How Game Theory Explains Why We Have to Sanction Putin — Even If It’s Costly

“The point of sanctioning is that, if we don’t, the norm against territorial incursions will collapse. Preserving this norm — and working to prevent similar abuses in the future — is worth the cost of sanctioning. But why is norm collapse an inexorable consequence of failing to sanction? Fortunately, a bit of game theory can help us answer this question.

Let’s call this the Repeated Sanctions Game, which has two players. In each round of the game, Player 1 (i.e., an adversary such as Putin) chooses whether to transgress, then Player 2 (i.e., NATO) chooses whether to sanction. Transgressing benefits Player 1 (Putin would like to annex Ukraine) but costs Player 2 (NATO would prefer that Ukraine be free). As in real life, sanctioning is costly not just to Player 1 but also to Player 2, who might prefer not to, for example, suffer higher prices or lose revenue from Player 1’s products and businesses as a result. Then Player 2 plays the game again and again — perhaps with the same Player 1, perhaps with another (Putin now, maybe Xi next time).

For Player 2 to deter future transgressions in this game, she would have to threaten to sanction Player 1 whenever he transgresses. This threat has to be credible, otherwise Player 1 will simply call Player 2’s bluff. Player 2 must, if called upon, reliably follow through on her threat.

How can this be worth it for Player 2, given that, as already acknowledged, sanctioning is costly? To see, we must factor future expectations into the cost-benefit calculation. When a transgression isn’t met with sanctions, everyone would reasonably expect that future transgressions may also go unpunished. This is the norm collapsing. So long as Player 2 cares enough about the costs of all those future transgressions, she’ll prefer the collateral costs of punishing the transgressor today to increasing the likelihood of future transgressions. It’s not preventing or stopping the current transgression that’s motivating Player 2 to sanction, it’s the fact that without sanctions as a response, there will inevitably be more transgressions.”

“what the international community is really trying to avoid is other, more rational actors, such as Putin’s eventual successor or Xi, inferring that future invasions will not be punished.”

“So, yes, it’s true that sanctions will hurt our economy, and it’s true that they may even push Putin to further escalate Russia’s aggression against Ukraine. That’s all really bad, but it’s not as bad as a future where national sovereignty is not respected. For the norm against territorial incursion to survive, everyone must forever know that we are willing to pay the cost to sanction.”

Economic Penalties for Putin’s Aggression Threaten To Impoverish the World

“two consecutive presidents, first Donald Trump and then Joe Biden, wedded to economic nationalism. “When we use taxpayers’ dollars to rebuild America, we are going to do it by buying American: buy American products, support American jobs,” Biden vowed in the recent State of the Union address. He’s unlikely to get much pushback from the public; while support for free trade rose under Trump it has since declined, according to Gallup. More Americans (61 percent) see trade as good for economic growth than see it as a threat (35 percent), but the numbers swing more as a matter of partisan politics than according to principled commitment.

That’s a shame because free-trade advocates are correct. While a strong case can be made that free trade is a basic human right involving consensual relations among individuals, it’s also a miraculous cure for misery. Over the last half-century or so, economists have rediscovered comparative advantage and that “trade openness is a necessary—even if not sufficient—condition for economic growth and reducing poverty,” as Pierre Lemieux wrote for the Cato Institute’s Regulation in 2020.”

“Economic and financial sanctions may cause Russia pain and add to the cost of invading Ukraine. But as governments around the world raise barriers and try to insulate themselves from future uses of weaponized trade and finance, the result is certain to be a world that is poorer and less free.”

To Beat Putin, Europe Needs America’s Clean Energy

“The European Union is dependent on Russia for almost half of its natural gas and a quarter of its oil. Germany alone imports 55 percent of the gas it consumes from Putin’s petro-state. As part of its invasion strategy, Russia thought it could use its natural gas and oil to blackmail Europe into passivity. Europe is belatedly beginning to shut off the Russian spigot, but it will pay a heavy economic price for the delay.

And for Europe’s energy switch to succeed, the United States must step up.

Just as we were the Arsenal of Democracy when fascism threatened Europe 80 years ago, today we must become the Arsenal of Clean Energy. That means we should finance and export clean energy to Europe in large quantities as quickly as possible. This approach would help protect our own security and economic interests, as well as the sovereignty, democracies, and economies of Europe, all while working to combat climate change.

Our goals should be: 1) make European energy secure; 2) help shift European countries to cleaner energy; and 3) create a massive clean energy market that strengthens supply chains and job creation in the U.S.”

“starts with an energy version of the “Candy Bombers” who supplied Berlin during the Soviet Union’s blockade in 1948. In this case, we could provide a temporary natural gas lifeline to Europe as they wean themselves off Russian energy. America has some additional capacity, and more coming online very soon, to send liquefied natural gas to Europe. We should combine a near-term increase in U.S. gas production and exports to Europe with assistance for European countries to, over the medium-term, reduce their reliance on natural gas by switching to other, lower-carbon fuels and increased energy efficiency.

Second, to ensure this lifeline leads Europe to a safe and sustainable future, the United States needs to create an American clean energy sovereignty fund. We should commit to $10 billion per year for the next decade to finance the export of U.S. hydrogen, nuclear, and carbon capture technology that can be deployed across Europe. The new technologies should be supported by both U.S. and European supply chains and workers to ensure economic growth across both continents. This government-backed entity would provide a significant cost-share for countries importing U.S. clean energy, particularly technologies that will be primarily made in and exported from the U.S.

As we are seeing now with Germany’s reconsideration of its decision to close its nuclear plants, even renewable-heavy countries need firm clean energy provided by technologies like nuclear power. This is even more important in industrial areas of Eastern Europe that need both the steady electricity and high heat that nuclear, or hydrogen, can provide.

Finally, as all of Washington knows by now, personnel is policy. To underscore the urgency of this mission, the Biden administration should create a new, senior position at the National Security Council to manage clean, firm energy and coordinate the alphabet soup of agencies involved. This position would oversee a new “Team Energy” of public and private sector experts who can cut through the bureaucracy.”

‘Things Will Only Get Worse.’ Putin’s War Sends Russians Into Exile.

“While the exodus of about 2.7 million Ukrainians from their war-torn country has focused the world on a burgeoning humanitarian crisis, the descent of Russia into new depths of authoritarianism has many Russians despairing of their future. That has created a flight — though much smaller than in Ukraine”

“Some who have fled are bloggers, journalists or activists who feared arrest under Russia’s draconian new law criminalizing what the state deems “false information” about the war.
Others are musicians and artists who see no future for their crafts in Russia. And there are workers in tech, law and other industries who saw the prospect of comfortable, middle-class lives — let alone any possibility for moral acceptance of their government — dissipate overnight.

They left behind jobs and family and money stuck in Russian bank accounts that they can no longer access. They fear being tarred as Russians abroad as the West isolates the country for its deadly invasion, and they reel over the loss of a positive Russian identity.

“They didn’t just take away our future,” Polina Borodina, a Moscow playwright, said of her government’s war in Ukraine. “They took away our past.”

The speed and scale of the flight reflect the tectonic shift the invasion touched off inside Russia. For all of President Vladimir Putin’s repression, Russia until last month remained a place with extensive travel connections to the rest of the world, a mostly uncensored internet giving a platform to independent media, a thriving tech industry and a world-class arts scene. Slices of Western middle-class life — Ikea, Starbucks, affordable foreign cars — were widely available.

But when they woke up Feb. 24, many Russians knew that all that was over. Dmitry Aleshkovsky, a journalist who spent years promoting Russia’s emerging culture of charitable giving, got in his car the next day and drove to Latvia.”

War Crimes Charges Could Help Putin, Not Hurt Him

“The role of popular elections as the source of ruling legitimacy is just one way in which it is hard to categorize the Russian political system. For all the talk of Putin’s dictatorial personality and wide latitude to crackdown on civil liberties, the institutions of Putinism were built by his democratic predecessor, Boris Yeltsin, enshrined in his 1993 constitution. Flawed and imperfect in practice during the tumultuous 1990s, these foundations were democratic in principle: Grassroots civil society flourished alongside a lively media environment, as legislators and leaders were chosen from a variety of contenders. Even as those liberties have subsequently been eroded and independent media curtailed, the institutions still specify that Russia’s leaders serve at the will of the people. Indeed, the ratcheting-up of Kremlin propaganda is meant, more than anything, to reassure Russians that Putin’s leadership is worthy of their continued support. Such peans to the people would be unnecessary in a classic, run-of-the-mill dictatorship.

Consequently, political scientists are at odds with how to describe Putin’s Russia. Some call it a “competitive authoritarian” regime, where democratic institutions and procedures simply provide a facade of legitimacy for the dictatorship. Others label it an “information autocracy,” in which the powers of state-run media are marshaled to build a public image of Putin as a competent leader, deserving of political support, and it works to generate the popular support he needs. What these different perspectives have in common is what Peskov said: that Putin’s political sovereignty ultimately lies with the Russian people, however manipulated or misinformed they might be.”

“Western hopes that the Russian people would rise up and topple Putin in a popular revolution seem further from reality today than at the start of the war. The smattering of protests across Russia during the first weeks of the war have largely fizzled out. Between the Kremlin propaganda machine in overdrive and criminalization of expressions of opposition, Putin’s approval in nationwide polls is now up to 83 percent, with 81 percent support for the “special military operation.”

What’s more, Russian elites appear to be consolidating behind Putin. Rather than diversifying internationally and finding safe havens abroad, powerful oligarchs and cosmopolitan elites—many of them under Western sanctions—now understand that they are tethered to Russia and to Putin personally. Once-feuding factions are realizing they’re all now in the same boat. Few will bolt for greener pastures in Europe or the U.S., even if they could.

In an eye-opening account by independent Russian journalist Farida Rustamova on the tribulations of Russia’s political elites since the war, she quotes a high-ranking source in a sanctioned Russian company as saying “All these personal sanctions cement the elites. Everyone who was thinking about a new life understands that, for the next 10-15 years at least, their lives are concentrated in Russia, their children will study in Russia, their families will live in Russia. These people feel offended. They will not overthrow anyone, but will build their lives here.”

Before the war, the dominant narrative of Kremlin-controlled media was that Russia is a mighty superpower—besieged on all sides by enemies and conspirators, both Western and homegrown—and only Putin could lead them. Lamentably, the coordinated international response to Putin’s bloody war has only solidified and reinforced that us-against-the-world narrative, and largely rallied the Russian people behind Putin.

In this context, the Russian response to the accusations of genocide in Ukraine have been predictable: It is all a Western “fake” meant to further impugn the dignity of Russia and its leader. Pro-Russian social media accounts have claimed that the corpses are either fake, or are actors, or were killed after the Russians left. The Russian Defense Ministry has claimed “not a single local resident has suffered any violent action” while Bucha was under Russian control. These are all claims that have been easily debunked. By parroting the official line of the Foreign Affairs Ministry that it could not have been Russia that committed such atrocities, but rather the United States staging a “provocation,” Kremlin state-run media only reinforces and retrenches the us-against-the-world narrative already widely accepted among the Russian people.”

The War in Ukraine Is Putin’s Fault, but 30 Years of Misguided U.S. Foreign Policy Didn’t Help

“it’s important to call out the bad U.S. foreign policy moves that helped get us here. And even though no one did this but Putin, the U.S.’s failed approach to Russia for the last 30 years—a bipartisan effort that includes mistakes by Presidents Bill Clinton, George W. Bush, Barack Obama, Donald Trump, and Joe Biden—deserves criticism as well.”

“Clinton could have completely revamped NATO now that its purpose—defending member nations against the expansion of the Soviet Union—was no longer applicable. Instead, Clinton, with the Republican Party’s support, oversaw an expansion of NATO. Hungary, the Czech Republic, and Poland all joined. Years later, Putin would cite this enlargement of NATO as one of the West’s “broken promises” that justified his Ukraine policy.”

“With the Clinton administration’s backing, NATO also intervened in Yugoslavia in 1999 to ensure an independent Kosovo. That military action never had the backing of the United Nations; it was a violation of international law, just like Putin’s attack on Ukraine.”

“At a 2008 NATO summit—one attended by Putin—Bush staunchly supported Ukraine’s eventual admittance to NATO, over the objections of France, the U.K., and Germany.
The Obama administration, of course, inflamed tensions with Russia when the U.S. took sides in the 2014 Ukrainian revolution. And then came Donald Trump. Democrats and their allies in the mainstream media ceaselessly accused Trump of being a Russian stooge, even a pro-Putin plant, installed by Russia as president of the U.S. due to a subtle influence campaign on Facebook. This was of course ridiculous—and as evidence of how ridiculous the claims are, Trump’s actual administration was just as foolishly tough on Russia as his predecessors. In 2017, Vice President Mike Pence even reiterated the 2008 Bucharest declaration.

The Biden administration maintained that same fiction. A clear declaration that the Ukraine would not be joining NATO might have deprived Putin of the intellectual ammo he required to move forward with this invasion. We don’t know for sure. But it was incumbent on the U.S. to try. NATO is a means to an end—a more safe and secure Europe—not an end unto itself. If expansion is creating the very conditions that NATO’s existence is supposed to prevent, it’s not working. Yet every single U.S. president since the end of the Cold War has misunderstood this. And now here we are.”

How Putin became the victim of his own lies

“dictators are often victims of the information bubbles they create around themselves. The sorts of errors that are easily avoidable in democratic systems (thanks to various checks) become commonplace in autocracies, and that leads to profound missteps by leaders.”

“It’s a mistake that dictators make where they become the victim of their own lies. To be more specific, it’s what happens when authoritarian leaders make catastrophic short-term errors because they start to believe in the fake realities they’ve constructed around themselves.”

“it’s the story of 22 years of consolidating authority in a place where crossing the dictator is potentially a death sentence. Putin has been in charge for a very long time, and he’s grown increasingly impatient with people who cross him. The effect of getting increasingly isolated and increasingly repressive is that you get increasingly bad information. If independent media is shut down and you can’t freely discuss things, if people are afraid of telling pollsters what they actually think, if propaganda is so rooted in the regime’s survival that it becomes really what you believe to be true, you’re going to make massive mistakes.
I think what happened with Putin is basically the combination of being surrounded by yes-men and being surrounded by propaganda. When you have both of those things, and you’re trying to invade a country that people around you probably think will go badly but they’re afraid to say so, it’s understandable that eventually you start to think, “Maybe it’ll go really well,” because that’s all you’re hearing.”

Assassinating Putin Won’t Work. It Never Has for America.

“We’ve tried it repeatedly. Often we have failed, but even when we seem to have succeeded, the long-term consequences have been terrible. An order from the Oval Office to assassinate a foreign leader would not break a taboo. It would only be

Putin Isn’t Just an Autocrat. He’s Something Worse.

“Putin’s trajectory increasingly resembles that of Hitler. Both men came to power after their countries experienced imperial dismemberment and economic collapse. Both promised to revive their nation’s glory and enjoyed enormous popularity. Both militarized and pursued state capitalism. Both relied on the army and secret police. Both identified their nations with themselves. Both promoted reactionary ideologies that identified one nation — Jews for Hitler, Ukrainians for Putin — as the enemy. And both used their national minorities living in neighboring states as pretexts for expansion. Both were also consummate liars and had deranged personalities. In this scheme of things, Putin’s invasion of Ukraine is equivalent to Hitler’s attack on Austria, Czechoslovakia or Poland. And we all know what happened afterward — a Vernichtungskrieg.”

“The alarmists were right all along”: A Moscow journalist on Putin and the new Russian reality

“For a long while, Russia has “flooded the zone” and bombarded the population with so many contradictory accounts of reality that they weren’t sure what to believe, or they were too cynical to believe anything. But now it’s full Orwellian control of reality, and that’s a much heavier lift because it’s not about undermining consensus, which is easy; it’s about enforcing one.”

“I have to be honest, there were a handful of people here who have been warning about this for a long time, who were telling people like me that this was going to be a fascist dictatorship one day, and we’ve been dismissing these people. We were like, “Come on, Putin is a cynic, he’s evil in so many ways, but at least he’s a rational guy. All he wants to do is get himself insanely rich. He’s not going to do anything really drastic.”
But we were all fucking wrong. The alarmists were right all along, and almost every one of them is either dead or in jail or exiled.”

“we’re in uncharted waters. All these major foreign media outlets, like the New York Times and the BBC, are fleeing Moscow. That’s never happened. The New York Times has had a bureau in Moscow throughout the entire 20th century, including three revolutions and two world wars and the entire Cold War. But now Moscow isn’t safe for the New York Times. I really don’t have the words to describe how unpredictable this situation is.”