Wednesday, August 29, 2007

The Limits (and Power) of US Economic Warfare

This post is motivated by a thoughtful comment entered on a previous post by Watcher in the Center. Watcher's comment is linked to Geek Demands a New Historical Analogy.

Economic sanctions up to and including total trade embargoes have a long standing historical appeal to US policy makers and We the People. While having a strong appeal, the success record of economic sanctions is not so sterling.

The closest to a complete success in pursuit of a major policy goal ever achieved by a trade embargo was the repeal of the highly obnoxious Stamp Act by the British Parliament in the 1760s. Since then the win/loss ratio has not been impressive.

In the years before the War of 1812, the US government tried to influence both British and French policy. The goal was limited. The US wanted its "rights" as a neutral to be respected by both belligerents. Not only did the embargo acts fail in their purpose, they served to nearly impoverish New England with its heavy dependence upon overseas commerce. (Oh, the embargo act and its successor, Macon's Bill Number Two, almost got the US embroiled in a war with both Great Britain and Napoleon's France.)

Jumping forward a century and a quarter, the administration of Franklin Roosevelt employed a campaign of escalating sanctions against Imperial Japan. The sanction program was gradual, well considered, and ultimately--when the US froze Japanese funds thus preventing the sale of petroleum, aviation gasoline, and scrap steel--left Tokyo with two choices: A humiliating capitulation to US policy requirements regarding China or war.

We know which they chose.

Not quite forty years later, US trade sanctions did not induce the Soviets to leave Afghanistan. Nor, a few years later did a virtual embargo on Panama (which used the dollar as its circulating medium) induce the country to disgorge Manuel Noriega. We had to send the US military as the world's largest SWAT team to arrest the man. (Sometimes regime change is harder than initially expected.)

With all that as background, let's push on to get a grip on Cuba and Iran once again.

During the years 1959-1961, the US diplomatic and economic embargo on Cuba had a disastrous effect upon the country's economy, which had been very heavily dependent upon selling its sugar and tobacco crops to the US. Cuba had also received significant national income from US tourism.

All of that came to a screeching stop with the embargo.

After Fidel declared Cuba to be a "socialist" nation, he was able to arrange increasing assistance from the Soviet Union and the Warsaw Pact regimes. Even with the flow of money from Moscow and its satellites, the Cuban economy remained enfeebled.

The enfeeblement worsened as a result of badly bungled efforts by the Fidelistas to create a model economy. The ineptitude of some Cuban economic development schemes was sufficiently impressive to make the Geek wonder whether or not there had ever been any real need for the US economic sanctions in the first place.

Subsequent to the collapse of the Soviet Union and the Warsaw Pact, Cuba has been forced to compete on the international commodities export market. For some time, Havana benefited from a special relationship between itself and an ideological soulmate, Hanoi. But, that tie has weakened in recent years. The Fidelistas have opened tourism facilities to appeal to the Northern European market with some success. Balancing this is the Cuban government's uncanny ability to annoy trading partners at critical moments (with the exception, of course, of the Neo-Castroite regime in Venezuela.)

Still, the bottom line reads that Cuba soldiers on despite or because of the original and continuing US economic sanctions....

"Wait one, Geek." you shout. "What do you mean, 'because of'?"

That's the critical point. Every time the Castroistas had to announce another painful tug inwards on the collective Cuban belt, the blame could be foisted off on the Norteamericanos. The distress felt by a person and the anger that distress produced would be directed, not at Havana, but at Washington.

Take a good grip on a reality the Geek has mentioned many times before. Pressure consolidates long before it fractures.

Whether the pressure is economic, political, psychological, or military, pressure from an outside regime on the government and people of a nation will consolidate political will and support of the government. Eventually the pressure may cause political fractures. However, that eventually can be a bloody long time in coming.

The economic and diplomatic sanctions imposed on Cuba by the US gave the inept Fidelistas a perfect out every time one or another of their pet economic schemes came a cropper. Point a finger (the Geek won't say which one) to the north. Scream loudly, "Parado, Uncle Sam!"

Beautiful, isn't it?

The same mechanism can be seen during the long decade of economic sanctions directed at Saddam Hussein's Iraq following the success of Operation Play in the Sandbox in 1991. The Iraqi people (but not the Iraqi government or military) were hurt, even desperately hurt by the sanctions. The middle class was financially wiped out. The well connected, the grifters, and the grafters made out like bandits.

All the while, the boys at the top in Baghdad could point, not at themselves, but at the faraway evil gnomes of Washington. Don't look at us! Look at Uncle Sam.

Beautiful, isn't it?

Now for Iran. Time to test the analogy again. Look for guide posts from previous experiences such as Cuba.

The mullahocracy has shown itself to be almost as pathetic in economic matters as the Castroistas. However, Iran started at a higher level than Cuba, and oil is more remunerative to a country than sugar cane. Additionally, Iran is not an island. That brings some automatic advantages. (Hint: mesh petroleum and natural gas with long, wide steel tubes.)

Iran also has some disadvantages compared to Cuba. It's population is larger and younger--much, much younger--than that of Cuba. The mullahs have not been as successful as the Castroites in transmitting revolutionary ideological zeal to the second (or third) generation. Today's technology assures that a significant percentage of Iran's youthful population will have its residual sense of revolutionary purpose challenged by a sense of rising expectations constantly thwarted by the old men with beards and a copy of the Quran.

Early signs of fault lines, generational and otherwise, have been appearing in Iran over recent years. Drawing on the general precept proven so often by history that outsider applied pressure consolidates long before it fractures, the most important guide post is this. Any economic sanctions must not, repeat, not, be seen as coming directly or indirectly from the United States.

Considering Iran's current economic condition, the dependence upon both neighboring countries and private enterprises located at great distance for so much of Iran's ambitions and giving appropriate weight to the signs of nascent disaffiliation within the Iranian population, economic sanctions have a fair chance of bringing about a positive outcome. That is, economic pressures might, just might, have a quieting effect upon the mullahs if one overriding caveat is followed.

The caveat?

The US follow a very difficult policy. The US must work quickly to normalize diplomatic relations with Tehran. Washington must not go public on sanctions of either a diplomatic or economic nature. Simultaneously, the weight of the US must come to bear on critical nodes of Iranian technological, economic, and diplomatic support, whether private companies or governments.

There are several important ramifications of this course of action. For it to work, the US must stop acting like it is what it is--the world's only Great Power. We must take Russia seriously as another Great Power. We must do the same with the Peoples' Republic of China. Diplomatic and public relations fences with Turkey, Syria and Pakistan must be mended with rapidity.

The Geek acknowledges the historical truth of the proposition that kicking one diplomatic rock may start an avalanche of change. To have any prospect of controlling the direction and velocity of the changes, the current--or, far more likely, the next--administration must develop a firm view of the world we would prefer to live in and a consistent road map on how to get there from here.

Even then the results will not be certain.

You can legitimately ask, "To what avail would all this be? Particularly since there is no guarantee of success."

The optimal case would be the increase of political disaffiliation within Iran. In that case the mullahs and their rock of support, the Iranian Revolutionary Guard Corps, would become increasingly preoccupied with the requirements for domestic pacification. Energy, money and personnel which go into the task of quieting or assuaging political unrest are not available to expend on foreign adventures or technological quests. The Geek is neither calling for nor expecting a revolution in Iran. He would like to see an inward turn by the regime and their knock off of the SS.

Worst realistic case? Al-Quds Force ramps up its foreign actions. The mullahs are able to rally support from the mass of young men without a good, secure future. The rhetoric and behavior of the Tehran regime becomes increasingly frenzied and dangerous. Iran gets the bomb.

There is time enough for war, when and if the worst case comes to pass. Until then, let us try to do a better job than we have done with either Cuba or Iraq. The result will not be certain nor predictable with precision...

But--get a real tight grip on this--war is always uncertain and certainly unpredictable in its results.

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