Sanctions and perceptions

A Neokohn főmunkatársa, Izraelben élő biztonságpolitikai szakértő.

On February 24, another war broke out in parallel with the war in Ukraine. This other war is being fought with as much fervor, faith and devotion as its kinetic counterpart on the battlefield. Commentary by Robert C. Castel.

Who is fighting this war? Those who are convinced that it’s only a matter of time before Western sanctions put the Russian colossus on its back.

Who are their opponents? Those who are convinced that it’s only a matter of time before Russian counter-sanctions put the Western colossus on its back. Naturally, this war is not fought with firearms, but with figures, statistics and graphs.

There has hardly been a day in the last almost half a year that a new-age analysis has not been put forward in order to discover the economic Achilles’ heel of the adversary, which will soon lead to a complete social and economic collapse. These predictions are in fact the intellectual equivalent of the Chinese fortune cookie. In each of them 

lurks the hope of finally finding the miracle formula that will end the war, make peace possible and banish the atavistic demons of killing with the rationalism of numbers.

I say all of this not to be ironic at the expense of serious researchers. If only because on this highly specialized economic-financial turf, I could not even tie the laces of their spiked shoes. I firmly believe that the mass of data they produced over these months of war is methodologically sound, based on rigorous research, and indisputably realistic.

But mostly irrelevant.

Why is it irrelevant? Because

in warfare, both kinetic and economic, the perception of reality is much more important than objective reality.

The United States did not withdraw from Afghanistan because the Taliban shot up their last Hummer. The Soviet Union did not withdraw from the same country three decades earlier because the mujahideen shot down the last Mi-24 helicopter.

It was the perception of defeat, not a rational calculus, that led the two superpowers to withdraw,

that beyond this particular milestone, the business of war had become unprofitable and the wisest course of action was to withdraw from this market.

The same is true of the economic war between the West and Russia.

The question should not be how to cause the greatest objective economic damage to the adversary, but how to create a sense of the greatest economic damage.

As I am not an economist, I have no idea which side is causing the greater economic loss to the other. But I am absolutely certain that

at the moment the Russians are much more effective than we are at creating a perception of loss.

What is it that we threaten Russia with? That the „big names” of the West will withdraw from the Russian market and that the Russian golden youth will be forced into a future without McDonald’s and Netflix, squeezed into terrible-looking Soviet jeans? By being forced to install washing machine chips in their drones while the world laughs? That Russia’s total national product will shrink by 8.17 percent in some quarter this year?

In contrast, what are the Russians threatening us with? 

„You will freeze in winter.” That’s it. What part of „you’ll freeze” do you not understand?

I suppose it is unnecessary to ask the provocative question: What form of economic warfare seems to be more effective?!

The problem is compounded by the objective difference between the propaganda machines of the warring parties.

The vast majority of Russian media are controlled by the Russian state. We were wrong to think, to claim at the beginning of the war, that Russia had made a fatal mistake in ceding the information battlefield to the Ukrainians. It did not. It is simply that,

as opposed to the offensive information warfare of the Ukrainians, the Russians concentrated on defensive information warfare, on building and defending the domestic narrative.

It is this information shield that makes it quite difficult for the West today to create a truly painful perception of loss among the Russian population.

In contrast,

Western media have become the propaganda machine of Russian economic warfare.

The saddest thing is that this is not a case of some kind of negligence or omission. This is not a fault, but a systemic feature. The business model of the Western media is based on sensationalism, hype, extremism.

The same media that has made a killing from a series of real or fake crises, such as the climate crisis, systemic racism or COVID, is now riding, in the same way, the coattails of the „gas freeze,” the „Russian winter,” the „economic apocalypse,” and the „political tsunami” that is sweeping governments.

To add insult to injury, Western media is acting as an echo chamber, increasing day by day the perception of the effectiveness of Russian counter-sanctions, creating a series of self-fulfilling prophecies. The domino-like fall of European governments and political personalities in recent weeks is only the beginning of this process.

The tragedy of the matter is that it is not impossible that the West is prevailing on the plane of objective reality. It is not impossible that Russia is cracking in every nook and cranny under the weight of Western sanctions. It is not impossible that the restrictions are slowly but surely strangling the Russian economy.

All this is possible.

But it is more than likely that

the sense of an inescapable energy and economic crisis, and the perception of social and political upheaval that it will bring, could put the West on its back before the first pair of Soviet jeans in an intolerable color and style ever appears in Moscow.

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