Edward Fishman - How the Global Economy Became a Weapon of War
Apr 8, 2025
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Edward Fishman, a foreign policy expert and Senior Research Scholar at Columbia University, dives into the evolution of economic warfare. He discusses how sanctions have transitioned from Cold War tactics to modern measures against Iran, Russia, and China. Fishman highlights the chaos that economic coercion can cause when misused. The conversation also explores pivotal historical events, such as the Iran nuclear deal and the 2014 Crimea crisis, showcasing the significant geopolitical shift in U.S. foreign policy centered on financial strategies.
Economic warfare has evolved to allow unilateral sanctions that can be imposed with minimal effort, raising concerns about their potential misuse.
The effects of hyper-globalization and great power competition have led nations to prefer economic sanctions over military interventions in foreign policy.
The recent sanctions on Russia demonstrate the complexities of economic warfare, highlighting challenges such as geopolitical ties and the need for precise execution to avoid broader economic fallout.
Deep dives
The Evolution of Economic Warfare
Economic warfare has shifted significantly from the past to the present, transitioning from a need for international coalitions and military force to a more unilateral and simplified approach. In earlier times, such as the 1990s, imposing economic harm required broad support from entities like the United Nations and the deployment of naval forces, exemplified by the extensive embargo imposed on Iraq. Today, the United States can enact severe economic measures simply by signing a document, reflecting a dramatic change in how countries wield economic power. This newfound ability to impose sanctions with minimal effort raises concerns about the ease with which countries can now engage in economic warfare.
Three Factors Leading to Modern Economic Warfare
The rise of 21st-century economic warfare can be attributed to hyper-globalization, political shifts, and the re-emergence of great power competition. Hyper-globalization created vulnerabilities known as choke points, where the U.S. holds a dominant position in crucial areas, such as the dollar-based financial system and semiconductor supply chains. Political sentiments shifted post-9/11, leading to a reluctance to use military force, thereby favoring economic sanctions as a strategy for achieving foreign policy objectives. Additionally, the changing dynamics with countries like China and Russia, especially following events like the invasion of Ukraine, have prompted nations to embrace economic warfare as the primary mode of competition.
Case Studies of Economic Sanction Success
Studying the history of sanctions against Iran reveals the effectiveness of economic warfare in achieving diplomatic outcomes. Following the failure of the military strategy in Iraq, the U.S. prioritized secondary sanctions targeting Iran's financial institutions, which forced banks worldwide to sever ties with Iran. This effectively isolated Iran from the international financial system and contributed to significant domestic economic pressures, eventually leading to diplomatic negotiations. The juxtaposition of Iran's sanctions and the strategies utilized against Russia highlights the adaptability and evolution of economic warfare, as countries find innovative ways to apply economic pressure.
Challenges in Implementing Sanctions Against Russia
Imposing sanctions on Russia after its aggression in Ukraine presents unique challenges due to the complexity of the Russian economy and existing geopolitical ties. The swift and impactful nature of sanctions showcased by the U.S. in 2022 aimed to deliver immediate economic shocks to Russia, yet required careful calibration to avoid collapsing the European economy. Moreover, the advance preparation undertaken by Russia, which included building substantial foreign reserves, undermined the effectiveness of sanctions. As a result, while the West sought to limit Russia's capabilities, external factors such as fluctuating global oil prices complicated the overall success of these economic measures.
The Future of Global Economic Relations
The current global landscape is characterized by increasing economic insecurity, prompting a re-evaluation of interdependence among nations. As countries implement their own economic arsenals to defend against potential sanctions, a shift away from globalization may be inevitable. This emerging environment could lead to a scenario where nations prioritize local production and self-sufficiency at the expense of broader international trade relationships. Observing this transition is crucial as it not only threatens economic stability but also raises the risk of military conflicts, should nations pursue aggressive tactics to secure resources and markets.
Foreign policy expert and Senior Research Scholar at Columbia University, Edward Fishman, joins us to reveal the history of sanctions and the threats to economic security today. From the role of sanctions during the Cold War to economic warfare against Iran, Russia, and China, to Trump's current sanctions across the globe, Fishman reveals the power of economic warfare—and the chaos it can wreak in the wrong hands.
