Russia: How should we fight back?

Russia’s attack on Ukraine has rightly outraged most of us. Leaving aside the history that brought us to this present conflict, Russia’s attack is totally unjustified. Our natural instincts are to help Ukraine resist its aggressor. As we watch the destruction of lives and property, it is natural to want to send in our boys or planes to help. Surely, we can stop this by using the might of our military and advanced weapons. Wars tend to look like that in the beginning. Vietnam, Afghanistan, Iraq (I still can’t sort out what Bush/Cheney thought was America’s interest in attacking Iraq) looked like slam dunks going in. The realities were invariably very different by the end. How should we help Ukraine?

The U.S. and Ukraine’s NATO neighbors have been supplying Ukraine with weapons but left them to fight on their own. This was my assessment a month ago: “Ukraine-Russia-NATO”  As much as it strains against our impulse to help, President Biden is absolutely correct in ruling out our joining the war. For most of us, war, and the incredible pain it inflicts on those directly involved, is fought elsewhere by others. It is far too easy to say “sure, lets go to war.” “Ukraine-how should we help?”

But wars can be fought economically as well as militarily. Much of the West (the designation seems relevant again) has joined together to impose severe economic sanctions on Russia. But the objectives of these sanctions are not clear. They are too late to deter Russia from its invasion of Ukraine, though perhaps they provide an example of the potential cost to China if it decides to invade Taiwan. Are they meant to pressure Russia to come to the negotiating table? But it takes two to tango–Zelensky must be there as well. I have heard no statement of what Russia must do for the sanctions to be lifted.

The sanctions seem designed to cripple the Russian economy. Sadly, the pain will fall mainly on the Russia people rather than its government. Considerable pain will also fall on those imposing the sanctions. “The war in Ukraine and globalization”

Supply chains and financial channels will be disrupted for many years. But like military wars, the collateral damage an economic war is hard to predict. China and Russia and maybe India and much of Africa are being driven together to establish new trading relationships and non-dollar payment channels that don’t seem to serve American interests. If they are not explicitly linked to accelerating a negotiated peace, what are the sanctions for?  I don’t necessarily believe that our military industrial complex deliberately promotes the perpetuation of war, but as an economist I can’t ignore the fact that they have an economic incentive to do so.  

Missing from all of this seems to be the skillful deployment of diplomacy. The first priority, of course, is to end the fighting in Ukraine. But any peace agreement must look beyond the immediate war to the conditions that will promote peace and prosperity for Ukraine, Russia, Europe, and the world well into the future. As is often the case Chas Freeman says it best: https://www.youtube.com/watch?v=0vxufUeqnuc

Author: Warren Coats

I specialize in advising central banks on monetary policy and the development of the capacity to formulate and implement monetary policy.  I joined the International Monetary Fund in 1975 from which I retired in 2003 as Assistant Director of the Monetary and Financial Systems Department. While at the IMF I led or participated in missions to the central banks of over twenty countries (including Afghanistan, Bosnia, Croatia, Egypt, Iraq, Israel, Kazakhstan, Kenya, Kosovo, Kyrgystan, Moldova, Serbia, Turkey, West Bank and Gaza Strip, and Zimbabwe) and was seconded as a visiting economist to the Board of Governors of the Federal Reserve System (1979-80), and to the World Bank's World Development Report team in 1989.  After retirement from the IMF I was a member of the Board of the Cayman Islands Monetary Authority from 2003-10 and of the editorial board of the Cayman Financial Review from 2010-2017.  Prior to joining the IMF I was Assistant Prof of Economics at UVa from 1970-75.  I am currently a fellow of Johns Hopkins Krieger School of Arts and Sciences, Institute for Applied Economics, Global Health, and the Study of Business Enterprise.  In March 2019 Central Banking Journal awarded me for my “Outstanding Contribution for Capacity Building.”  My recent books are One Currency for Bosnia: Creating the Central Bank of Bosnia and Herzegovina; My Travels in the Former Soviet Union; My Travels to Afghanistan; My Travels to Jerusalem; and My Travels to Baghdad. I have a BA in Economics from the UC Berkeley and a PhD in Economics from the University of Chicago. My dissertation committee was chaired by Milton Friedman and included Robert J. Gordon.

2 thoughts on “Russia: How should we fight back?”

  1. Hi Warren. I’ve read your Ukraine related oped’s with much interest but not watched or read all the links. I too have been thinking about crime and punishment as relates to the the Russian invasion. I don’t expect you to have all the answers on the following but your thoughts would be of interest. Currently it appears Ukraine will be the victor. I would love for Ukraine to end up controlling all of pre 2014 Ukraine, i.e. including Crimea and all of Donbas but suspect the former and disputed portions of the latter will end up under Russian control as part of a negotiated peace. As far as punishment of Russia, some historical questions. I once heard that a mistake of WWI was too harshly punishing Germany afterward, as this supposedly contributed to their starting WWII. I’m also forgetting how Germany was punished after WWII, aside from reparations made to some families. The Marshall Plan rebuilt Europe. Certainly the country was not impoverished to the level it was after WWI, and arguably the punishment was appropriate from a western viewpoint since today it is a thriving democracy. One could say the splitting of the nation into the Communist east and Democratic west was a form of punishment (lasting 40 years), ditto with the splitting of the capital, but I’m not sure that was an intended form of punishment. Finally, how should war criminal heads of state, Putin in this case, and their enablers be punished, aside from going to jail if caught, but will seizing of their assets make a significant difference on their destruction of thousands of innocent lives and all the physical damage throughout Ukraine. Those relative few of course should get the most punishment. Are there lessons from history? I’d like to say that the vast majority of Russian lives should not be destroyed because of the relative few’s mistakes, but someone needs to pay, in a reasonable fair way over an appropriate time period.

    1. Thanks for your comments and questions Bob. I don’t think that punishing the Russian people for the horrible acts of Putin serves any American interest. Our sanctions and related measures should have the limited purpose of stopping the fighting getting Russian and Ukraine to the peace talks table as quickly as possible. Your expected outcome seems about right. As Keynes wrote re the Treaty of Versailles, it was inappropriate and probably led to WWII. I leave the war crimes issue to others.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: