U.S. use of unilateral “weaponization of finance” makes top ten geopolitical risks of 2015

Economic Sanctions

As much as I really wanted to write today about how confusing it is to be angry about American Sniper, especially from someone like Seth Rogen, who just had his right to freely make bad films defended by the same country Chris Kyle loved enough to protect, I might be too emotionally invested to be objective and, as this guy points out, it’s kind of a waste of breath or thought. But after I actually see it, maybe I’ll write a review…

So, instead, even though it’s less sexy, here’s the topic du jour, because I just recently came across the terminology, had no idea what it meant, and now am fascinated by the concept. Ian Bremmer, Eurasia Group’s founder and president, has chosen as one of his top concerns for the coming year something he calls the “weaponization of finance”:

The U.S. is focusing largely on what Bremmer calls the weaponization of finance, one of his Top Risks for 2015. “The U.S. is becoming much more unilateral in the expression of its foreign policy and its national security. We see that with drones, we see that with surveillance. We also see it with the willingness to use the dollar and access to the American markets and the U.S. financial institutions as both a carrot and a stick.”…

But the weaponization of finance is not just about economic sanctions against nations, says Bremmer. The U.S. uses similar tactics against banks and other institutions that are in allied countries who may not want to support U.S. sanctions. “So we say ‘Okay, no problem. We’ll just fine you $10 billion or we’ll take away access, we’ll take away your license to do business in the U.S.,” says Bremmer. “That’s not exactly an economic sanction but that is using the almighty dollar, which is a much more effective tool than a nuclear arsenal.”

Bremmer sees sanctions, fines, and access to U.S. markets as an effective but potentially disruptive tool in geopolitical relationships. He says it will ultimately play a role in eroding the transatlantic relationship.

Bremmer’s not wrong, of course. The interplay between national economies, including how those countries trade goods and services, definitely will — always has — had a role in war and peace. In this country, Alexander Hamilton created our banking system with a keen eye toward how England managed theirs because it helped support that nation during times of war. In today’s market, of course, much has been made about our reliance on oil and how that affects the relative turmoil in the middle east and our relationships with some of South America. And oil is simply one market — there is also material goods, industrial machines and equipment, banking and finance, capital goods, consumer goods, automobiles, etc. And for Bremmer, our decision to apply sanctions to a country’s ability to trade in these and other goods is akin to another weapon in the war. And this is a worry to him apparently, at least partially, because:

Governments targeted by sanctions will increasingly treat companies that comply with them as instruments of American power. This will expose these firms to heightened risks of retaliation— from regulatory harassment to contract discrimination to cyber-attacks. The US financial sector is particularly vulnerable on this count.

The question becomes, especially in this age of exhaustion with foreign occupation and the rise of a libertarian desire to pull back on aggressive foreign policy, why is controlling trade and applying financial pressure or sanctions not exactly what we should be doing if we prefer not to have our young men with boots on the ground? What else is left to us then except to just roll over and be overtaken as a nation? I’m not sure what Bremmer thinks is the right way to live in a global market but using our financial strength and independence to our advantage responsibly seems like a pretty good start.

Perhaps I just don’t understand enough about the concept — as mentioned, it was a new one to me — but the idea that, particularly if we no longer wish to be physically at war (which doesn’t look like the trajectory of our current future but is always something to hope for), we should not control the less lethal weapons in our arsenal has me personally confused. Bremmer’s contention that people might be mad at us sounds a lot like the continuation of the apology tour that began in 2008. Which is why, rather than stressing out over weaponizing finance, we need to elect leaders that can rebuild relationships with some of these countries, making sanctions and financial restrictions less neccessary.

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