The Trouble With Sanctions

"We should privatize the sanctions against Iran by launching a worldwide divestment campaign," John McCain said in his AIPAC speech, "As more people, businesses, pension funds, and financial institutions across the world divest from companies doing business with Iran, the radical elite who run that country will become even more unpopular than they are already." And then down comes Sam Stein pointing out that McCain's top strategist Charlie Black has been lobbying on behalf of Iran-linked firms:

But, as demonstrated by the CNOOC anecdote, if choking off Tehran's economic lifeblood is McCain's goal, he could have personally started down that road years ago -- with his own advisers.

But beyond the narrow hypocrisy point, the real moral of the story here is just to remind us of the limited practicality of a sanctions and divestment approach to Iran. In a highly globalized economy, it's difficult to try to hermetically seal off Iran economically. You start divesting from firms that do business with Iran, but then you still have firms that do business with firms that do business with Iran. Divest all you like, but Iran still has oil that people want to buy, which gives Iranians money they want to use to buy things with. Which isn't to say that economic pressure is totally ineffective, but how effective it is has a lot to do with how wide the network of pressuring entities is. A really global sanctions and divestment campaign can deliver enormous blows, while unilateral measures are difficult to really enforce in a serious way.

This is one of several reasons why there needs to be a good-faith negotiations component to dealing with the Iranian nuclear program. On the one hand, we ought to recognize the limited utility of coercion alone in changing Iranian behavior. And on the other hand, as we seek coercive measures, or credible threats of coercion, we need to make the coercing coalition as broad as possible and to do that we need to be seen by world opinion as approaching this subject in a serious way. Ultimately, international consensus against the idea of an Iranian nuclear weapon is the only way to stop Iran from getting a nuclear weapon and to preserve and strengthen that consensus we need to act reasonably. Ideally, reasonable U.S. behavior will be met by reasonable Iranian behavior. If it's not, then reasonable U.S. behavior will set the stage for international cooperation that, unlike the all-bluster approach favored by conservatives, might actually accomplish something.