And we talked to him back in February about his new book, The Economic Weapon, the rise of sanctions as a tool of modern war.
--:-- Nick Mulder: You have war or kinetic warfare as the most intense kind of use of force.
--:-- Nick Mulder: You have attempts at persuasion or coercion that can be threats or message sending.
--:-- Nick Mulder: And sanctions are somewhere in between.
--:-- Nick Mulder: Nick says to understand how the U.S. uses sanctions, we need to go back a century.
--:-- Nick Mulder: It started happening about 100 years ago, during and after the First World War.
--:-- Nick Mulder: The nation slithered over the brink into the boiling cauldron of war.
--:-- Nick Mulder: And at that time, that war was so terrible that it involved trench warfare and enormous amounts of casualties on a scale that people weren't necessarily familiar with.
--:-- Nick Mulder: There are perhaps 10 million men dead of this war.
--:-- Nick Mulder: And perhaps 100 million persons to whom death would be a blessing, writes an American ambassador in Europe.
--:-- Nick Mulder: And he adds, the hills about Verdun are not blown to pieces worse than the whole social structure and the intellectual and spiritual life of Europe.
--:-- Nick Mulder: And the thing they wanted to do most was to try and avoid a repetition of that war.
--:-- Nick Mulder: And in order to stop countries from going to war, they needed something that was powerful, potentially as powerful as war itself, but that wouldn't be war itself.
--:-- Nick Mulder: And that's kind of where sanctions come in.
--:-- Nick Mulder: So in the war, they had used this instrument, a policy of economic blockade, trying to weaken the adversary with deprivation, trying to cut off their access to exports and imports and income, money, goods, finance, commodities.
--:-- Nick Mulder: And that became the model for economic sanctions.
--:-- Nick Mulder: And the first organization that had the power to do that and to use sanctions was the League of Nations, so the predecessor to today's United Nations.
--:-- Noel King: When is the first time that we see sanctions, like a blockade? You can't get food in or out.
--:-- Nick Mulder: When is the first time we see it used, and used in a way that you might say, okay, that worked, that's why we kept going with this?
--:-- Nick Mulder: So initially, because the use of blockade in World War I had been so severe in its effects on civilians, the hope of the people in the League of Nations was that they could use the sanctions instrument as a pure threat so that you wouldn't actually have to implement it because they thought people still have this memory of how much hunger they were suffering from in the war.
--:-- Nick Mulder: No one in their right mind is going to actually risk any kind of political behavior that would prompt this instrument to be used against them.
--:-- Nick Mulder: And the times that they used it successfully were in the 1920s.
--:-- Nick Mulder: So there were two incidents, two small border wars in the Balkans at that time, Yugoslavia, Albania, and then Greece.
--:-- Nick Mulder: And in two cases there, there was a border war that broke out.
--:-- Nick Mulder: In the case of Greece, it actually had a very funny name.
--:-- Nick Mulder: It was called the War of the Strayed Dog.
--:-- Nick Mulder: Okay. Why? I mean, I'll leave it to your imagination how a strayed dog can lead to a border war.
--:-- Nick Mulder: Okay. But, you know, very sort of small scale incidents, but they had a powder keg potential, right?
--:-- Nick Mulder: They could set off another war.
--:-- Nick Mulder: After all, the First World War itself had started with the assassination of this Austrian Archduke, Franz Ferdinand, in 1914 in the Balkans.
--:-- Nick Mulder: So everyone was very worried that if you let these small wars rage, ultimately they're going to become a sort of spark in a tinderbox and they're going to lead to a much bigger great power conflict.
--:-- Nick Mulder: So it was important to nip them in the bud quickly.
--:-- Nick Mulder: And in two cases, first in 1921 against Yugoslavia, and then in 1925 against Greece in this War of the Stray Dog, the League of Nations threatened to use sanctions if they didn't restrain themselves.
--:-- Nick Mulder: And both of those times that seemed to work and the situation was quickly de-escalated.
--:-- Noel King: Was anyone at the time making the case like we going to avoid trench warfare we going to avoid guys shooting at each other in an open field but if we do this we going to be starving people to death?
--:-- Nick Mulder: Yeah, yeah.
--:-- Nick Mulder: So that was very explicitly the threat.
--:-- Nick Mulder: And that's really one of the paradoxes of sanctions, particularly in this early period, that they are meant as a deterrent.
--:-- Nick Mulder: But in order to do that, the threat needs to be so total and severe that if the actual, you know, your bluff gets cold, you then have to do things that are very, very inhumane and you have to target civilians.
--:-- Nick Mulder: And interestingly, at the time, there were also feminists, for example, who wrote to the League of Nations and said things like, women and children, they don't support war.
--:-- Nick Mulder: They're not the ones who are pushing governments to go to war, but they are now being targeted.
--:-- Nick Mulder: That's unfair.
--:-- Nick Mulder: But then the sanctionists, the people who designed the sanctions said, sorry, but actually they too need to suffer the consequences or there's not going to be a kind of broad public opinion that is going to move towards peace in the country.
--:-- Nick Mulder: So you have to target people who they actually accepted were innocent.
--:-- Noel King: God, that's fascinating.
--:-- Noel King: I wonder what the backroom conversations were like when this is all being conceived of the idea that, yeah, women and children are civilians.
--:-- Nick Mulder: Normally, we're able to keep them out of the shooting until we can't.
--:-- Nick Mulder: But sanctions affect everybody right away equally because everybody starves together.
--:-- Nick Mulder: A seven-year-old who wouldn't go out onto the battlefield is going to starve along with the 21-year-old who would.
--:-- Noel King: I want to ask you about when a shift started to happen.
--:-- Nick Mulder: So sanctions were originally conceived as a way to keep peace on the European continent.
--:-- Nick Mulder: And they did work to prevent war between smaller countries.
--:-- Nick Mulder: When did that start to change?
--:-- Nick Mulder: Yeah, it began really to change when there was a massive economic crisis that was global, the Great Depression.
--:-- Nick Mulder: And that began in the late 1920s, and it got much worse in the early 1930s.
--:-- Nick Mulder: And one of the side effects of the Great Depression was that there was a very broad global turn towards nationalism.
--:-- Nick Mulder: People became much more distrustful.
--:-- Nick Mulder: People become more fearful.
--:-- Nick Mulder: They start to blame certain groups for economic collapse or for economic loss.
--:-- Nick Mulder: And that also led to a number of countries to embark on a much more aggressive attempt to revise the territorial order the international system that would be produced by world war one.
--:-- Nick Mulder: And those are countries like Mussolini's Italy which was the first fascist regime, Nazi Germany, and also the military regime in Japan.
--:-- Nick Mulder: And they were really intent on building their own empires on changing the borders, expanding their hold over territory and resources.
--:-- Noel King: On the one hand, Italy's Duce, in 15 years of power, has made his people believe that at home they are marching to a new prosperity, and abroad Italy is rebuilding the Roman Empire.
--:-- Nick Mulder: And initially the sanctionists tried to confront them with further threats of economic blockade.
--:-- Nick Mulder: But when you confront a regime that's already ideologically quite radical and inclined towards nationalism, you'd actually, in this case, in the 1930s, it turned out this didn't work to restrain them.
--:-- Nick Mulder: It actually fed their anxieties that they had to act more aggressively, more quickly to secure those resources for their people.
--:-- Nick Mulder: And at the time, territorial conquest was still seen as a way that you could potentially become self-sufficient.
--:-- Nick Mulder: So the real tragedy of the 1930s is that sanctions had worked in the previous decade, but precisely when they were used in the wake of the Great Depression, they ended up actually accelerating political and economic disintegration in the world.
--:-- Nick Mulder: Because a country like Germany hears, we're going to blockade you, we're going to keep food from getting in, if you continue down this path, the path that led to World War Two.
--:-- Nick Mulder: And instead of getting scared in the right way, Germany gets scared in the wrong way.
--:-- Nick Mulder: And it's like, we better go out and conquer some territory so that these blockades can't work.
--:-- Nick Mulder: We need to be bigger and stronger.
--:-- Noel King: Exactly.
--:-- Noel King: Yeah, being scared in the right way.
--:-- Noel King: I think that's a great way to put it.
--:-- Noel King: So back in the 1930s and 40s, the United States is not part of the League of Nations.
--:-- Nick Mulder: It's not part of the group that generally puts the sanction pressure on.
--:-- Nick Mulder: Was the U.S. itself using sanctions at all as a threat?
--:-- Nick Mulder: They were not part of it for a large part of this period.
--:-- Nick Mulder: They were very much kind of torn internally, the United States.
--:-- Nick Mulder: So there are people who are internationalists who think the United States should become a member of all these international organizations, that it should do much more to try and maintain world peace.
--:-- Nick Mulder: And then there's a very big group of Americans in the 20s and 30s who actually think, no, that actually gets the United States involved in these endless foreign wars.
--:-- Nick Mulder: That's the old world. We're a new country, a young country.
--:-- Nick Mulder: We don't want to have anything to do with that.
--:-- Nick Mulder: But of course, in the 30s, you do get all of these regimes, very radical regimes, nationalist regimes that begin to challenge the status quo in very dangerous ways.
--:-- Nick Mulder: And ultimately, Roosevelt, the president of FDR, he does begin to use economic sanctions because he realizes that the United States actually has quite a lot of levers that it can pull.
--:-- Nick Mulder: So this is kind of interesting because at that time, particularly in the late 30s, early 40s, for example, the United States is the world's largest oil producer.
--:-- Nick Mulder: And it has the power to stop oil supplies to all of these other countries.
--:-- Nick Mulder: And some countries are actually very dependent on American oil supplies.
--:-- Nick Mulder: So America is kind of like Saudi Arabia at that point.
--:-- Nick Mulder: It can stop tankers from going across the ocean and that potentially can bring the economies of other societies to a halt.
--:-- Nick Mulder: And in 1940 and 1941, they actually twice used this.
--:-- Nick Mulder: Once they used it against Spain, where the Spanish, that they're under this dictator, Francisco Franco, and he's kind of tempted to side with the fascists.
--:-- Nick Mulder: And at the right moment, Roosevelt actually withholds oil from Spain, and Franco realizes, uh-oh, this is going to turn out badly.
--:-- Nick Mulder: We're totally dependent on the U.S.
--:-- Nick Mulder: And he actually also does not join the war.
--:-- Nick Mulder: He remains neutral for the entire duration of World War II.
--:-- Nick Mulder: So there, again, it ends up working.
--:-- Nick Mulder: But one year later, the United States tries the same thing against Japan.
--:-- Nick Mulder: And in the summer of 1941, together with Britain and the Netherlands, they imposed this big oil embargo on the Japanese economy.
--:-- Nick Mulder: And Japan is an island, it has no oil, it's totally dependent on overseas supplies.
--:-- Nick Mulder: And the Japanese respond by this, by realizing, okay, well, we need to now conquer resources by force.
--:-- Nick Mulder: We have to take over most of Southeast Asia if we want to remain self and keep our economy running.
--:-- Nick Mulder: And this is one of the things that makes Japan attack the U at Pearl Harbor.
--:-- Noel King: December 7th, 1941, a date which will live in infamy.
--:-- Noel King: The United States of America was suddenly and deliberately attacked by naval and air forces of the Empire of Japan.
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--:-- Noel King: We're back with Nick Mulder.
--:-- Noel King: So even though sanctions helped get us into a war, the U.S. decided to keep using them.
--:-- Nick Mulder: At first, in a limited way.
--:-- Nick Mulder: In general, the United States kind of avoids using sanctions in that very big, comprehensive, provocative way that got them into World War II.
--:-- Nick Mulder: But they do keep that lesson of what went wrong with Japan somewhat in mind because they never actually for much of the Cold War imposed sanctions against a large industrial state.
--:-- Nick Mulder: In the Cold War, as the United States is fighting the Soviet Union or competing with the Soviet Union rather and competing with communist China, they don't use sanctions that are as severe.
--:-- Nick Mulder: They never cut off all oil supplies or anything like that.
--:-- Nick Mulder: And it wouldn't have really worked because the Soviet Union itself has enough of those resources.
--:-- Nick Mulder: It's a very large country, right?
--:-- Nick Mulder: It controls one-sixth of the Earth's surface.
--:-- Nick Mulder: So for most of the Cold War, so the 1950s, 60s, 70s, 80s, the United States ends up using sanctions mainly against small countries, the embargo against Cuba.
--:-- Nick Mulder: That's kind of a good example of the sort of sanctions the United States has been using in the last half century.
--:-- Noel King: So Cuba, it's very interdependent.
--:-- Nick Mulder: It used to be at least very interdependent with the United States economy.
--:-- Nick Mulder: And the embargo against Cuba is a pretty severe imposition on their economy.
--:-- Noel King: Tell me some other places where the U.S. has used sanctions since the 70s, 80s, 90s, and the types of sanctions that we're seeing.
--:-- Nick Mulder: Yeah, so the United States in the 70s gets this extra kind of shot in the arm from the fact that there's a lot of things changing in the world economy.
--:-- Nick Mulder: There's a new kind of wave of financial globalization that happens.
--:-- Nick Mulder: And at the core of it is the U.S. dollar.
--:-- Nick Mulder: So it's the control over what becomes really the global reserve currency that's very powerful.
--:-- Nick Mulder: The United States can exploit this.
--:-- Nick Mulder: And much of international trade and a lot of international banking happens through dollars.
--:-- Nick Mulder: And at some point, that means there's always some aspect of companies or banks' activity that happens in U.S. jurisdiction.
--:-- Nick Mulder: So the United States can use whatever that little leg that is in a U.S. jurisdiction is to try and exert control over the transactions as a whole.
--:-- Nick Mulder: So the use of the dollar since the 1970s is really key to the way that the United States has used sanctions.
--:-- Nick Mulder: And it first, for example, does this against Iran.
--:-- Noel King: Good evening.
--:-- Noel King: The U.S. embassy in Tehran has been invaded and occupied by Iranian students.
--:-- Noel King: The Americans inside have been taken prisoner.
--:-- Noel King: And according to a student spokesman, will be held as hostages until the...
--:-- Nick Mulder: In 1979, there's a big revolution in Iran.
--:-- Nick Mulder: And the Shah is overthrown and the Islamic Republic under Khomeini comes to power.
--:-- Nick Mulder: And immediately what the United States does is it freezes all of the assets, about $11 or $12 billion of Iranian assets held in American banks.
--:-- Nick Mulder: And that's something that you see quite a lot subsequently.
--:-- Noel King: So that oftentimes is now the way that the U.S. begins with a use of economic sanctions.
--:-- Nick Mulder: But it's not the only way.
--:-- Nick Mulder: Sometimes they can also target not just their reserves but also their exports.
--:-- Nick Mulder: So they try and prevent them from selling things abroad.
--:-- Noel King: Our position must be clear.
--:-- Noel King: I am ordering that we discontinue purchasing of any oil from Iran for delivery to this country.
--:-- Nick Mulder: They drive down the amount of export earnings that those countries can have, and that puts them in difficult economic situations because they have to make really tough choices about how to distribute the resources that they do have.
--:-- Noel King: Off the top of your head and I ask because you an expert can you list the countries that the U has put sanctions on since the 90s I mean there probably too many for me to accurately list But since the 90s I mean it's a pretty big list.
--:-- Nick Mulder: So some of the most important cases I think you would have are Iraq, Libya, North Korea, Venezuela, Belarus, Yugoslavia, Ethiopia, and Eritrea.
--:-- Nick Mulder: It's also put sanctions on Russia.
--:-- Nick Mulder: There are certain technological restrictions against China, Myanmar, Syria recently.
--:-- Noel King: So, yeah, it's a pretty long list.
--:-- Noel King: And it seems worth pointing out that all of those countries you listed, the vast majority of them, the United States has not necessarily gotten what it wanted from those countries.
--:-- Nick Mulder: So, in most cases, I think it's clear that if the goal of those sanctions was behavioral change, only a very small amount of them have worked or they've worked only a little bit but not actually fully.
--:-- Nick Mulder: And yeah, I think that at the moment what you see is that these sanctions are easy to impose they're much more difficult to lift and when a government decides that it can risk or it can you know it will take its chances to try and ride out the sanctions then it retrenches they often try and times try and foment nationalism and make people rally around the flag and then the conflict basically becomes kind of frozen.
--:-- Noel King: So there's no actual prospect that it's going to lead to better diplomatic relations or that they're going to give up on this policy that the U.S. wants them to stop pursuing.
--:-- Noel King: So in most cases now where I think many sanctions regimes have ended in a kind of impasse.
--:-- Noel King: Today I'm announcing a series of measures that will continue to increase the costs on Russia and on those responsible for what is happening in Ukraine.
--:-- Noel King: First, as authorized by the executive order I signed two weeks ago.
--:-- Noel King: We are imposing sanctions on specific individuals responsible for undermining the sovereignty, territorial integrity, and government of Ukraine.
--:-- Noel King: Can you tell me about what happened in 2014 with Crimea and Russia and then the U.S. sanctions that followed?
--:-- Nick Mulder: Yeah, so in 2014, this whole crisis that happened after the Maidan revolution in Ukraine led to Europe and the United States together imposing sanctions on Russia because Russia reacted to a new pro-Western government coming to power in Ukraine and it took over the Crimea.
--:-- Nick Mulder: It annexed the Crimea and occupied it.
--:-- Nick Mulder: And it also helped separatists in these two regions in Eastern Ukraine.
--:-- Nick Mulder: And that was a pretty big shock because there hadn't been a major kind of war or conflict like that in Europe at least since the late 90s, since the Balkan Wars.
--:-- Nick Mulder: And a lot of European countries realized that they had to try and do something to show Russia that you can't just take over territory like the Crimea and annex it, right?
--:-- Nick Mulder: That's a breach of international law, and it needs to be punished.
--:-- Nick Mulder: And you need to enforce the norm that you can't simply take territory.
--:-- Nick Mulder: Otherwise, we're back in the 1930s, so to speak.
--:-- Noel King: That's interesting.
--:-- Noel King: So the US puts specific sanctions on Russia in 2014.
--:-- Nick Mulder: And yet Russia continues doing what it wants to do.
--:-- Noel King: At least that's how it seems to me.
--:-- Nick Mulder: Have the United States sanctions on Russia actually worked in any fashion?
--:-- Nick Mulder: So that kind of brings us back to this question of what's the goal?
--:-- Nick Mulder: There are now some people who say the only goal of sanctions on Russia is simply to impose costs on Russia, to weaken their economy.
--:-- Nick Mulder: If that's your yardstick, then they have worked somewhat.
--:-- Nick Mulder: They've lowered the long-run economic growth rate of the Russian economy.
--:-- Nick Mulder: They've reduced the amount of money available for foreign investment.
--:-- Nick Mulder: Living standards of ordinary Russians also have been stagnant and even slightly falling in the last decade.
--:-- Nick Mulder: So if that's what you think the goal is, then they have worked.
--:-- Nick Mulder: If you think, and I think this is the real goal that we are all hoping for, that Putin and the Russian government will change their behavior, then they've clearly not worked.
--:-- Noel King: I'm thinking of the countries you listed, Russia, Syria, Venezuela, North Korea, all places where the U.S. has not gotten what it's wanted.
--:-- Noel King: In all of your months and years of research on this, have you thought of a more effective way than sanctions to handle conflicts like these?
--:-- Nick Mulder: I think in general, you can say that sanctions are a very blunt instrument.
--:-- Nick Mulder: And if they work, they tend to work very quickly.
--:-- Nick Mulder: And sometimes they even work as a threat, so you don't even have to impose them at all.
--:-- Nick Mulder: But if you do impose them and they don't work pretty quickly, then they end up actually worsening the conflict.
--:-- Nick Mulder: So I think that in many cases, the United States should be much more open towards diplomacy and negotiation.
--:-- Nick Mulder: I think we need to think much more pragmatically about can you actually reassure some of these countries that you're not putting them in front of an existential danger?
--:-- Nick Mulder: Are they willing to somehow moderate their behavior in return for you lifting some sanctions as a concession?
--:-- Noel King: And the one reason why I am optimistic that if we try that, we could do something with it is that that's actually the way that the sanctions against Iran have worked in the last decade.
--:-- Nick Mulder: So in Iran, the goal was to stop them from pursuing a nuclear weapon.
--:-- Nick Mulder: And in 2015, Obama and Kerry negotiated this pretty, really remarkable deal, a pretty impressive diplomatic achievement.
--:-- Nick Mulder: And they got international verification from the IAEA, the International Atomic Energy Agency, to verify if Iran was also stopping nuclear weapons development.
--:-- Nick Mulder: And in return, the Iranians got sanctions lifting.
--:-- Nick Mulder: And right now, they're negotiating a new deal right after Trump withdrew from it.
--:-- Nick Mulder: Biden is now trying to negotiate a re-entry into that deal.
--:-- Noel King: I think that should be or definitely can be a useful model for thinking about how to use sanctions and how to turn these ineffective long-run policies into something more politically beneficial.
--:-- Noel King: It's almost like if you go looking for peace, you find peace.
--:-- Noel King: If you do things aimed at peace, you will get there.
--:-- Noel King: Exactly.
--:-- Noel King: Yeah, it's all about establishing trust.
--:-- Noel King: Nicholas Mulder, author of the book The Economic Weapon, The Rise of Sanctions as a Tool of Modern War.
--:-- Noel King: Thank you so much for being with us today.
--:-- Nick Mulder: Thank you.
--:-- [Theme music starts playing]
--:-- Noel King: Today's show was produced by Amina El-Sadi, edited by Matthew Collette and Sean Rameswaram, engineered by Efim Shapiro, and fact-checked by Laura Bullard.
--:-- [Theme music continues to play]