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Don’t buy this argument, just don’t buy it

But the concern that other governments might become wary of keeping their funds in the US for fear of future seizures overlooks some key points. Seizing Russia’s frozen assets would not affect other countries’ assets or change the incentives of governments that are not planning a major war. Moreover, by not seizing these funds, western countries are signalling that governments waging brutal wars of aggression can violate international law and simultaneously benefit from it to escape the consequences of their actions. Instead, G7 leaders should send a clear message: no country can have it both ways. By deterring other bad actors from violating international law, such seizures could act as a peace-building measure.

Because what’s going to be the next violation of international law that justifies stealing the cash? Misgendering someone? Not vaccinating as the WHO says? Not reducing inequality?

Once the power is used its use will expand.

33 thoughts on “Don’t buy this argument, just don’t buy it”

  1. Bloke in North Dorset

    The argument I heard set out is quite sound:

    Reparations for wars of aggression are part of international law but only got settled after the event.

    This is the first time the aggressor has had state funds lodged in other countries’ banks. The only question is whether or not you can get the reparations before the end of the conflict.

    I was persuaded, but I accept on this subject I am open to that persuasion. Its only 20 minutes:

    In the last few days of 2023, the United States that working groups from the G7 explore ways to seize $300 billion of Russian state assets. Given the news, we are re-releasing a members-only podcast with Philip Zelikow, a senior fellow at Stanford University’s Hoover Institution, which was recorded and released on Dec. 19, 2023. Aaron and Philip discussed the legal grounds to seize Russian assets held in Western banks, Moscow’s potential retaliatory options, and whether a seizure would be escalatory.

    https://open.spotify.com/episode/1tXgm4ATNAVQVfj0GMun1s

  2. “Nice football club you’ve got there Sheikh Well-Loaded.”.

    Because a precedent has now been set and libertarian/rule of law pushback was conspicuous by its complete absence.

  3. ’I was persuaded, but I accept on this subject I am open to that persuasion.

    The slope is slipperyist when it’s one no-one can reasonably object to…

  4. If the US seizes the assets, China would become the alternative of choice and the dominance of the dollar would be eroded. For this to work China needs to first pull assets from the US, but this has been happening for some time. There has a sustained slowdown of Chinese FDI in the US since 2017. Annual investment has dropped from $46 billion in 2016 to less than $5 billion in 2022.

  5. Or maybe state-owned assets, as opposed to private individuals, are sacrosanct in which case supporters of clubs like Manchester City and Newcastle owned or controlled by dictatorial terrorist supporting gay prohibiting regimes (who also appear to have the green light towards engaging in bloody long-standing wars with their smaller neighbours) can breath a sigh of relief.

    Just to complicate matters further western governments including our own have had no issue in recent decades when freezing state assets of certain Middle Eastern regimes.

  6. Bloke in North Dorset

    No, this isn’t a slippery slope argument as that link I provided makes clear. Its a rule of law argument and will be taken to through the international courts.

  7. International law? How amusing. International law is what states can get away with. You’re not seriously looking for equality under, are you?

  8. “Seizing Russia’s frozen assets would not affect other countries’ assets or change the incentives of governments that are not planning a major war. “

    You don’t need to worry about government snooping if you have nothing to hide.

    If you don’t do anything to attract the police, you needn’t worry about abusive police.

    All are basically the same argument. All are incredibly dumb.

  9. But almost two years after Russia launched its full-scale invasion, it is increasingly clear that the international community can and must do much more to help.

    Western taxpayers will be delighted to hear that, a hundred billion dollars and six million refugees later, we “can and must” keep sacrificing for Ukraine, while Ukraine keeps sacrificing 48 year old Dads it kidnapped off the streets.

    Just another two years to slow the spread!

    The supposed negative effect of seizing Russian assets on other countries’ willingness to deposit funds in the US and Europe, were it real, would have become apparent when these funds were frozen in early 2022. Notably, there has been no capital flight from the US or Europe. This is partly because there are few safe alternatives to the established financial system. Assuming that governments do become wary of keeping their assets in the US, Europe, or Japan, where else are they going to hold them? Even if they set aside concerns such as capital controls, would they feel more secure holding their money in, say, Chinese institutions?

    2022-2023 saw a queue forming to join BRICS and countries are de-dollarising everywhere you look. Saudi Arabia is helping them by offering to sell oil in Yuan. These all seem potentially significant to Mr Stiglitz’s argument but aren’t mentioned in his money heist plan.

    Another, related argument against asset seizure is that it can be carried out only once, because once it’s done, no country would leave its reserves or other assets in the US or the EU. But, even if true, the argument is not persuasive: a tool that cannot be used is essentially worthless, and there has never been a more appropriate time to use it than now.

    No, the argument is that you can only weaponise the banking system once because the banking system is not a weapon. Use it as a weapon and you will break it.

    But Joe wants Total War.

    But do you, dear reader, want total war? Do you want it, if necessary, more total and radical than anything that we can yet today even conceive?

    But the specific use of the confiscated funds is a secondary concern.

    Lie.

    While 90% of the American security assistance allocated to Ukraine is spent in the US, the seized Russian assets could be used to support Ukrainian forces on the ground and finance the massive recovery effort.

    $300 Bn sounds like a lot of money, but divide that by an unspecified number of Hunter Biden watercolours, 10% for the Big Guy, Lockheed Martin wetting its beak etc. and soon you’re left with a much smaller amount for Ukranian oligarchs to put into their Panamanian bank accounts.

    Unfortunately it won’t buy artillery shells, tubes or missiles. Our problem with supplying these to Ukraine is not a lack of cash, it’s due to our lack of factories, raw materials, cheap energy and skilled labour to produce the Tesco Basics of warfare in war-winning quantities.

    Anybody find it a little jarring that Nobel laureates and broadsheet newspapers are now publicly advocating theft?

    Also, if we want to reconstruct Ukraine, don’t we need to stop the war? How is nicking a load of money from the side that’s winning the war going to help bring about a ceasefire? (Burgers?)

    Niccolo Machiavelli warned us about dealing out small injuries, but in 2024 we’ve intellectually progressed to the point where we now think wars are caused by “orcs”. By 2025 we may even be potty trained.

  10. So here’s a potential outcome of Money Heist.

    Biden: does money heist

    Putin: does Odessa.

    Do we want Russia to control the entire Black Sea, instead of just most of it? The Russians will look to exact retribution, and their likeliest way of doing that involves grinding more territory into the Russian Federation. What are we going to do, triple-dog sanction them?

    Is Ukraine’s coastline worth $300Bn?

    Serious question, because the Western powers are the ones making the decisions here, and have been since Boris Johnson flew into Kiev to stop peace breaking out. How many dead Ukranians and how much lost Ukranian territory are we in the collective West willing to sacrifice? At what point does the cumulative damage to Ukraine (and the West) make it not worth continuing the fighting?

    War is just a means of achieving a political outcome, it’s not meant to be an end in itself. What political outcome do we think we’re going to achieve in Ukraine?

  11. It just goes to show that “a lawyer with his briefcase can steal more than a hundred men with guns.” (Don Vito Corleone)

  12. Isn’t international investment correlated with respect of property rights, and this is believed to be a causal relationship? If we accept this then it’s fair to also accept that reducing these property right must reduce investment. The global financial system is based on trust and certainty, and anything that breaks this guarantee will have a wider impact, as this new risk is priced in.

  13. Reparations for wars of aggression are part of international law but only got settled after the event.

    This is the first time the aggressor has had state funds lodged in other countries’ banks. The only question is whether or not you can get the reparations before the end of the conflict.

    Aren’t reparations paid from the loser to the victor?

    And in that case, isn’t it more likely that we’re going to see Ukraine having to pay reparations to Russia.

    Would probably have been a better deal for Ukraine to sell the contested areas to Russia, rather than sacrifice so many lives, lose so much materiel and spend insane amounts of money.

  14. @Steve
    “War is just a means of achieving a political outcome, it’s not meant to be an end in itself.”

    If only.
    But Clausewitz was an honest man.

    War is a reason for paying titanic amounts of taxpayers’ money to companies whose lobbyists then enrich the politicians paying it.
    Selling honours for the odd £1m ( Bliar/Mandelbrot) is so petty, the child’s lemonade-stand of trousering. It takes a real politican (TM) to trouser a few billions, expecially if they know nothing about oil companies, nor does their son.

    So you need a Forever War to keep the bribes flowing. The Ukrainians are today’s Afghanis/Iraqis/Vietnamese etc etc.

    We should have a sweepstake: “Whose next?”
    My money is on Poland, because the US is running out of Ukrainians (unless the Germans start loading them onto trains at gun point, which is currently under discussion). And the EU will obey.

  15. Bloke in North Dorset

    Did any of you listen to that podcast before beating up your straw men?

    There is precedent for states paying reparations after aggressive attacks on another sovereign country. It just so happens that in this case the aggressor had money in western banks, that’s never happened before. A number of international lawyers have set out a case for some/all that money to be used to pay reparations for damage caused so far and they are going to take it to the international courts, the same courts that would be used in the long run.

    They are not arguing for the confiscation of oligarchs’ yachts or football teams, they even state that would be illegal.

    Why not listen to what the guys who will be making the case in court has to say rather than rely on a potted version in the Guardian?

  16. @BiND
    Would me more convincing an argument if:
    1. “international law” didn’t just mean do what the US tells you, or else”
    and
    2. The result will be 100% self-injury, as it makes the entire western banking, trade and investment business too dangerous. And all those good from China, and oil & food from RoW, will be cash, in yuan or gold, up front. Your credit no good, sahib.

  17. Yes there are historic precedents for enforcing reparations on the loser.
    Versailles Treat 1919 inflicted reparatuions on Germany and Austro-Hungary which as starving, impoverished losers of the WW1 they were quite incapable of paying.

    Confiscated goods undermined the winners’ industries and farms, the victimised nations banks collapsed, cue the Depression, and whatever came next. Worked so well last time, we must try again.

    Better to build bridges and understand the opposing viewpoints then enforce more self harm and hatred.

  18. unless the Germans start loading them onto trains at gun point

    🙂

    Who’s next

    Isn’t that the current Middle East gig (for now, I get confused)?

  19. $300 Bn sounds like a lot of money . . .

    This rather mundane aspect is actually the best argument against a final seizure. It’s simply not enough to make any difference big enough to outweigh the known and unknown financial / geopolitical risks. If it was enough to substantially harm Russia as well as sufficiently arm and rebuild Ukraine then you could make a pragmatic argument to drop principle to take the risk. But it isn’t, so don’t.

  20. “They are not arguing for the confiscation of oligarchs’ yachts or football teams, they even state that would be illegal.”

    Thats odd, because I thought thats exactly what the UK (and other EU countries) have done.

  21. Bloke in North Dorset

    @TTC I agree in parts on Versailles. The original demands were tough but understandable, but the problem was that they refused to give Germany the breathing space to rebuild their economy. What wasn’t acceptable, it was argued at the time, was insisting on payments when it was obvious going in to 1923 and during the economic crash and inflation of that year. Instead of renegotiating, as Britain and the US wanted France not only stuck to their guns but invaded, exacerbating the problem.

    In this case that money is already frozen and its hard to see it ever going back to Russia unless they voluntarily pay reparations.

    @PJF $300 Bn might seem a lot in the west but as a start its going to help much poorer Ukraine. Also, companies that have had their business in Russia can apply for reparations.

    @Jim And that’s why I didn’t support those moves but think this one has merits, to the extent that I followed the legal arguments they made.

  22. TtC – So you need a Forever War to keep the bribes flowing. The Ukrainians are today’s Afghanis/Iraqis/Vietnamese etc etc.

    I was hoping I was the cynical one, but of course the war has been a nice little earner for lots of horrible people. It’s like the paramilitary wing of Covid or something.

    We should have a sweepstake: “Whose next?”
    My money is on Poland, because the US is running out of Ukrainians (unless the Germans start loading them onto trains at gun point, which is currently under discussion). And the EU will obey.

    Poland has been saying “lemme at em, Uncle Scoob Sam!” for long enough. It depends on how the war ends. The US corporate media has been trailing a ceasefire or armistice because the Biden administration would like to take Ukraine off the table before the US presidential elections.

    That would be a big win if it can be achieved. The neocons will hope to use it as a pit stop to rearm and reorganise before the next proxy war against Russia, but the neocons aren’t all powerful and could be shown the door depending on which faction(s) dominate US politics in future.

    BiND – $300 Bn might seem a lot in the west but as a start its going to help much poorer Ukraine. Also, companies that have had their business in Russia can apply for reparations

    Mate, it’s Ukraine.

    A country that can’t (won’t) even stop its government officials stealing cancer medicine from public hospitals.

    Johnny Hohol can expect to see precisely none of that money, it’ll all be stolen. Ukraine is just that kind of country, and Ukranians are that kind of people. The war hasn’t reduced any of the endemic, African style corruption in Ukraine, everybody’s on the rob more furiously than ever even as their country is savaged:

    Amid all the pressure to root out corruption, I assumed, perhaps naively, that officials in Ukraine would think twice before taking a bribe or pocketing state funds. But when I made this point to a top presidential adviser in early October, he asked me to turn off my audio recorder so he could speak more freely. “Simon, you’re mistaken,” he says. “People are stealing like there’s no tomorrow.” – Time magazine

    Forget it, Jake. It’s Kiyiv.

  23. In a shooting war, Russia (and China) will take Western assets in a heartbeat. Or do you think this is the one nicely Putin will observe?

    If anything is going to keep China out of Taiwan it is this.

  24. Chester – “in a shooting war…”

    Ukraine is a shooting war.

    It’s the biggest shooting war we’ve seen on the European continent since Uncle Adolf popped his clogs. White Christian men are being slaughtered as if it was 1917.

    Hopefully we can cool things down with Russia and China, only an insaniac would want more of this. Idk how it’s physically possible to not be disgusted at the waste of it all.

    Horrible shitty senseless fucking murder.

  25. Bloke in North Dorset

    @steve

    I’m sure you’ll be pleased to learn that there’s recent photographic evidence of Nazis fighting in Ukraine:

    11/ Third, a photo of Silchenkov (presumably released by his family) shows him wearing a neo-Nazi symbol, the sonnenrad or ‘black sun’ – an ancient European symbol that has been appropriated by far-right extremists.

    https://x.com/ChrisO_wiki/status/1742483630763491698?s=20

  26. Steve: “So here’s a potential outcome of Money Heist.
    Biden: does money heist
    Putin: does Odessa.”

    If you were capable of ever taking Odesa, you would have done so when you still had a Black Sea fleet.

  27. Psul, Somerset – If you were capable of ever taking Odesa, you would have done so when you still had a Black Sea fleet.

    I can take or leave these 100 IQ hot takes and apparent early onset dementia, but remembering to use the politically correct Ukranian neo-spelling of “Odessa” is… ow you say?

    Le chef’s kiss x

    BiND – Why would I be pleased by that?

    Philip – Putin has already been indicted at The Hague. Has he shown up yet? Instructed lawyers, even?

    It’s worth remembering what they indicted him for (evacuating children from a war zone). Since the ICC is a UN organisation, I assume they’re upset the children can’t now be sacrificed to Moloch.

  28. Bloke in North Dorset

    Got called away for dinner and didn’t finish the post.

    Just a shame for Steve that it isn’t a Ukrainian.

    12/ Russian soldiers have been seen wearing the sonnenrad before; for instance, it’s part of the insignia of the Rusich mercenary group. It’s not clear which unit or group Silchenkov was fighting with, or whether the sonnenrad represents his unit or his own affiliations.

  29. I can take or leave these 100 IQ hot takes . . .

    Steve, have you reverted to your earlier position that Putin can take Ukraine anytime he wants but just isn’t doing so for reasons? About the only way he “does Odessa” in the current scenario is nuke it.

  30. PJF – Steve, have you reverted to your earlier position that Putin can take Ukraine anytime he wants but just isn’t doing so for reasons?

    Russia would be mental to try to occupy the majority of Ukraine and it would cost them more troops than they have in the war so far. They cannot simply seize whatever they want, but they can wear down their Ukranian opponent with artillery superiority, drone superiority, air superiority, and a callous indifference to Chechen and convict lives when required.

    The danger is that as attritional and mobilisation arithmetic works its dismal magic, Ukraine could and probably will see its lines collapse either locally or in total, allowing Russia to take more of the Russiany bits of Ukraine. Of which lovely Odessa is an extremely juicy target for every reason you can think of.

    But now that we’re armchair generaling, nah, Russia was never going to do a Shit Normandy on the Black Sea Coast. That’s mental in today’s world where the drones will be dropping grenades in your landing craft, while the cruise missiles are en route, while you’re still miles away from the beaches. With green troops who’ve never done this before.

    Fuck that.

    The Russian army has been bled by Ukraine, but in this contest we also see that our tiny boutique eco-sensitive LGBTQ and feminist friendly #BLM militaries are comically inadequate to defend us. As indeed is the case.

    I am trying to soothe a fussy infant here at Chez Steve. Like Paul McCartney I hope she doesn’t grow up with war. We were lucky, weren’t we?

    Got to give ’em all we can ’til the war is won.
    Then will our work be done? (no)

  31. Since when do ‘brutal wars of aggression’ violate ‘international law’? They’ve pretty much been the norm since . . . forever. Every war is, by definition, a brutal war of aggression.

    Where is this written down? Who is the metagovernment that enforces this?

  32. >Bloke in North Dorset
    January 8, 2024 at 8:32 am

    >. . .

    >Reparations for wars of aggression are part of international law but only got settled after the event.

    But only if you lose. If you win there’re no reparations. Or if you’re the US. No reparations there, win or lose, either.

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