Ukraine: Market worship as a substitute for diplomacy

Anatole Kaletsky writes in a Reuters blog that the economic sanctions imposed on Russia in response to the seizure of Ukrainian territory “have proved pathetically ineffetual in deterring” Putin’s increased interference.

Even more interesting than the mechanics of sanctions, however, is his implied argument that U.S. policymakers are at the mercy of their own ideological (read: neoliberal) blinders about the role of money and economics and what that means for what is left of our collective biped future.

Kaletsky writes that the sanctions on Putin are reminiscent of an accidental experiment in Israel described by philosopher Michael Sandel in which parents were charged a fine if they arrived late to pick up their kids from daycare. The idea was to make them stop.

Instead, it led to more late pick-ups because the parents, logically and even predictably, no longer felt a moral duty to cooperate with the daycare center and simply viewed the charge as a babysitting fee. If the price was right, they now felt they had carte blanche to show up as late as they wanted. Kalestsky notes that the school “inadvertently transformed a moral relationship into a commercial one.”

President Barack Obama has been explicit about this. He repeatedly uses phrases such as “rising costs” and “calculus…to the Russian economy” in explaining his actions. The effects of trying to substitute economics for military diplomacy are likely to be highly destabilizing. For Russia, a weaker ruble and an economic recession are clearly a price worth paying for recapturing Crimea.

The analysis is telling and pretty scary when one thinks of all the territorial disputes in the world today and the disputing countries’ various leaderships sitting around with calculators saying to each other, How much will it cost us to grab the X Islands or bulldoze our way into our enemy neighbor’s lands?

Is this not another sign of the moral collapse of the neoliberal model in which all human activity is to be reduced to a monetary calculus under the benign reign of Markets, where people are merely Adam Smithian specimens of Homo economicus out fulfilling our individual desires and thereby creating the Best of All Possible (market-based) Worlds? Have we not been told for decades now that our social relationships must be transformed into commerce, that the state’s role as guarantor of equity and citizenship must be set aside by the inexorable logic of private enterprise and market magic?

Instead of retreating immediately to a weird faith in economic sanctions, U.S. and European leaders might have accepted the need for what Kaletsky calls “a long and complex diplomatic negotiation” that might have led to “a compromise reluctantly accepted by all parties.” But the very language belies everything about how the U.S. views itself these days. Sorry, we don’t do “reluctant acceptance”—the other guy does. Negotiations would have required a climb-down from the short-sighted faith dating from 1990 that Russia was toast and we/they were the only game in town.

Instead, as in Iraq, Afghanistan, Israel/Palestine, etc., America’s persistent insistence on getting its way, all its way and nothing but it way is leading to outright defeat, as probably will become obvious in the Ukraine in a matter of days.