My latest summary for Chokepoints: American Power in the Age of Economic Warfare explains how the US started using its financial and technological power to achieve foreign policy goals. While it doesn’t discuss use of physical chokepoints like the current Strait of Hormuz blockade, Fishman gives us rich insight into how economic warfare decisions (including those that led to the 2015 Iran nuclear deal) were made.

As usual, the key takeaways are below, and you can find the full summary by clicking the link above.

KEY TAKEAWAYS

• Economic war has become a meaningful alternative to military war:
  • After very costly wars in Iraq and Afghanistan, the US grew reluctant to use military power to achieve their foreign policy ends.
  • Around the same time, globalisation has increased the US’s control over financial and technological chokepoints.
• Sanctions serve two different purposes, and the purpose can shift over time:
  • Deterrence. Sanctions threats need to be credible if your aim is to change an adversary’s behaviour. You also need to design off-ramps to lift the sanctions if the desired change occurs.
  • Weakening an adversary. Here, the damage done by the sanctions is the whole point.
• There are many factors to consider when deciding how to use sanctions:
  • Asymmetrical costs. Sanctions come with economic costs, especially if they affect oil prices (Iran, Russia) or the global economy (China). The key is to look for areas where sanctions cause much more harm to your adversary than to yourself.
  • Unilateral vs coordinated. Unilateral sanctions risk alienating allies and can be difficult to enforce, while coordinated sanctions take longer to get agreement on, and can get watered-down in negotiations.
  • Enforcement. Sanctions only work if businesses comply. But sometimes businesses “overcomply”, which can undermine the effectiveness of sanctions.
  • Who benefits from freezing the status quo. One reason why sanctions successfully deterred Iran but failed to deter Russia may be because freezing the status quo hurt Iran, but benefited Russia.
  • Overuse or underuse. Reckless or excessive use of sanctions can reduce their power over time, as countries find ways to protect themselves. But too much caution can be just as big a risk.
• Going forward, Fishman expects economic weapons will continue to be used.
  • The US should take a more proactive approach, such as setting up a permanent economic war council and coordinating with allies regularly.
  • Sanctions could be more effective if the public better understands why they are needed and public acceptance grows.
  • As countries act to protect themselves against future sanctions, the world may increasingly fragment into rival economic blocs.

You can find the full detailed summary on the website. If you found this summary useful, consider forwarding to a friend you think might enjoy it.

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​To Summarise​