Another way to look at sanctions is that the government is helping coordinate many independent actors. I suspect that most of the people who have halted trading with Russia would have wanted to do so otherwise but would not have been able to because of market forces. The sanctions are the government’s way of saying “market forces are wrong here, all the independent actors can stop trading with Russia”, with the unfortunate side effect that some people are also being forced to not trade with Russia.
This is a purely hypothetical assumption, much like the theory of hypothetical consent as a justification for political authority. Needless to say, I’m not impressed with it.
It is true that in theory there is a coordination problem with sanctions because they are like taxes: the cost to a country of being sanctioned is second order in the magnitude of the sanctions being imposed. This means even an individual who cares about punishing Japan for its war in China can only impose second-order costs on Japan by his participation at the expense of a first-order cost to himself.
The problem is that there isn’t sufficient reason to believe in the real world that governments impose sanctions to solve coordination problems. Everyone can understand that Russian sanctions on foreign countries, such as blocking websites not cooperating with the Russian government or halting trade of various goods with European countries, are actually against the interests of individuals living in Russia. All I’m saying is that the same is true of most sanctions imposed by the United States government or any other government.
Another way to look at sanctions is that the government is helping coordinate many independent actors. I suspect that most of the people who have halted trading with Russia would have wanted to do so otherwise but would not have been able to because of market forces. The sanctions are the government’s way of saying “market forces are wrong here, all the independent actors can stop trading with Russia”, with the unfortunate side effect that some people are also being forced to not trade with Russia.
This is a purely hypothetical assumption, much like the theory of hypothetical consent as a justification for political authority. Needless to say, I’m not impressed with it.
It is true that in theory there is a coordination problem with sanctions because they are like taxes: the cost to a country of being sanctioned is second order in the magnitude of the sanctions being imposed. This means even an individual who cares about punishing Japan for its war in China can only impose second-order costs on Japan by his participation at the expense of a first-order cost to himself.
The problem is that there isn’t sufficient reason to believe in the real world that governments impose sanctions to solve coordination problems. Everyone can understand that Russian sanctions on foreign countries, such as blocking websites not cooperating with the Russian government or halting trade of various goods with European countries, are actually against the interests of individuals living in Russia. All I’m saying is that the same is true of most sanctions imposed by the United States government or any other government.