The Money Game: Kevin T. Dugan

The Seize of Moscow. How far can Joe Biden push economic sanctions?

- Illustration by Michael Houtz

When President Biden addressed the nation on February 24 from the White House, Russian soldiers were already well on the way to Ukraine’s largest cities and scores of people were being killed on both sides. The response from the U.S. and the other G7 countries was to fashion the global financial system they control into a weapon and unleash it on Moscow. “Some of the most powerful impacts of our actions will come over time, as we squeeze Russia’s access to finances and technology for strategic sectors of its economy and degrade its industrial capacity for years to come,” Biden said, using the tough but bloodless language of war by other means.

Finance has long been a way to control states, particularly in the post–Cold War era. Limiting access to loans and trade has been one of the most effective tools of change in the global political system, getting Thailand to cut its public expenditures and allow more foreign investment in 1997, precipitating the ouster of the Indonesian government the next year, and generally paving the way for manufacturing to stream into Asia and Latin America. Before Russia ran afoul of the West, that western money gave its richest people Premier League teams, luxury real estate, and superyachts. “Sanctions are not just those technical, money-related things,” says Nina Khrushcheva, a professor of international affairs at the New School and a great-granddaughter of the late Soviet leader Nikita Khrushchev. “They’re also part of the social, political, and cultural.”