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Yachts & War

Scott Galloway@profgalloway

Published on March 4, 2022

Capitalism gets a bad rap. It’s subject to weaponization by elites (cronyism), and the inequality it creates gives rise to caricatures of wealth as immoral and the wealthy as bad people. But this system has brought about more prosperity in the past century than any other force in the entirety of prior human experience. Capitalism encourages positive social behaviors, triggering self-preservation instincts that inspire cooperation.

As Yuval Noah Harari has written, what led to the human species commanding life on Earth was our proclivity to communicate and cooperate in large groups. Capitalism taps this: The tools we use to increase wealth — entrepreneurship, entering new markets, achieving scale — don’t work without collaboration. No war has ever been won, no company built, and no significant amount of wealth amassed without the help of allies. A businessperson who doesn’t build connective tissue within a company, throughout an industry, and across borders is much less likely to succeed.

This connective tissue creates leverage and exponential growth. The lifestyle wealth affords someone in 2022 is an order of magnitude more stunning and diverse than it was a generation ago. Wealth doesn’t get you a bigger TV to watch science fiction; it puts you in space. Wealthy people now don’t just live longer, they enjoy eight or nine more “disability-free” years than the poor. How society allocates the spoils of success is a worthwhile debate, but that’s another post. The reality, like it or not, is that being rich in the modern world is something people will (correctly) devote extraordinary effort and creativity to achieve and keep.

We’re obsessed with wealth not only because it’s scarce — more than half of the world’s adults have a net worth below $10,000 — but also because it can be taken away. Free markets are a form of democracy, and we vote with our dollars. Wealth creates a shield, but the material is penetrable. If your business is producing enemies, at some point they will come for you and your money. Dial it up to the national level, and your currency will collapse.

Dead Czar Walking

Fifty years ago, Czechoslovakia attempted to turn away from the USSR and gaze west. It liberalized restraints on the press and the arts and began to open its economy. The Soviets sent in 250,000 troops and 5,000 tanks, deposed the government, and imposed their own. Western nations protested but, unwilling to go to war with a nuclear power, they did nothing of substance, and the USSR incurred no penalty.

Vladimir Putin was 15 when those tanks rolled into Prague. One lesson he likely drew confirmed the upshot of every previous military confrontation: The side with the most armaments wins. However, things may be changing. The most powerful carrier squadron in the world today is the dollar, and it appears that the delta in traditional firepower may not be the sole determinant of the outcome.

What’s not on that chart? Eight days into the war, Russia’s currency has shed nearly 30% of its value. Within hours of tanks crossing Ukraine’s border, the U.S. pulled the plug on all financing to Russia. Soon after, the Western allies threatened to block Russia from the global Swift payment system and froze its central bank assets. And then … the unthinkable: Apple stopped selling iPhones in Russia. The supermajor oil companies are pulling up stakes, and Big Tech is banning Russian media outlets. Even soccer and kids’ movies have cut ties with Russia.


Everybody has a boss — even Putin. Two decades ago, he won over the public by promising to eliminate the oligarchy while covertly ensuring the protection of a select few. That meant the “decline of some oligarchs and the elevation of others,” and his job today is no different from when he took over: handling disputes and allocating resources among billionaires, GoT-style.

Similar to a medieval hamlet, the resources in question are almost always finite minerals. Roman Abramovich, who recommended Putin for office to his predecessor Boris Yeltsin, paid billions for political favors and protection fees for shares of Russia’s oil and aluminum. Oleg Deripaska, Putin’s “favorite industrialist” (who recently helped him launder money), was famously berated by the president on live television for not producing enough cement. More than half the nation’s billionaires sit on stockpiles of oil, gas, coal, or metal, and the 500 richest Russians own … 40% of the nation’s wealth. In no other country do billionaires control so large a share of the national economy.

Being a Russian elite 50 years ago was different. When Brezhnev sent tanks into Prague, his buddies weren’t worried about docking their yachts in the south of France. At most, wealth meant purchasing an abandoned castle off the coast of Leningrad. In 2022 it means flying to your 200-acre Aspen ranch in a Gulfstream 650ER. Also: having mansions in St. Tropez, St. Barts, Tel Aviv, Monte Carlo, and Kensington, three Central Park penthouses, a majority stake in a European football club, a Boeing 787-8 Dreamliner, and two 500-foot yachts. BTW, a fleet of the 20 largest Russian-owned luxury yachts is worth more than Ukraine’s defense budget.

“You may not be interested in war, but war is interested in you.”

—Leon Trotsky

The oligarchs will live and die by the Kremlin until they stop getting tables at Club 55. But the true crisis of allegiance begins when the Port de Saint-Tropez starts denying their boats from docking. Europe knows this: France is hunting oligarch-owned yachts for seizure, and the EU Commission has banned Russian aircraft (private jets included) from flying over the continent.

Forty-four of the 200 richest Russians do not live in Russia. The second-most popular place of residence for this cohort is London, where the 11th-richest Russian just relinquished his decades-long management of a Premier League football club and is looking for a buyer.


Putin shares common features with Amin, Gaddafi, and Hussein. Men in their sixties who became so insulated they could no longer read the label from inside the bottle. The connective tissue of capitalism is likely a feature Putin has underestimated.

The price of warfare is enormous. In addition to death and destruction in Ukraine, the price of fuel and grain will rise everywhere, putting additional pressure on poor nations. And then there’s the anxiety of knowing we’re only a few bad decisions by old men away from true horror.

The costs to Russia will be especially large. Its economy relies heavily on trade with other nations: Exports and imports account for 46% of GDP. That number is comparable to those of EU nations (which take pride in diplomacy with their trade partners), but dramatically larger than in other world powers (i.e., the U.S. and China). Two-thirds of Russia’s exports are oil and gas. The EU (which Ukraine is in the process of joining) is Russia’s largest trading partner. Almost all of Russia’s assets are held in foreign central banks. Put the pieces together, and you get an unstable economy unfit to make enemies.

Even if Russia attempted to operate independently, it wouldn’t get far. Despite controlling the world’s largest landmass and having one of the largest populations, Russia’s economic output is small. On a per-capita basis, Russia’s GDP is below the world average. Its total GDP is similarly unimpressive, a quarter of Japan’s.

Weapons of Mass Obstruction

Capitalism isn’t a cure-all for bad actors. And even in the case of sins on the scale of Russia’s invasion of Ukraine, there’s no guarantee of sustained cooperation by the majority of market participants. Saudi oligarchs find parking for their yachts despite MBS’s penchant for bone saws and wars of attrition. That said, if taking away soccer teams and Disney movies changes the course of history in Ukraine, the U.S. and the EU might reconsider their relationship with the sheikhs.

Maybe the best example of the power of capitalism’s connective tissue is the dog that hasn’t barked: I believe a key deterrent against China’s ambition to absorb Taiwan is the iPhone. An invasion by China may or may not risk a military response. (If we refuse to make Ukraine a no-fly zone, are we really going to land marines on beachheads along Taiwan’s southwestern plain?) But it warrants a capitalist response. The net effect of a Chinese invasion would be to sever ties with its partners, and Xi Jinping’s people would be angry if a quarter of their mobile phones switched off overnight. Even angrier if their economic miracle became sclerotic as supply chains rerouted.


If tanks are less effective in the face of capitalist’s connective tissue, what might be the kryptonite to the dollar’s superpowers? That was a clue. It’s crypto. Democratic rule (i.e., government control) over global systems of trade and commerce enables us to put sanctions in place. Crypto wants to evade them, and there will be new wind in the sails of Bitcoin as nations realize the problem with dependence on dollars held in Western banks: They’re yours until they’re not. Fortunately, crypto companies will abandon the decentralized mission when it matters. In response to Putin’s war, Binance, the world’s largest cryptocurrency exchange, is about to do the very thing it said it never would: block transactions. Viva la centralizatión.

All of this means life is shaping up to be lonely for Mr. Putin. He’s reportedly been in self-isolation since the pandemic began, and we’ve seen numerous photos of him sitting far away from other humans, appearing alone and disturbed. He can silo himself personally, but neither his wealth, his yacht, nor his nation will survive in isolation. Money is an addictive substance. The U.S. and Europe are the biggest dealers, and Russia has been using for several decades now.

Life is so rich,



  1. CA Nandkishor says:

    Dear Scott nice article on role of capitalism in progress of mankind visa vis it’s inevitable outcome of creating inequality .The threat you perceive for Putin and his likes is in the muscle power US and EU has in controlling world money /finances BUT thats what is the Key issue as possibly first time in modern history we all need to go to basic classroom to learn original definition of word and concept “MONEY” 😊And if it is really “generalised power to purchase “the pieces of present puzzle of Putin with support from his strategic partners gets a very different dimension to entire picture .
    Just imagine there exists a monetary world ” without dollar” as medium of exchange at international transaction level and you will recast the needs and greeds of few wealthy in the system .
    Surely I had nice time learning from your wisdom
    With regards

  2. From USA says:

    Pleasant reading for the uninformed, which as always will lead you down the wrong path.
    For a real analysls of what is happening in Russia, based upon the past thirty years as well as the present, read or watch (on YouTube) Professor Mearsheimer from the U. of Chicago. You will learn that US foreign policy has just pushed Russia into China’s hands, the worst fear of any great power in a tri-polar world.
    All of our economic weapons in large part will be neutered by China. A parallel Chinese SWIFT is already blossoming, and China is currently watching the crisis in Ukraine to neutralize future US financial weapons that will be used when it invades Taiwan.
    Putin is acting in his country’s best interests as he sees fit, wrong or right. We are acting in jewish neocon interests, not US interests. Neocon interests are ALWAYS in contradiction with US interests. Necon interests serve Israel or lining their own pockets or both.
    And if anyone labels me as an anti-semite, please, address the issues first. Jews never do….

    • Stop The Hate says:

      You had a few good points until you went into the boeymen of “jewish neocon interests” and use huge generalities instead of actual logic.

      1. “Neocon interests are ALWAYS in contradiction with US interests.”….ALWAYS? Really? No alignment, ever?
      2. “Necon interests serve Israel or lining their own pockets or both.” HMMM. Giving a lot of power to the Israeli lobby. The rest sounds like capitalism.

  3. Samuel says:

    Writing from Odessa, Ukraine.

    Economically speaking, Vlad is “buying” Ukraine at a very reasonable price -you just have to think long-term.

    He’s thinking about multi-generational value of obtaining the territory, not sanctions that will only last 50 years (or 10, most likely).

    I would love for you to do a long term analysis of the cost of this war to Russia. So what if this costs Russia X trillion dollars? How long will it take for that land to return the investment? Agriculture alone will be worth trillions in just a half generation, I would think.

    Your view is a typical American single-generation view, but I say that as a friend who truly respects so much of your thinking.

    I need to mention, as powerful as controlling the purse strings is, sanctions have done little or nothing to slow Vladimir. Trust me, I can hear the explosions and see families fleeing. I know money is “your thing,” but don’t let that inflate it’s power. This is a war of guns.

    Slava Ukraini,


  4. Stewart Pearson says:

    Scott, your defense of capitalism is feeble because without nuance. “The tools we use to increase wealth — entrepreneurship, entering new markets, achieving scale — don’t work without collaboration. No war has ever been won, no company built, and no significant amount of wealth amassed without the help of allies.” You are making the case for a social democracy. Can you not say so? Are you and Kara brave enough to have social democrats like Thomas Picketty, Paul Mason, and Yanis Varoufakis on your shows? What about trade unions and labor advocates? You celebrate the usual suspects: VC-funded entrepreneurs. What about the modern luddites?

  5. Chris Leach says:

    Brilliant article (again) with top drawer stats. Thanks for articulating what many of us were questioning and postulating in an amateurish way.

  6. Adrian Barnard says:

    Hope springs eternal eh?

    Meanwhile in Moscow…Sanctioned individuals wear the ignominy with pride in public, flaunting the penalty as proof of their closeness to Putin (who rules absolutely). In private they know they are a finger click from death, as are their families.

    As I say, hope springs eternal but Russian winters are famously bitter and long. And the road to hell is paved with good intentions. As much as I and I’d suggest most of us would like the world to be one where practical solutions and mutual self interest (as Scott writes lucidly of) assure peace and prosperity I see that the world is far from perfect. The article misses this, big time,. Without addressing Putin’s real power & his political nous and strength we continue to want pipe dreams and project onto others such good intentions.
    But I Iive in hope & hope for a swift end to the bloodshed and terror.

  7. Suzie Shaw says:

    Lol. I love that one of the data sources is ‘Yacht Bible’!

  8. Dario Eklund says:

    All makes sense Scott. From a “western perspective”. But to truly understand what is happening and why, I would strongly recommend to you/your readers to listen to this lecture by a former Finnish intelligence officer who spent most of his life in Russia/Soviet Union. We can’t apply our cultural logic on Russia and believe we can extrapolate to understand how they think or what their next geopolitical move will be.

  9. Nick Routley says:

    From the outside looking in, it doesn’t appear that the oligarchs have much leverage over Putin. Say every single one of them is unhappy with this invasion and all the havoc that’s been unleashed on them personally, what then?

  10. Kirill says:

    Quite interesting, Scott. Putin committed a war crime. But is it a sound response?
    Consider following:
    – when a company is creating the mess, you resign! This is ethical and right thing to do, still right?
    Russians are trying to evacuate their families out of new-style 1930-s Germany. They don’t want to have a 20 years jail term for their views and beliefs. Google Gulag! West decides to leave these folks behind. You fee, your assets were in Russia: No Visa, no Mastercard, ambiguity with crypto, max. $10k cash is what you got… and immigration attorneys want that money… Great job?;
    – No B1/B2 visa for Russians and Ukrainians, because of the war. Refugees visas takes years;
    – International media evacuated their personal. Quite understandable, who wants to spend 15 years in jail;
    That’s not a win for the West. Take refugees, don’t block MasterCard and Visa, don’t expel Russian students… otherwise Putin will waste their life’s in some innocent country.
    Where is principles? Gone with propaganda, just like in Russia?

    • Kirill says:

      You can’t choose parents and the country at birth. Remember? Government officials just forgot!

  11. Alexander Kurz says:

    “Free markets are a form of democracy, and we vote with our dollars.”

    One could turn this into “Free markets are a form of feudalism, and we vote with our dollars”. Indeed, in times of extreme wealth inequality, the oligarchs (=feudal lords) have much more power than everybody else.

  12. William Bell says:

    God this is such a cack-handed analysis of the situation Scott. Stick to social commentary. Geopolitics is very different from running a company and the capitalism you talk about doesnt actually exist except in your mind in the abstract. It’s countries and power that count. Putin knows this. You dont. Neither do many others schooled in doctrinaire capitalism. Prepare for your world view to be shaken. Putin is a murderous amoral bastard but he knows and understands much more than you or I.

  13. Pete says:

    Russia has always underperformed as a nation. Its system of government is flawed. Its economic output is anemic and its geography is poor (may get better with global warming). However, their military is formidable and they have nukes. A cornered Putin makes me concerned. Hopefully, the oligarchs will support regime change before Putin, in his deranged isolation, decides that a nuclear strike is worthwhile. God help us all.

  14. Aaron says:

    There is a huge overlook on people when they divide Russians in three groups: Putin, Russians in Russia and oligarchs.
    There are thousands of Russians living abroad with modest lives who get seriously impacted with all the restrictions.
    Funny thing is, someone like Garry Kasparov, who tried to play opposition to Putin and had to emigrate to other country, facing prison, would be affected by all the confiscations and legal problems. The infamous Navalny would be in the same situation, had he decided not to come back to Russia (to be imprisoned).

    The only thing oligarchs and Kasparov has in common? Both have multiple nationalities and might rely on their other personas. That is the problem in UK right now, they have problems applying real sanctions to citizens with a 100% valid English passport.

  15. Alexander Kurz says:

    “But this system has brought about more prosperity in the past century than any other force in the entirety of prior human experience.” Is this still true if one accounts for externalities like climate change, biodiversity loss, ecosystem breakdown etc? How would you quantify this? Or do you feel comfortable ignoring it?

    • QO says:

      It’s really not that complicated. Folks used to die in their thirties and fourties regularly because of easily treatable problems. Capitalism is the tool that made solutions to those easily treated problems scalable. We know what climate change is because of capitalism. And the Anthropocene age started long before capitalism.

      • Alexander Kurz says:

        I agree with you that capitalism improved medicine. That is on the positive side. All I am saying is that we also need to account for negative externalities. Don’t you agree with this?

        • QO says:

          I don’t think any of Scott’s analysis ignores those consequences, but for now, it’s the cost of doing business. There are lots of firms competing right now to win the right to save the world from the “negative externalities “ you cite, which underscores his overall argument

      • Dan says:

        Mate it wasn’t capitalism. That started in the late 1300s. It was the use of fossil fuels. Otherwise we would see a significant gap in life expectancy between Cuba and the USA, and we don’t. Fossil fuels provided us with the last 200 years of technology, not greed.

  16. Patricia Duncan says:

    Thank you for providing this perspective.

  17. Mike from Nebraska says:

    I’m all for heavy duty financial sanctions, but Russia isn’t Iran or other petrol states. Russia has a massive bureaucracy of very smart people who have learned how to skirt sanctions. Plus the top 100 oligarchs also know how to hide assets.

  18. @SteelNiner says:

    I think this is worth reading. I’m not sure I believe all of it, and it will take some “digestion time”. But the analysis is crisp and insightful. Try selling it to the Generals…they will determine our future. Like it or not.

  19. Angus MacDonald says:

    As an avid reader of all things Galloway, I find the joy of recognition, but surprise here at your lean-mean 100% Beyond BS assessment. I sincerely hope that this article finds it’s way onto the iPads of as many world leaders & bankers as possible, especially the buffoon Boris and his lamentably embroiled British government.

  20. Zorba says:

    Thank-you for the positive outlook here Prof. I cannot agree more. Invading countries is no longer the most lucrative action. Global trade is.

  21. Mark McCaffrey says:

    Yes, capitalism has a bad rap for good reasons…. but let’s be a little more nuanced between crony and techno capitalism on a grand scale and mom and pop entrepreneurs. One looks for or creates crisis in order to strip away natural or human capital through extraction of resources or rent, create monpolies and get rid of competition in the name of “free markets” (which are never free)…. whereas on a more local scale, folks are doing their best to serve their communities. Thank you for pointing out Roman Abramovich’s role in this quagmire: he hand selected Putin when he was living with Yeltsin in an apartment in the Kremlin in 1999 and yet claims he has no ties to Putin. He is clearly scambling now, claiming the sale of his properties will go to helping Ukrainians, and through his Jewish community ties (he is now an Israeli citizen) he’s been asked by Zelinsky to help broker peace. But, if he is able to have any sway on the situation, the connective tissue here is not capitalism but religious ties, humanity and survivability.

    Also, comparing Russian billionaire wealth with other nations however interesting also glosses over the deep inequality that in inherent in grand scale capitalism; the US federal reserve notes that as of Q3 2019, the top 10% of households in the United States held 70% of the country’s wealth, while the bottom 50% held 2%.

    And, by the way, the planet is on fire and fossil capital is largely to blame. As long as the capitalist investor philosophy of maximizing short term profits no matter what remains, fossil fuels will always be around since they have been and remain the golden goose that keeps on giving.

  22. BT says:

    Hello Scott – FYI (and with all due respect), Marines is always capitalized. Always “Marines”… never “marines.” Ooh-rah!

  23. XG says:

    Well said Professor.
    Just a slight correction, Ukraine is not yet in the process of joining EU. They would like to, they would like their application to be fast tracked but it would nevertheless take years. Furthermore their GDP is worth 25% of EU smallest (Romania), making this potential application very unlikely to succeed as it requires the unanimous consent of all EU members.

  24. Patty Brown says:

    Putin lives in another world. It is in the past and he is stuck there. China also has a hand in the past, but the other one is in the future. War is somewhat a relic of the past and unequal prosperity is in the now. War nor inequality will last into the future. The masses are weary of oligarchs in Russia and the US version called the 1%. Zoomers will force a shift. Capitalism may remain, but it will have a new brand that is more fair and more mission driven. Boomers will regret their alliance to Fox and all it represents as most will be unable to retire. Zoomers will not even consider that as an option, they will bring pensions and security back in vogue. America will prove republicans wrong, when employees will matter once again and the middle class will get a second chance.

  25. Vivek Srinivasan says:

    If you start out with the assumption that Capitalism has done good to the world it is a downhill ride from there.

    This war is because America is insecure about its place in the world. The EU had moved closer to Russia than to the US thanks to Trump and US needed Nordstream to halt.

    They effected regime change in 2014 which led to Crimea. This time it was about bringing Ukraine into NATO, which your president 15 months ago claimed useless.

    This is pushing Russia, India and China closer. The oligarchs might find other ports that they might start parking in.

  26. Svetlin Dimov says:

    For reference, the North Korean leadership survives well despite total sanctions and populace poverty. What makes you think Putin would care about sanctions if he doesn’t care about people and is well protected from oligarch coup?

  27. Freddy five and dime says:

    Crypto doesn’t need a custodian. Self custodied wallets are where this will all go. Binance and coinbase are for wimps.

  28. LE says:

    Agree. But you are missing the Art of the War. Have your friends close and your enemies closer. What are the implications of China.

  29. LE says:

    Agree. But you are missing the Art of the War. Have your friends close and your enemies closer. What ate the implications of China.

  30. jonathan F Gunter says:

    You don’t seem particularly concerned by Putin’s demo and threats of hyper-sonic missiles delivering nuclear weapons. Great power etiquette discourages such overt threats!

  31. David says:

    I think the Nordic countries have done a far better in organizing their society and striking a balance between capitalism and labor. I don’t the capitalists in the Nordic countries run the countries like they do in the United States which is a plutocracy.
    Part of the proof of this is that the Nordic countries have the happiest people in the world and the U.S. does not. (Just Google happiest people in the world.)

  32. Brian says:

    Oligarchs may need to dock and the Middle Kingdom may want their Apples, but Made in China 2025 seems on or even ahead of schedule if they too take what they see as theirs-Taiwan and its SMC. Ukraine is a trial balloon for the post war order and so far it seems the next one is likely to pop-up.

  33. Nouras says:

    I love your content but keep seeing the same mistake – you conflate assets (in this case yachts) with annual figures (defense budgets).

  34. Jeff says:

    and there it is

  35. Josh says:

    China and it’s perpetual gaze on Taiwan admittedly concern me a lot more than Ukraine if/when we’re talking about prospect of armed conflict between nuclear superpowers. Truth is, as much as Ukraine *symbolizes* the problematic and destructive echoes of the past in Europe vis a vis annex-happy dictators, the West doesn’t have nearly as much to lose economically in Ukraine (indeed, Europe has more to lose by shutting out Russian energy imports, as we’re all now well aware).

    Conversely, the West and the US in particular has *a lot* to lose in Taiwan, both in terms of physical capital/means of production as well as intellectual property sitting on the island; the amount of extra-spicy, industry-leading American tech from the likes of Apple, AMD, NVidia, etc. (not to mention Britain’s ARM) saddled up at Foxconn and TSMC alone is enough to make my eyes water, and taken as a whole, what we’re essentially talking about is the future of computing for the entire world — just another tantalizing prize for the taking should “reunification” of China become priority number one for the CPC. And, if anyone had doubts about how Taiwan’s movers and shakers feel regarding the prospects of such an invasion, well, there’s definitely a reason TSMC’s latest and greatest chip fab is being built in Arizona and not a Taipei suburb, and it’s not for the mild winters…

    Which is all just to say, Russia’s invasion of Ukraine is very concerning, and the test of sanctions as a real, weaponized alternative to armed conflict therein deserves special attention. Still, I’m not sure what we learn there would/will hold true in a China v. Taiwan matchup.

  36. Brian says:

    Always enjoy the “dogs” perspective. BUT…there is only one metric that truly matters here; do sanctions, restrictions etc. stop the war on Ukraine or just bring misery to the people of Russia and likely many in the rest of the world.

  37. solofo says:

    excellent analysis

  38. Sharon says:


  39. Wendy says:

    Thoroughly enjoyable read- a great astute, knowledgeable, insightful, and simple to understand explanation of the current situation with n Russian- I am not an expert in anything- but what you wrote made perfectly good and clear sense- loved the phrase about Putin’s a bottle and can’t read the label – not sure if that’s really correct as he is after all privy to so much going on within his own country and the world at large- isn’t he?? I do believe that capitalism without restrictions is not a good thing – it’s the other end of the spectrum of communism – meaning a few control the many in both cases. People rebel in the best way they know—interesting how tech is being used to manipulate circumstances – good and bad. But as long as people want to fight for whatever reason there will be fighting (live by the sword, die by the sword). Seems like it n this world There will always be the menders and the destroyers – it’s true on my block, in my state, in my country and in the world— how to stop the criminals and war-mongers (they are the same thing)? I suggest arrest them and put them where they can’t hurt anyone. P.S War really should be obsolete by now. All bad deeds whether local or global should be looked at as a criminal matter and Keep the innocents out of it as much as possible.

  40. dallasboiler says:

    I’m generally all for economic sanctions that the West can apply here to get Putin to pull back his troops or incentivize the Russian Army and its citizens to change their leadership. However, a couple of these economic responses are troubling to me.

    1) Blocking foreign currency reserves — doesn’t this just incentivize all nations to heavily reconsider how my $USD currency they accept and hold? I doubt anybody would be more comfortable switching to Yuan after watching China strong-arm its private sector, but losing reserve currency status for the $USD could be a long-term very costly event for the U.S. This action seems like a catalyst.

    2) Seizing private property. Nobody (except the oligarchs) is going to shed a tear for the oligarchs losing their yachts. But, does this set a dangerous standard regarding property seizure? It’s not a good look with governments take folks property without due process. U.S. citizens would be enraged if the Russian or Chinese governments seized our citizens’ overseas assets in protest of our support for causes (Ukraine, Taiwan, etc.) that they didn’t agree with. I could get more comfortable with confiscating the assets until the issue is resolved, but seizing them and voiding the owners title to those assets seems like it’s giving a lot of fodder for those out there who argue for smaller gov’t institutions and authority.

    • XG says:

      Regarding your #1, as of a year ago, Russia had already decreased substantially their US$ holdings in favor of € (around 30%), £ (around 6%) , Yuan (around 13%) and gold (around 23%) since 2014. US$ accounted for roughly 21%.
      Regarding #2, there is a big difference between freezing assets (which EU and US have started to do) and seizing them. We’re not there as it requires a legal order from courts to to the latter

  41. Devendra Tripathi says:

    “All of this means life is shaping up to be lonely for Mr. Putin”, I fully agree and wish the same. What I am worried is that he will do great damage to people before he loses the command.

  42. Jon says:

    You are dead-on in your economic assessment. But your article lacks any perspective regarding the grave harm that that capitalism has caused. The rich keep finding ways to get richer, and the non-rich continue to suffer with every cycle. This is an error of omission that someone of your obvious intelligence should not have made and I sincerely hope that it was not deliberate.

    And Crypto. “Viva la centralizatión” here is nothing short of a declaration of war. It’s a technophile’s wet dream in this context, ignoring reality and rendering populations as abstract variables in some fantasy algorithm. Noble aspirations? Irrelevant. The damage to the world incurred by a centralized financial authority with the power to create and enforce global financial policy, and that uses Zuck’s lovely model of Moving Fast And Breaking Things, is incalculable.

    Changing the “way we do things” is all well and good until people are starving and being bombed to oblivion. Imagining naively that some tech innovation at the scale and scope possible today will magically change the way humans are – it dissolves the line between disruption and sociopathy.

    I’ll leave it up to the reader to find many examples already inflicted upon the world, as that’s a trivial exercise.

    Final thought re: all the above: Blindly driving revolutionary innovation with horrific near term consequences, yet long-term benefits, is who we are. It’s like ripping off Band-Aids. Pain now to avoid even more pain in the future.

    After all, one can’t make an omelet without breaking ~8 billion eggs.

    • Wendy says:

      Yes yes and yes again Re your assessment of a central crypto currency system! It’s not the solution at all -what is that word? Hacker/hackers/ hacking? digital money systems are made to me manipulated! Arrrggg – no thank you. We really need to skim the cream off the past and utilize systems that are immune to digital hacking or manipulation. I, and I am certain most of the current population, does not want to go the way of crypto. Let’s think of something better, more fail-safe or else go back to having printed money only.

    • Phillip Soltan says:

      Capitalism is like cars. It works great as long as there are speed limits and traffic lights. What appears to be failures of Capitalism is actually failures of government to manage Capitalism in a responsible way. The money that goes to congressmen and presidents in the US makes our government ineffective at restraining the abuses of the Capitalist system. Anyone that thinks there is a better economic system than Capitalism doesn’t know any history. The problem is that Capitalism is great at giving us what we want and terrible at giving us what we need. The government is supposed to ensure that the citizens get what they need. Corporations are chartered for greed but they also follow the law. A business that constantly breaks the law is not sustainable. Democracy in the US is broken and is what is keeping people from getting what they need. Eventually, Democracy will either catch up to the problems or we are all doomed no matter what economic system we have.

  43. John says:

    There are powerful economic forces at work to counter the long-held goal of rebuilding one person’s “homeland.” The West needs to stay the course as this economic pressure won’t resolve the matter tomorrow. But it can bring about the resolution.

  44. Varun Khanna says:

    The question is how to make money in a country where a high percentage of gdp is owned by few people! Is there a way to break the chain!

  45. Richard Nagel says:

    The oligarchs are no threat to Putin; they are his creatures,not the reverse. Although the oligarchs have considerable wealth outside Russia, the bulk of it consists of equity positions in major publicly-held Russian companies which they cannot sell and which can be seized by the Kremlin. That was the case with Khordoksky and Gasprom. Read “Putin’s People” for more on this matter written by the former Moscow correspondent for the FT who, along with her publisher, were recently sued by some of the oligarchs whose corruption was written about in the book. Also, the figures bandied about in the US media about Russia’s total and per capita GDP are misleading since they are based on current exchange rates rather than the more accurate purchasing power parity formula. Lastly, Russia is not a technological Pygmy as is so often noted in the U.S. media, at least when it comes to armaments and space vehicles. In that regard, just read recent U.S. DOD assessments of said technology.

    • Patricio Cavalli says:

      Great post, except for one little grammar issue: centralization is written “ centralización” in spanish. The correct sentence would be “Viva la centralización“. I might not be adding much in this complex, horrible moment, but those are my two cents. Life is indeed so rich.

  46. Marcel Dragna says:

    You’re usually fun, interesting and compelling but you’re dead dog ignorant as to geopolitics; stop it. You’re making a fool of yourself.

    • John B says:

      I don’t know at all, so I can say: please explain in what ways you disagree if you want your comment to be meaningful to anyone.

    • Amina Rassel says:

      Absolutely agree. Where is any word in this article of USA involving in this conflict?

  47. Kev says:

    Nice analysis. However, India, Pakistan and PRC are all buying oil and wheat from Russia. All at levels to compensate for sanctions. The ALT SWIFT system China and Russia use processes payments. Capitalism at work, against the system attempting to block their growth & profit…. works both ways.

  48. John J says:

    Nice rundown on cost of war from the Russian side. How about from the EU side. What will it do to their economies if they have to harbour 2-15 millin refugees for x? years. What happens to their economies if they do cut off russian oil and gas?

  49. Gieo says:

    I concur that capitalism is the best system… so far. The current disparities in wealth are eroding belief in the system. Something must change or the cooperation that all systems depend on will evaporate

  50. Rok says:

    Hi Scott, the ultimate “everybody has a boss” statement is “even Pope”. You may copy anytime, not TM here.

  51. Mark White says:

    “Viva la centralizatión.” You think this is good for developing countries, seems to advocate global ‘corporcracy’…

  52. Michael from MD says:

    I do wonder if this war promotes the Remimbi as a reserve currency.

  53. Michael from MD says:

    Wow. A clinical decapitation. Even might Vlad can’t live without the network.

  54. David Sorensen says:

    Excellent observations. Now do major league baseball.

  55. Dav says:

    Strong post.

  56. Greta says:

    Why do the US and Europe still import oil and gas from Russia, lining Putin and oligarchs’ pockets to this day? Because they went woke with ESG and cut their own energy production before green energy could fill the gap. Doesn’t take a genius strategy professor to figure that one out 😉

  57. Xander Tang says:

    A fantastic article except for that typo about China invading itself – not in the political, Taiwan not a country sense, but the confusing line of “an invasion OF China” instead of “invasion BY China”. Life is indeed rich 🙂

  58. Spider says:

    While the west is high on sanctions, the 2nd half of Newton’s 3rd Law (……an equal and opposite reaction) has yet to be seen, AND will be determined by a host of unsavory old men running countries with a violent, unstable, anti human rights ect record. While we remain cautiously optimistic, we must remain vigilant to NOT “leon lett” the matter.

  59. Lucidamente says:

    “Capitalism encourages positive social behaviors, triggering self-preservation instincts that inspire cooperation.”

    Here’s one for the bookshelf: Albert O. Hirschman, _The Passions and the Interests: Political Arguments for Capitalism before Its Triumph_

  60. Alex says:

    All good points. But what happens when China and India, two of the Top 5 holders of US dollar foreign reserves see that with the wave of a hand Russia (another top 5er) had its reserves frozen? Why wouldn’t they feel the implied threat and abandon the Petrodollar system? We flex our dollar now, but perhaps the sun is setting on the Global American Empire.

    • Mark White says:

      I find this argument re: the US $ or $s in general very interesting, especially as I have heard credible arguments about this before the recent invasion and sanctions… noting in contrast the disturbing comment about crypto and centrallisation…

  61. Cyril says:

    Human beings don’t deserve this planet.

  62. Yuri Bez says:

    The merging of state and corporate powers is the definition of fascism. Mingling woke cancel culture with capitalism results in a social credit system where elites can destroy livelihoods at will. Perhaps you should write about how the Canadian government used a war declaration to silence dissent and seize its own citizens’ assets. Or talk to a history professor. Woke Inc is a good book about this topic.

    • Bruce The Blog says:

      Fascinating how people who want to hew to old and calcified mores complain about awareness of the new by labeling it with the ironic, newly-coined invective of “woke” — ironic because they place greater value in remaining unwoke, which is to say, asleep. As for the hoary epithet of “cancel culture,” it’s laughably obvious by now that those quickest to condemn it only do so when it’s their culture called into question. Yet they seem to have no problem rushing (even legislating) to cancel the culture of ethnicities or gender identities or lifestyle practices that they are too craven to tolerate.

      • Bruce The Boomer says:

        No one is canceling the culture of ethnicities or gender identities. However, they do not appreciate being smeared by people like you as -ists and -phobes if they push back against politicized school curriculums and biological men destroying women in sports. Your NPC Resistance Karen virtue signaling lacks any nuance.

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