Chokepoints: American Power in the Age of Economic Warfare
Feb 26, 2025
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Eddie Fishman, a former civil servant at the State Department and adjunct professor at Columbia, discusses his book on U.S. sanctions policy. He explores whether sanctions truly work, providing historical insights from cases like Iran and Russia. The conversation highlights how the U.S. dollar evolved into a pivotal economic tool through deals with Saudi Arabia. Fishman also critiques the challenges in current economic warfare strategies against China, shedding light on the complexities of governance and the role of key policymakers in shaping these strategies.
The evolution of U.S. sanctions policy demonstrates a transition from ineffective measures to more targeted strategies leveraging economic choke points, particularly the U.S. dollar.
The effectiveness of economic warfare, such as sanctions, hinges on the political clarity of objectives alongside coherent strategies and historical lessons.
Contemporary economic challenges underscore the complexities of global interdependence, raising concerns about the balance between economic warfare and potential military conflict.
Deep dives
The Shift from Violent to Economic Warfare
Economic warfare is highlighted as a less violent alternative to traditional warfare, suggesting that while it has its downsides, it can potentially prevent more destructive conflicts. The concept of using economic tools instead of military force, such as sanctions, resonates strongly, serving as a tactical measure to exert pressure while avoiding bloodshed. The implications of this approach raise questions about future international relations, especially as nations grapple with the limits of this strategy. It emphasizes that while economic warfare can be effective, its ultimate utility will depend on geopolitical contexts.
The Evolution of U.S. Sanction Policies
The episode extensively reviews the past 20 years of American sanction policies, referencing a detailed historical account in the book 'Choke Points.' It details how the U.S. developed a sophisticated approach to sanctions, transitioning from past failures, such as those against Iraq, to more innovative strategies that target key economic choke points. The account underscores the nuanced roles civil servants play in devising and implementing these sanctions under extreme pressure and time constraints. However, the narrative also reflects a tragedy, illustrating that despite these strategies, the U.S. has struggled to achieve its political aims, as seen in the cases of Iran and Russia.
Historical Choke Points and Modern Implications
The podcast delves into the idea of choke points, both historical and modern, with a specific focus on the Bosphorus Strait as an example of a strategic geographic feature. The discussion transitions to contemporary economic choke points, notably the global dominance of the U.S. dollar, which has transformed how economic power can be exerted without traditional military force. It emphasizes the critical role that U.S. control over financial systems plays in modern sanctions, presenting a stark contrast to historical methods of blockading via naval power. This evolution raises important questions about the future of global finance and the methods through which nations compete.
Shift in Sanction Strategies: From Iraq to Iran
The narrative traces the transition in sanction strategies, highlighting Stuart Levy's pivotal role in reshaping American sanctions policy around 2004. Initially, the perception of sanctions as ineffective was widespread, particularly following the sanctions against Iraq, which were deemed to have failed. Levy’s innovative mindset led him to view sanctions through new lenses, using the access to the U.S. dollar as a key lever to pressure foreign banks to diminish their dealings with Iran. This marked a significant shift in U.S. strategy, where rather than relying solely on military options, a tailored approach using financial tools became the norm.
The Lessons of Economic Sanctions on Geopolitical Outcomes
The episode discusses the results of economic sanctions on geopolitical affairs, particularly their role in shaping outcomes like the Iran nuclear deal. It outlines how the effectiveness of sanctions was historically underestimated, only to later be seen as crucial to achieving diplomatic resolutions. The sanctions against Iran illustrated a point where economic measures led to significant political change, demonstrating the potential of sanctions to bring about desired outcomes when they are supported by a coherent strategy. This suggests that for sanctions to work effectively, they require not just economic leverage but also a defined strategic objective.
Contemporary Challenges and Future Prospects
The conversation turns to the challenges of contemporary economic warfare, particularly relating to strategic competition with China and Russia. It highlights the growing complexities of global interdependence, potential resource shortages, and the temptation toward military confrontation-similar to historical patterns leading to conflicts. The narrative positions the importance of strategizing economic interdependencies while recognizing the risks that come with it, as nations prioritize self-sufficiency and deterrence in the face of geopolitical competition. Ultimately, it raises a cautionary note about the potential return to military conflicts if economic solutions fail to stabilize global relations.
Can sanctions really work? What lessons can we draw from US sanctions on Iran, Russia, and China in the 21st century?
To find out, we interviewed Eddie Fishman, a former civil servant at the Department of State and an Adjunct Professor at Columbia. His new book, Chokepoints: American Power in the Age of Economic Warfare, is a gripping history of the past 20 years of American sanctions policy.
In this show, we’ll talk about…
The evolution of U.S. sanctions policy, from Iraq and Cuba to Iran and Russia,
How Reagan’s deal with the Saudis turned the dollar into an economic chokepoint,
The incredible success of sanctions against Iran, and how that playbook could have been used to punish Russia,
Historical lessons in enforcement that are relevant for export controls on China today,
The role of great civil servants like Stuart Levey, Daleep Singh, Victoria Nuland, and Matt Pottinger in building state power,
Institutional challenges for economic warfare and the consequences of failure to reform,
Strategies for writing groundbreaking books about modern history.
Outro music: 1970s Iranian Psychadelic Rock, Gole Yakhe by Kourosh Yaghmaei https://www.youtube.com/watch?v=EmhqVPXOKo4
