The other day, my CUNY and stone center colleague Branko Milanović He suggested that it would be interesting “to compare Napoleon’s continental blockade against Great Britain with the current sanctions against Russia.” It so happened that he was already on the subject. He had just read Andrew Roberts’Napoleon: a life” and I was thinking about the parallels.
The parallels are not, in fact, very good. But exposing the differences is in itself, I think, a useful exercise, and there are other historical examples of wartime trade embargoes that are closer to what is happening now.
So, for those unfamiliar with history, a potted summary: in the early 19th century, Britain and France were stuck in a peculiar stalemate: the British were unbeatable at sea, France nearly unbeatable on land. Napoleon tried to break this stalemate with economic warfare, closing the ports of Europe to British trade. But his blockade was leaking, and his attempts to plug the leaks led to disastrous military adventures: first a bloody quagmire in Spain, then a catastrophic invasion of Russia.
What does this have to do with the current situation? Little bit. Fast forward to 2022.
I think the conventional wisdom on February 24 was that Russia would win a quick military victory in Ukraine, but then face a cash crunch when the West embargoed its exports. This has not come to pass.
On the military side, Russia’s attempt to quickly seize the main cities of Ukraine ended with huge losses and a humiliating withdrawal. Russia then moved on to an artillery-driven battle of attrition in the Donbas, but gained only a few square miles of ground, again at the cost of heavy losses. That attack stalled around mid-June, and more recently Western weapons appear to have tipped the balance of power in favor of Ukraine, though the front lines remain static, at least for now.
On the other hand, Western attempts to restrict Russian exports have failed. Russian oil is still finding its way to world markets and, if anything, the country appear be full of cash.
But while Russia has no problem selling things, it has a lot of problems buying things. As I said, Russia’s export sanctions have been a fiasco, but sanctions on your imports — the refusal to sell essential products to Russia — have been more successful than, as far as I know, anyone expected. Even nations that are not part of the coalition imposing sanctions, including China, have drastically reduced their exports to Russia:
None of this would have made sense in the Napoleonic era, because then international trade was much easier. The sanctions appear to be restricting Russian industry because much of modern trade consists not of consumer goods but of industrial inputs. That was not true in, say, 1810, with the main exception of cotton, which did not come from areas controlled by Napoleon.
Also, in 1810, there weren’t many multinational companies. Today, a company that makes goods in China, even if it is Chinese-owned, is likely to be reluctant to sell potentially strategic goods to Russia for fear that it could be sanctioned in other, more important markets, such as the United States and Europe. Union.
So the economic sanctions against Russia seem to have been surprisingly effective, but not in the way that everyone expected. That said, there is no indication that I am aware of that the economic cost of sanctions is leading to a moderation in Russian policy. Instead, what they are doing is hampering Russia’s military production, which is a real problem for Putin, given the continuing influx of Western weapons into Ukraine.
But wait, that’s not the end of the story, because there’s another de facto embargo underway. Early in the war, supporters of Ukraine pleaded with European nations, particularly Germany, to stop buying Russian natural gas; they didn’t. But now Russia is, in effect, sanctioning its own gas exports. It is not an explicitly announced policy, but Russia has been cutting deliveries to European markets, clearly in an attempt to damage the European economy and increase political pressure for Europe to stop supporting Ukraine.
I find this graph, showing the price of natural gas in the Netherlands, the European benchmark, fascinating:
Gasoline prices spiked in February with the Russian invasion, but quickly fell back to roughly pre-invasion levels. They did not begin a sustained increase until mid-June. I do not think it is a coincidence that this upward break corresponds to the point at which even the Russians realized that their Donbas offensive was not going to produce a decisive breakthrough.
Everything indicates that it was then that Russia began to limit gas deliveries. Indeed, Russia, not the West, is now the player trying to use economic warfare as a proxy for its inability to prevail on the battlefield.
The closest historical parallel I can find is the embargo on cotton exports imposed by the Confederacy at the beginning of the Civil War, in an attempt to force Great Britain to intervene on the side of the South. This embargo didn’t last long, but when it was lifted, it was moot: the Union navy was blockading southern ports anyway. Needless to say, the embargo did not work.
Will Russia’s ploy work better? I wish I could be more certain than I am about European resolve, especially given high inflation and high risk of recession (which is higher there than in the US). On the other hand, the nations that seem most likely to falter, especially Germany and Italy, have been lagging behind in their deliveries of arms in any case; Russia’s stealth gas embargo is unlikely to deter crucial shipments from the United States, Britain and Poland, among others.
The truth is, it’s hard to find historical examples of successful economic warfare unless you count blockades that were themselves a form of military action, like the US submarine campaign that devastated Japan’s economy during World War II. World. In the end, the war in Ukraine will probably be decided on the battlefield.
quick hits
There are not many changes in the map, but what about happening under?
In technologically retrograde import substitution.
Why are wheat prices declining?
When Ted Cruz thought Russia was strong because I wasn’t awake.