Unintended Consequences of Trade Sanctions - Jonathan M. Finegold Catalan - Mises Daily

Unintended Consequences of Trade Sanctions - Jonathan M. Finegold Catalan - Mises Daily: "Trade sanctions are meant to destabilize regimes, forcing them to compromise with the aggressing government. Sanctions do this by threatening the regime's survivability, by undermining any support it may have amongst the population. These are the intentions of the American government, supposedly as a result of Iran's 'dangerous' nuclear program. (Ironically, sanctions may only increase the country's ambitions to become a nuclear power, as a weapons-starved Iran turns to the nuclear warhead as the only means to ward off American political aggression). Additionally, and tragically, despite American intentions, the more likely outcome is the unintended effect of pushing Iranians toward their government and undermining an otherwise growing local antiextremist movement.

By definition, trade sanctions regulate exchange between Iranians and foreigners. Therefore, these individuals are directly punished by trade sanctions, not their respective governments. Those whose businesses rely on the import of foreign material are now forced out of the market. The thousands of individuals who live off of cheap, imported foodstuffs are now barred from doing so. This leads to impoverishment by forcing them to pay much higher domestic prices for less food. Thus, trade sanctions may also lead to outright mass starvation, as they did in the case of Iraq."

"in a country where people's accumulated wealth is threatened by trade restrictions, government aid may be the only recourse left. Ahmadinejad's government is likely more than happy to win people over by aiding those harmed by American trade sanctions. Furthermore, the Tehran government is probably thrilled to use American-led trade sanctions to vilify the West and legitimize its own power."

"A relatively wealthy Iranian population is less likely to support a local government bent on creating tension with other world governments, as this would create the potential of a threat to that accumulated wealth. Furthermore, an Iranian population unperturbed by foreign restrictions on their ability to produce can then shift the blame of continued poverty onto the local regime. It goes without saying that without foreign intervention, the local government will find it difficult to point the finger elsewhere."