Sanctions Have a Spotty Record. Can They Stop Russia?

One of the very first recorded examples of a government imposing economic sanctions against another occurred as far back ago as the fifth century BC.

In brief, Athens blocked the city-state of Megara from gaining access to ports and harbors throughout its empire for a number of reasons, including Megarians’ desecration of land sacred to Demeter, the goddess of agriculture.

The blockades succeeded at cutting Megara off from nearly all trade, and its economy tanked as a result.

The sanctions worked so well, though, that they may have backfired on Athens. Many scholars and historians today believe that the Megarian Decree, as the sanctions are called, is at least partially to blame for the Peloponnesian War, a decades-long conflict between democratic Athens and oligarchic Sparta, Megara’s ally.

An important consequence of this war, I should add, is that it marked the end of Athens’ golden age. Upon its defeat, the once-great polis fell under the tyrannical control of Sparta. It never regained its former glory.

Fast forward 2,400 years, and Russia now finds itself the target of some of the toughest and most sweeping economic sanctions ever levied upon a country. Russian banks have been unplugged from SWIFT. The central bank’s foreign assets have been frozen. Yachts have been seized. Mastercard and Visa have blocked all transactions, and crypto exchanges are feeling the pressure to do the same.

Scores of private companies have suspended all operations within Russia. That includes nearly every major international automobile and aircraft manufacturer, from Volkswagen to Toyota to Ford and Boeing. Retailers and consumer tech companies have closed thousands of stores and halted shipments of goods, including Apple, Google, Samsung, Nike, Nestle and more.

I don’t believe the world has ever witnessed such a highly synchronized effort to ostracize a nation and isolate it from global markets. The steps have so far been deep and profound.

And yet will they be enough to stop President Putin? Put another way, how much economic pain is the world willing to bear as a result of the sanctions, when it’s likely uber-wealthy Putin will bear none of it?