Sanctions against Russia will not work because they will not hurt or harm Russian oligarchs

The ‘peace-keeping’ invasion of Ukraine by Putin has finally unleashed serious sanctions against Russia by USA, UK, EU states and some other significant nations. The sanctions will hurt Russia, and especially its people, quite hard. However, they are not going to work.

If Putin stops, which he might, it will be because he feels that he has achieved his goals - which are largely to help the Russian separatists in Ukraine, prevent Ukraine from joining NATO, and probably also to regain control over Chernobyl, a major nuclear power station from the USSR era.

There are two minor reasons and one major reason why the sanctions will not stop Putin. The minor reasons include the fact that the West cannot totally isolate Russia - not just China, but even countries like India and Iran will remain escape valves for Russian export and import.

The other minor reason is the fact that the sanctions will hurt the West too, especially Europe, and so, if Putin sticks it out, there is a good chance that he will get away with it. Western capitalist interests are not good at taking much pain. A few months of endurance by Putin and some polite noises afterwards might be sufficient to induce Western capitalists to get their governments to adopt a more lenient position. All this is obvious enough.

But the major reason is something that no one is talking about - it has to do with the nature of global neoliberal capitalism. For the sanctions to work, they would have to hit and seriously cripple the Russian oligarchs who sustain Putin and are sustained by him. The sanctions are intended to do so, and they will hurt them a bit. But mostly the oligarchs will shrug off the hurt, for it won’t be significant - it is the ordinary Russian people, some of whom are against war, who will bear most of the hurt.

These two factors have to be considered together: the oligarchs will largely slip out of the net of sanctions, and ordinary Russians will be trapped in it and suffer from it. The Russian oligarchs will escape because, finally, they belong to the top three percent of a neoliberal capitalist world, which is constructed in such a way as to enable ‘free’ capital to escape governmental control.

These are the very structures that enable, say, an American billionaire to make money despite multiple ‘bankruptcies,’ and even to become the president of the nation without showing evidence of paying taxes commensurate with his fortune.

These are the very structures that enable Indian billionaires to default loan payments worth many millions and still live an affluent life in some Western nation, safe from legal action. These are the very structures that enable the very rich of any country to move their millions into off-shore accounts and operate shell companies.

The sanctioning and sanctimonious West is not going to change this system - actually the system has largely been made and continues to be sustained by the West’s political, ideological and financial institutions. Within this system, Russian oligarchs are global corporate billionaires first, and Russians complicit with Putin only later.

Like all such people, they know exactly how to operate the global neoliberal system to avoid surveillance and reduce control. Putin knows this. He knows that a big fish or two might get caught in the net of sanctions, but his shoal of sharks will largely evade it. They will be aided in doing so by the very global system that Western powers created and fought the cold war to maintain and develop.

Putin also knows that the people who will be hurt by the sanctions will be ordinary Russians. But he is not afraid of ordinary Russians, for the simple reason that he is not ruling a real democracy. As long as he has his military generals and oligarchs backing him, and there is no reason they will stop now, he can ignore the sufferings of ordinary Russians and even put them in jail for throwing a paper cup at a policeman. They have been suffering for pretty long in any case. He has managed to stay in power despite their sufferings. What does he have to fear?

In short, no matter how sanctimonious the West gets, the global neoliberal system that sustains it is just perfect for dictators like Putin - they can use it to enable a handful of complicit billionaires, and they can safely ignore the consequences that their decisions may have for ordinary citizens. This, more than anything else, explains Putin’s invasion of Ukraine. He doesn’t just have his oligarchs and generals backing him. He even has the global neoliberal system essentially backing him, and he just has to wear out some political indignation among Western powers who are just as deeply embedded in that system. He knows they won’t change the system. It is, after all, their system.

( The writer is an author, academic and independent commentator based in Denmark. Views are personal)