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October 30, 1998

Why Economic Sanctions Don’t Work

Congress has gotten in the habit of imposing economic sanctions in order to punish foreign governments. It is a habit Congress should break. By Hoover fellow David R. Henderson.


When I was a kid, the boy next door once played a nasty trick on my brother Paul: our neighbor held his cat in his arms, brought it within a few inches of Paul’s face, and pulled its tail. The suddenly angry cat bit Paul’s face. My brother and I were upset; the cat, we thought, should have bitten the perpetrator’s face. I think of that incident whenever I hear people call for economic sanctions against a whole country.

When governments impose sanctions, the officials implementing the policy want to harm the dictator or bad guy heading the other country’s government. That’s the goal. What they do to achieve it is intentionally harm many innocent people in those countries by cutting them off—if the sanctions are effective—from food, medicine, and other goods that they need or value. The sanctions almost always work in a limited sense: they impose some harm on innocent people in the target country. But that’s not the goal. Nor is the goal to cut off the dictator from food, medicine, et cetera. You can be sure that Saddam Hussein and Fidel Castro are not hurting for antibiotics or high-quality food. No. The harm that the advocates of sanctions want to inflict on the bad guys is indirect. They are yanking innocent people’s tails so that those people, like our neighbor’s cat, will lash out at whoever’s face is right in front of them. They want those people to see their own government as the enemy and to try to overthrow it.

But people are smarter than cats. When people suddenly find food, clothing, medicine, and other goods in short supply, when they find themselves a lot poorer and focusing desperately on day-to-day survival, they will take the time to find out who is responsible. And guess what? They do find out. Although governments in embargoed countries like Iran, Iraq, and Cuba strictly control what newspapers, radio, and television report, one piece of information that is sure not to be censored is the role of outside governments in the country’s economic distress.

Of course, those governments will exaggerate the harm done by the sanctions. Although socialism is what’s killing poor people in Cuba, for example, Fidel Castro has, for almost forty years, blamed Cuba’s economic problems on the “blockade,” his word for the embargo imposed by the U.S. government in the early 1960s. But he can plausibly make this claim because the embargo exists. Likewise, although much of the Iraqis’ pain is caused by Saddam Hussein’s diversion of resources to his war machine, the pain caused by economic sanctions is quite real.

What do people in embargoed countries do when they find out that foreign governments threaten their survival? They want to do what the cat wouldn’t do: bite the hand or face of the perpetrator. In fact, I can think of no case in history where as a result of sanctions imposed by government A on people in country B, country B’s people overthrew their own government. It’s the stuff of novels, and not very good novels.

To understand how people in embargoed countries feel, you will have to use your imagination. Picture yourself back in 1974. President Nixon’s popularity has hit bottom. Many Americans want him out, but he holds on. Now imagine that the head of a freer country—say, Switzerland—thinks Nixon is a vicious leader and imposes sanctions on us. Because of these sanctions, we can’t get medicine and we can’t feed our families adequately. We spend our days scraping for the basics we need to survive. (Of course this is implausible in the United States, which is why I said you would have to use your imagination.) Now ask yourself: Is your first thought that you should organize and try to overthrow the president?


You can be sure that Saddam Hussein and Fidel Castro are not hurting for antibiotics or high-quality food.


I bet it’s not. For one thing, you don’t have much of a shot at succeeding. The Nixon administration is probably in charge of allocating the scarce medicine and food. But more important, you’re furious with the Swiss government. “Who are they to interfere in our country’s affairs?” you ask. So if Nixon offers you a war against the Swiss infidels, you’re likely to say, “Hell, yes,” and postpone thoughts of getting rid of your president until you’ve gotten those foreign bums off your back. And that’s probably how Iraqis are feeling right now about the United States and other governments that are participating in the embargo.

THE CAPITALISM VIRUS
Economic sanctions simply won’t spark a revolution. History has proved this. But that doesn’t mean that things are hopeless. There’s an alternative way to undercut the power of dictators: kill them with kind capitalism. End the embargo. Let foreign goods flow into Cuba, Iraq, and Iran, so that the people there can see the fruits of a free society. Of course, Fidel Castro and other dictators won’t necessarily let those goods in, but then at least they’ll be the ones who are seen as the bad guys. In his book Dismantling Utopia: How Information Ended the Soviet Union, Scott Shane, who was the Baltimore Sun’s Moscow correspondent from 1988 to 1991, writes that in the late 1980s private entrepreneurs in Moscow with VCRs and reels of wire set up primitive cable systems. Needing content, they often used American movies like Harry and the Hendersons. The result: Soviet citizens saw average Americans with nice houses, refrigerators, cars, and high-quality food, and they said, “I want.”

An especially important element of this strategy is unrestricted international sales of personal computers. The more PCs there are in unfree countries, the greater the number of people who will be able to log on to the Internet and discover what free speech and a fairly free economy are all about.

It’s true that the Chinese government, for example, requires Internet users to register with it. But there are only two ways China’s government can enforce its rules on content over the Internet: monitor on-line users or use filtering software to block prohibited material. Both methods, notes the February 7 issue of The Economist, are losing battles. Monitoring becomes much more difficult as the number of users multiplies: More than 250,000 PCs in China are connected to the Internet, and the government expects the number to reach 4 million within two years. And the professionals needed to write sophisticated filtering software are being lured away to more productive uses by the private sector. Moreover, even if filtering and monitoring could work, many Chinese would still see a lot of things on the Internet that would undercut oppression in China. Although CNN and Time’s web sites are currently blocked, The Economist’s, for one, is accessible.

The genie is out of the bottle. Let it out in Cuba, Iraq, and everywhere else too. Let’s end embargoes and allow free trade.


David R. Henderson is a research fellow with the Hoover Institution. He is also an associate professor of economics at the Naval Postgraduate School in Monterey, California.


Reprinted from Red Herring (www.redherring.com), May 1998, from an article titled “Just Sell Them the Goods.”

Available from the Hoover Press is a videotape containing “On Guard” and “National Insecurity,” two episodes of the weekly television program Uncommon Knowledge , jointly produced by the Hoover Institution and the San Jose PBS affiliate KTEH, which feature Hoover fellows George P. Shultz and William J. Perry discussing threats and challenges facing the United States in the post–Cold War world. To order, call 800-935-2882.