Why Obey Illegal Sanctions? The Way Out

Only the United Nations Security Council is authorized to interfere in the internal workings of a member nation through the application of sanctions to force it to obey UNSC resolution(s). Otherwise, it's illegal under the International Law agreed to by ALL UN members to interfere in a nation's internal workings, and that includes its economic activities. It also refers to international economic activities, which are a part of the state's internal workings.

The chronic abuser of this Law is the Outlaw US Empire and merits being disciplined by the UNSC for its unlawfulness; but with its veto, that can't be done so it's not even attempted. But that doesn't mean the Rest of the World (RoW) must obey those illegal sanctions. Indeed, the RoW has a duty not to obey them for they are illegal and very often immoral as we see with Cuba, Syria and elsewhere.

So, why do illegal sanctions gain traction? First, there're those nations who go along with the law breaking and often add their own illegal sanctions to those made by the Empire. Other nations obey out of fear that they'll be next. And as we've seen, strong nations get sanctioned because they don't obey. The illegal sanctions by the Empire and its vassals work because the Empire controls various choke points in the international economy—the SWIFT messaging system being the main one as we've seen, but there are others too. So, to do the right thing and disobey illegal sanctions, nations must have access to alternatives out of the reach of the Empire and its vassals. Slowly, these new institutions are being constructed, but despite their simplicity they are also complex because so many nations need to be plugged into them, and that takes time to arrange.

Pepe Escobar recently reported on the progress being made by Russia and Iran in developing their own SWIFT replacement. Something similar is ready to go between Russia and China, but China has cold feet because it's still too enmeshed with the Dollarzone to completely exit it at this time. However, there is another method that was introduced in 1944 that was recently put into action for the first time by Brazil and Argentina, and that's the use of what was initially called the bancor by its originator Sir John Maynard Keynes. The bancor is essentially a currency only for the use of central banks to facilitate trade between nations. Here's a short passage from a very recent discussion between geopolitical economists Michael Hudson and Radhika Desai on the bancor:

Earlier I had said that a national currency cannot be the world currency. Keynes knew that, and he arrived at the Bretton Woods conference with proposals for the bancor — not SDR, bancor — which is just the name he gave to this currency. The key thing about this currency was that it was not a currency you and I could use to buy a chocolate bar, [for instance]. It was a currency only to be used between central banks.

I think this kind of arrangement can be made on a bilateral, multilateral — many different types of — of basis. For example, the Argentine and Brazilian arrangement that has recently been made has been criticized by people who don’t know these sorts of things and say that it’s just a central bank currency, it can’t be worth much.

But no, money is national. Keynes understood this. What we need is a way of settling imbalances between central banks. That’s what world money needs to do primarily. We don’t need world money to pay for restaurant meals or buy a chocolate bar or shop for shoes or whatever. That money can remain national, and I think that that’s what Keynes understood.

Other nations ought to follow the example of Brazil and Argentina and form regional bancor groupings within already existing trade blocs like ASEAN, BRICS, EAEU, Mercosur, etc. Using those organizations will help to deal with another aspect needing to be solved as the RoW moves to an economic system totally divorced from the Outlaw US Empire and its Dollarzone as that's the only surefire way to circumvent illegal sanctions. To further examine the entire issue, I'm going to return to the above discussion between Hudson and Desai where Hudson digs into the gist:

The dollar is not going to be replaced [or] disappear. The dollar will remain the center of the American and the European trade. The problem is, what can take its place?

Well, what can take its place has to be a systemic answer. Any foreign currency is given value by being accepted as payment for debt or payment to the government. If the government accepts the currency, that creates a demand for the money that [the government itself] creates.

If the key is [that] you establish a currency’s value by taxes, [then] taxes are something that are political. In order to have a common currency, you need to have an intergovernmental arrangement or a political agreement on what the taxes will be paid for [and] who will receive the taxes.

It almost imposes a political union among the countries that are using a foreign currency, unless what they arrange is simply a group of bilateral swap agreements like Saudi Arabia is making with Russia and various countries are making with China. Or [if what they arrange is] a kind of artificial — something like Keynes’s proposal for Special Drawing Rights (SDR) — new alternative to the IMF that will create artificial currency.

The question is, how do you give this artificial currency a value outside of the countries that are using it?

You’re going to have two different — you can almost say two different civilizations, which is how Lavrov and Putin have been saying it. You’re going to have one part of the world — developing independently of the United States — with a mixed economy, basically moving towards socialism, and [for the other part of the world], the neoliberalized, financialized United States.

These will be rival political systems and really a whole different way of organizing the economy, politics, and values. That’s going to be much harder to put in place than simply doing a technical financial arrangement.

It was easy for countries to break away from the SWIFT bank clearing system, [especially since] the United States’s threats had given Russia and China time to put in place their own bank currency system, their own credit card system, [and] all of the financial details.

But to have the balance of debt between countries — when countries have an imbalance in trade and investment — [for instance, if] China is going to develop infrastructure all along the Belt and Road Initiative, other countries are not going to be able to pay immediately. Ultimately these equity investments that China is making will generate enough revenue to pay them off, but how are you going to handle this in currency — these mutual debts — in the interim?

That’s what has to be developed, and it’s a political question that most countries have not asked. [My Emphasis. All bracketed text original.]

Within the above noted international organizations and others, the dedollarization discussion has been ongoing for a number of years. Michael Hudson has noted for a decade or more that getting away from the dollar is the first step required for genuine sovereignty. And the ability to disobey illegal sanctions without incurring harm also requires genuine sovereignty AND solidarity with other likeminded nations, which at this point in time are the vast majority.

That majority has another tool at its disposal that few by themselves know exists—collective economic power over the Outlaw US Empire and its vassals. How is that possible I hear being asked? The Empire and its vassals have allowed Neoliberal Parasitism to deindustrialize and financialize their economies to the point where they are all geoeconomically dependent of the RoW, and they have no intention of spending the fortunes they've amassed to reindustrialize since the parasites are only a few percent of those nations's populations—and they don't give a damn about the remainder as the World Economic Forum and its kin have shown over the last decade plus. The way to employ that tool is to say to the sanctioning nations: If you want to trade with us, then you must drop your sanctions—no ifs, ands or buts. But again, for that tool to be effective and attain the goal of busting illegal sanctions, complete solidarity is required—NO Leaks.

I hear another question: But what about the debts owed by those nations; won't they be used against them? First and foremost, the vast majority of those IMF and World Bank debts are what's known as odious debt and ought to be repudiated. Another reply would be: You want us to pay our debt, then drop your illegal sanctions—Hardball. Most Dollarzone and Eurozone economies are in trouble and their troubles are rapidly deepening. That means the RoW has leverage now unlike all previous times before. Additionally, the West/NATO/Outlaw US Empire has displayed via its hybrid war against Russia in Ukraine that it's essentially a Paper Tiger with only unusable nukes. It really has no means to project power to enforce its sanctions or debt payments. Sure, it can try, but it will lose as every nation can afford carrier group killing missiles. And if you try to nuke the world, then you nuke yourself and all that wealth you stole. Zero-sum comes home to rest.

The goal began with the need to deep-six the illegal sanctions regime which requires the efforts of all RoW nations to resolve. Along the way, the current unethical, immoral international financial regime that enables the sanctions must be circumvented to the point of replacing it that will create a bifurcated trading regime that for the minority is totalitarian while the majority enjoys genuine democracy where all nations are equal regardless of size, prowess, etc., as the UN Charter extols. Eventually, the minority will slowly diminish as the benefits of becoming part of the majority will be plain to see. It will take decades but eventually the Outlaw US Empire will finally need to acquiesce because of its ever-growing dependency on RoW—its lack of hydrocarbons will be very evident by 2050 if not by 2040.

All the above is part of a worldwide effort to defeat an Outlaw Nuclear Power that's been a serial lawbreaker and Genocidalist for most of its existence. Its elite are certainly afflicted with Megalomania and Pleonexia and are thus a threat to global peace until they are subdued. IMO, the way to accomplish that is to slowly whittle its powers away from it via non-violent means if at all possible. But again to use the current unique opportunity, all RoW nations must stand together. For example, that means Saudi Arabia, UAE, Qatar, and Iran all standing together so they can all be free to allow their people to develop and advance. India standing with Pakistan. Colombia with South America. Africa with Zimbabwe. Myanmar with Eurasia. All these nations are in the same boat and must act together as one if they are to develop and advance their peoples and nations. It all begins with simply saying no to all illegal sanctions regardless the source, and in that way the Revolution Will Be Televised.