War is no friend to Libertarianism and its principles of individual liberty and minimalist government. Yet even foreign policy actions short of war often lead to similar outcomes to government intervention in domestic politics. The Ukraine crisis is a case in point.
For all the talk, at least during the opening months of Russian aggression towards Ukraine, that Putin was out-playing the West and making big ‘gains’ as in a game of chess , international relations should not be viewed as a ‘chess game’.
The pawns are in real life there to be served by their King, not die for it. The object of politics, unless engaged in an unavoidable Total War, is to enhance the number and prosperity of the pieces, not lose less simply than the other side.
Putin’s moves have not furthered his countrymen’s interests, or prosperity. Those of Ukraine have clearly suffered. And those of the West as well. Not only is everyone poorer in absolute terms, but indeed the Russians seem to have been made weaker in relative terms too.
Russia’s economy has been hit hard, not so much by the sanctions on certain individuals themselves but more the uncertainty they create. This is seen in the huge capital flight from the country; $75 billion has fled the country so far this year alone. The stock market has fallen by nearly 10 percent. Economic growth has seen more than a percentage of growth shaved off.
Certain important Russian companies have been targeted by America for special punishment. Energy companies, like Rosneft, will not be able to raise medium- or long-term financing from American companies. This is especially bad because the external financing needs of Russian companies are over $100 billion this year alone. This could see Russian companies go bankrupt or else seek support from the Government. Either way, business investment will collapse, which Russia sorely needs.
As was seen earlier this month by the massive fines on BNP Paribas by the US Treasury for ignoring US sanctions on certain countries, banks and businesses who simply do business in America (which is more than a few) will be wary of going against its wishes.
And businesses not included in the sanctions likely will also suffer, a result of the political uncertainty of future sanctions.
Admittedly, some gains were made. Russia’s Black Sea Fleet has been secured, which seemed in jeopardy if Ukraine ever joined the EU and NATO. Yet this hardly seems worth it.
It may not fit nicely into a model of international relations as a game of chess, but developing Russia’s untapped energy potentials in inhospitable terrain, for which western financing and technology is essential, is more in Russia’s national interests than the Crimea.
The Ukraine has lost many lives and much territory. Tax receipts from the western part of the country have collapsed. It’s economy is in severe recession, and has a large budget deficit, whilst having to finance a large anti-terrorist operation. It needs large international loans, and painful restructuring will be coming its way soon.
And the West loses too. Sanctions and lost business opportunities have hurt both Russia and the West. Any significant fraying in relations could mean economic damage, and even the risk of war.
At heart the crisis is similar to all Progressive and Socialist policies. Everybody loses, at least eventually. All that has transpired is a simple redistribution, as we might find in domestic policies like Obamacare.
And similarly it is wholly inefficient. Just like Obamacare creates no new doctors, hospitals, or medical technology, but focuses on redistribution, in Putin’s seizure of the Ukraine no new territory, industry, or technology has been created. The cost of changing the flags atop Soviet-era governmental buildings has been steep.
Everyone has been made poorer. And the sanctions, mobilization, taxes, insecurity, and uncertainty expands only the power of the state, squashes individual liberty, and makes us all worse off.