Peace, war, and free trade

It’s tough to be doctrinaire about trade policies in the real world.

I’m a champion of free trade, which allows consumers and producers alike to enjoy the greatest choice and flexibility to satisfy their trading objectives. Still, free trade doesn’t necessarily work for everyone in the short run. In dynamic markets, actors come and go and changing relationships foster a lack of permanence. More concretely, once-thought to be good-paying jobs or careers may fall by the wayside as prevailing trading arrangements are disrupted and replaced. We’ve certainly seen these effects over the last several decades as substantial numbers of US manufacturing jobs have been outsourced to foreign competitors.

This seeming downside notwithstanding, I don’t think the issue of job losses is necessarily overriding. Job losses from industries migrating across borders can be devastating to households and communities, as well; but these effects can – and should – be mitigated by instituting well-targeted safety net programs intended for affected workers, to facilitate their transitions to other employment opportunities. The alternative of trying to institute protectionist policies such as trading bans or imposing tariffs seems shortsighted and costly to the broader public who would end up bearing higher costs for goods and services.

For me, the vulnerability of the free trade orientation stems from its implications relating to war and peace. I used to believe that entangling trading relationships were a force for peace. Given current developments in Ukraine, however, I’ve come to recognize some naïveté about that perspective. It may still hold when trading partners are democracies; but when authoritarian regimes are involved, not so much.

In the face of Putin’s unprovoked invasion of Ukraine, the wanton bombing of civilian targets, and the broad-based pain and dislocation that Putin has inflicted on Ukrainians, the idea of using trade sanctions to isolate and punish Putin seems more than justified, but thus far the public face of Putin has shown few signs of retiring his goal of domination; and despite the heroic resistance to the Russian assault on the part of the Ukrainians, the country remains in a precarious predicament.

Without question, Putin will suffer under this regime, but so too will those seeking to enforce it. It’s also not at all clear that the coalition currently committed to punishing Russia economically will hold. As time goes by, channels to circumvent these efforts to isolate will likely start to develop.

Even with the thus-far coordination of efforts to isolate Russia and the surprisingly stiff resistance being shown by the Ukrainians, the big question still seems to be not whether Ukraine can force a withdrawal of Russian troops, but rather how long Ukraine will be able to hold out. The answer will depend on the level of military assistance that the West is willing to offer, but that assistance is limited by the West’s understandable resistance to the risk of expanding the scope of military activity beyond Ukrainian borders.

With or without direct military involvement by US or NATO forces to assist Ukraine, Putin’s persistence in pursuing his goals despite the extraordinary costs Russia has been realizing gives credence to the possibility of his doubling down by using chemical and even nuclear weapons. I had always recognized that a nuclear arsenal would serve as a defensive safeguard, but I hadn’t fully appreciated how that same weaponry could foster greater adventurism by nuclear powers in conflict with nations lacking those same capabilities. That imbalance is tacitly allowing Putin to perpetrate some of the most extensive war crimes in history.

From this vantage point, it seems like the most promising outcome of this travesty will come from Putin being deposed by those in his inner circle, closest to the levers of power. Hopefully, diplomatic pressures toward that end are being applied behind closed doors, and those involved won’t take too long to achieve success. Tragically, circumstances require at least some measure of patience. In the meantime, wide-scale suffering will continue – seemingly because of the will of one man.