Do Economic Sanctions Work? A Brief History

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In 2014 Vladimir Putin’s Russia invaded Crimea, a peninsula of southern Ukraine that juts into the Black Sea. The West grumbled and imposed economic sanctions, expelled Russia from the Group of Seven (G7) political and economic forum, but chose not to go to war against Russia. Although the sanctions hurt the Russian economy, and no doubt impaired the lives of the 144 million who call the country home, the fact is that Putin got away with the illegal land grab, the first such territorial violation since World War II.

Correctly calculating that the West was unwilling to go to war over Crimea, Putin took the first brutal step in what now appears to be his plan to carve up Ukraine piece by piece and reclaim a key province of the old Russian empire. He reckoned that the sanctions wouldn’t prevent Russia from selling what it has and getting what it wants through back channels and loopholes, and he was right.

Sanctions and embargoes don’t work. And their fatal weakness is that they hurt average people rather than the governments and leaders that are their targets.

It might be useful to look at some previous sanctions and embargoes to assess their efficacy.

The Napoleonic Era and America’s Idealist President

In 1806 in a war unleashed by the French Revolution, when Napoleon attempted to impose a strangling shipping blockade on Great Britain, Britain responded with Orders in Council that likewise attempted to keep vital supplies from reaching French ports. The massive blockades did damage to both economies and hurt average people of Britain and France, but for all of their geopolitical drama they were largely ineffective. Napoleon’s Continental System succeeded only in souring relations between France and Alexander I of Russia, which led to Napoleon’s disastrous invasion of Russia in 1812.

The Napoleonic Wars (1803-1815) eventually descended into a struggle for national survival. As the battles raged on without resolution and each country attempted to starve its adversary into submission, the United States, just born and still finding its legs, got caught between what Jefferson called the sharks of the ocean (Britain) and the lions on the land (France). America’s thriving shipping industry was preyed upon by both European belligerents. Cargoes and ships were seized, crews were threatened, detained, and roughed up, and the English frequently impressed (i.e., kidnapped) American sailors for service in the British navy. Both France and England engaged in coercive (and sometimes violent) maritime activities that amounted to acts of war against the United States. Both European nations looked upon American protests with haughty indifference.

To President Jefferson, who declared that “peace is my passion,” commercial retaliation seemed like a useful alternative to war. Jefferson was an Enlightenment idealist. He honestly felt that it was too late in the world’s history to settle international disputes with bloodshed. He and his Secretary of State James Madison reckoned that European nations needed the natural resources and agricultural products of the United States more than we needed their finished goods. Accordingly, Jefferson persuaded a friendly Congress to pass a series of Embargo Acts, beginning in 1807. They were extremely severe: nothing was permitted to enter American ports, and nothing was allowed out, period. Fortress America would weather the Napoleonic storm without going to war. The U.S. would encourage domestic industries to insure our economic independence from Europe and we’d learn to dress in homespun as a sign of national solidarity.

The Embargo Acts were universally unpopular in America, particularly in New England, especially when enforcement (sometimes by the U.S. Army and Navy) seemed to violate the principles of a republic, including both the Fourth and Fifth Amendments. Smuggling was widespread. Representatives of several northern states met to contemplate secession.

To enforce the Embargo Acts, Jefferson, the third President, wound up accumulating more executive power than any U.S. president up until Abraham Lincoln, the 16th. Most historians conclude that the embargo ended up hurting the United States more than either of the European belligerents. Jefferson and Madison believed that Europe needed American commodities — fish, wheat, rice, cotton, tobacco, and timber — and withholding them would bring England and France to their senses — or their knees. The sanctions were so unpopular that Jefferson signed their repeal just three days before he left the presidency in 1809. Although the American people continued to feel considerable goodwill towards Jefferson personally, his standing as a principled republican took a hit during the embargo experiment and he left public life forever, exhausted and in some disarray, in March 1809.

Jefferson, one of the most optimistic leaders in American history, was seldom disappointed by the American people. This was one such time. He realized to his chagrin that “the people” might actually have preferred to go to war against France or Britain or both rather than suffer economically through a total embargo. In other words, for many, the self-inflicted wound of the embargo smarted more than a spirited fight against America’s enemies. Still, Jefferson had analyzed the situation with his usual rational brilliance. His options, he said, were three: war, embargo, or surrender to the oppressions of European belligerents. He chose embargo as the sole rational option, wrongly assuming that the American people would understand the wisdom of his policy and realize that the fledgling U.S. was not yet prepared for war.

Jefferson’s successor James Madison was similarly flummoxed by the Napoleonic Wars, which included increased British impressment of American sailors to serve in the Royal Navy. By 1812 the situation had become so intolerable that the pacific Madison took the United States into a second war of national independence against Britain. The war ended in an unsatisfying stalemate, but the United States survived and the U.S. and Britain never again shed each other’s blood.

The 20th Century and Beyond

Modern use of embargoes, sanctions and blockades dates to World War I and the creation of the League of Nations, but they have never been fully effective, because the world’s economy has steadily become complex and interconnected. No nation has ever been completely shut off from the commodities and supplies it needs to survive and continue hostilities. Sanctions and embargoes can make the life of a target nation more difficult, sometimes much more difficult, but complete success has proven maddeningly elusive. The wars grind on and the people suffer.

Cuba

The United States embargo of Cuba, begun more than 60 years ago on March 14, 1958, during the Eisenhower administration, continues to severely impoverish the lives of the 11 million people of Cuba, and though the embargo finally outlasted the life of Fidel Castro, it has never brought about the regime change or policy realignment intended by the U.S. In fact, the embargo drove Castro into the hands of the Soviet Union and brought on the Cuban Missile Crisis of October 1962, the world’s closest flirtation with nuclear annihilation. The Cold War ended in 1989, more than 30 years ago, but Cuba continues to suffer from the intense economic hostility of its giant neighbor to the north. As usual, the people who suffer are the mass of Cubans who have no interest in geopolitics, not the elites who run the country. Average Cubans merely want to feed and clothe their families.

South Africa

The only notable sanctions success story of the 20th century was the end of apartheid in South Africa. On Nov. 20, 1987, the UN General Assembly adopted a voluntary international oil embargo that was joined by 130 member nations for the purpose of persuading South Africa’s white minority to empower the overwhelming black majority and relinquish its state-sponsored racist policies. In the short term, South Africa resisted the embargo by undertaking an ambitious synthetic fuels program, but by 1994 it yielded to world opinion and Nelson Mandela became its first black president after spending 27 years in South Africa’s prisons. Whether the UN sanctions or worldwide moral ostracism proved to be the more persuasive factor is unclear, but it is worth noting that in 1993, after the Cold War ended, South Africa spontaneously dismantled its six nuclear weapons, thus setting a beautiful example for the world.

Advantage Aggressor

Vladimir Putin has one extremely important advantage in the current crisis. Russia has oil and natural gas that European nations don't want but need. Russia provides about a third of the gas that western Europe burns. European states are naturally reluctant to cut off those vital energy supplies, lest their own people suffer more than Russia without any guarantee that a comprehensive oil and gas embargo would cause Putin to change course.

When the Soviet Union backed down in the Cuban Missile Crisis of October 1962, Secretary of State Dean Rusk said, “We’re eyeball to eyeball, and I think the other fellow just blinked.” The other fellow was Nikita Khrushchev, who pulled nuclear missiles out of Cuba rather than cross the threshold into a catastrophic nuclear exchange with the United States. In the geopolitical game of economic chess now being played out on the other side of the Atlantic, the question is who is most likely to blink first, Putin’s Russia or the carbon-hungry West?

You can be sure both sides are conducting emergency strategy sessions about how to survive an oil and gas boycott, no matter who precipitates it. The West is trying to figure out how to find other energy sources. Russia is trying to find alternative energy buyers. Theoretically it would be possible for Europe to obtain energy from other sources, but it would be incredibly expensive, there would be serious if temporary disruptions and economic suffering and the workaround would depend upon a heroic effort by the United States to drill more oil and gas, and find ways to get it to European portals.

Putin is pretty sure the West has no stomach for that much chaos and economic hardship, and he is confident that he can find other buyers of Russian oil and gas, principally the People’s Republic of China.

What Have We Learned?

So what do we learn from the history of economic embargoes or sanctions? First, they seldom work. Second, although they are undertaken in response to the action of the government of a foreign nation, their economic impact winds up damaging the people of the enemy nation more than its government. In almost all cases, the people at the top of a nation’s social structure are untouched. They continue to live their lives with the same privileges they have customarily enjoyed, while the mass of the population suffers. In no cases are the people sufficiently impacted that they successfully pressure their government to change its policies, or rise up in revolution. That’s nothing more than a lovely illusion. Third, there are always enough non-compliant nations to get vital supplies into the embargoed country or to purchase that country’s prohibited exports. Only if an embargo were 100 percent successful could a rogue nation be starved into submission, a goal that seems inherently problematic. Fourth, embargoes usually hurt the people of the country imposing the sanctions as much or more than the target nation. Fifth, smuggling and workarounds soon begin to undermine the solidarity of the embargo’s sponsors and the rogue nation is able to carry on indefinitely by restructuring its economy, tightening its belt, and blaming the perpetrators of the embargo for all of its troubles.

So why do the United States and other nations continue to impose sanctions on North Korea, Cuba, Iran, and now Russia? The main reason is that they are very reluctant to go to war. As Jefferson understood, there are, therefore, no other options. Hope springs eternal that tight sanctions might do the job.

After its interminable wars in the Middle East and Afghanistan, the people of the United States are war-weary. Everyone understands that a war with Russia would be likely to be fundamentally different from a war against Iraq or Grenada.

As I finish this essay, European nations are already beginning quietly to backpedal on their sanctions promises. It seems clear that even enforceable sanctions would only hurt the people of Russia, without persuading Putin and the Russian leadership to change course, and if history is any indication, we can expect an epidemic of blockade running, especially after the world’s initial displeasure abates. Putin is counting on the short attention span of the West, particularly in the United States. All he needs to succeed in his war of aggression is to outlast the outrage of the rest of the world.

What he did not anticipate was the heroic resistance and pluck of President Zelenskyy and the Ukrainian people.

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You can also hear more of Clay Jenkinson’s views on American history and the humanities on his long-running nationally syndicated public radio program and podcast, The Thomas Jefferson Hour. He is also a frequent contributor to the Governing podcast, The Future in Context. Clay’s most recent book, The Language of Cottonwoods: Essays on the Future of North Dakota, is available through Amazon, Barnes and Noble and your local independent book seller. Clay welcomes your comments and critiques of his essays and interviews. You can reach him directly by writing cjenkinson@governing.com or tweeting @ClayJenkinson.