The Price of Power: How Economics Shapes the Ukraine-Russia-USA Triangle

28th February 2024

Beyond the battlefield, the Ukraine-Russia conflict is a test of economic endurance. Sanctions, military aid, and energy markets reveal how the USA and its allies wield finance as a weapon of war.

In the great geopolitical chess game of the 21st century, economic strength has become as decisive as military might. The Ukraine-Russia conflict, now entering its second full year, is not only a test of arms but of financial endurance, revealing the intricate interplay between sanctions, trade, and economic resilience. The United States, standing at the helm of the Western response, has utilised its economic clout in a manner reminiscent of Prospero from Shakespeare’s The Tempest, conjuring financial storms and embargoes with the flick of a bureaucratic wrist. But as in Shakespeare’s play, where power is wielded with unintended consequences, the question remains: does the magician control the storm, or does the storm ultimately control the magician?

Sanctions: A Double-Edged Sword

Since the onset of Russia’s invasion of Ukraine, the United States and its Western allies have employed an arsenal of economic sanctions designed to cripple Moscow’s war machine. Russian banks were severed from SWIFT, assets of oligarchs were frozen from London to Miami, and restrictions on oil exports were imposed in an effort to bleed the Kremlin’s war coffers dry. In theory, these measures should have forced Russia into economic submission. Yet, the Russian economy, though bruised, has not collapsed.

Much like the doomed yet defiant Faustus in Christopher Marlowe’s Doctor Faustus, Putin’s regime has sought alternative pacts to evade its grim fate. With China, India, and even some European nations still engaging in trade—albeit in more covert or roundabout ways—Russia has found ways to sustain its economy. The rouble, though volatile, has not crumbled, and the nation’s GDP contractions have been milder than many in the West predicted.

Meanwhile, the sanctions, rather than solely punishing Russia, have had a boomerang effect on Western economies. Energy prices soared in Europe, inflationary pressures mounted, and global supply chains suffered. The economic pain was not contained within the walls of the Kremlin, but spilled over into the homes of ordinary European and American citizens. A weapon designed to incapacitate one adversary has, in some ways, wounded the wielder as well.

The Economic Costs of Military Aid

The United States has poured tens of billions of dollars into Ukraine, funding military aid, reconstruction efforts, and economic support. The sheer scale of this financial commitment echoes Jonathan Swift’s Gulliver’s Travels, where the protagonist finds himself in the land of Brobdingnag, a realm of giants where everything is comically oversized. The level of financial support for Ukraine dwarfs anything seen in recent conflicts, and while some call it a necessary investment in global stability, others question the sustainability of such largesse.

For the US, the cost is not merely monetary—it is political. With every additional billion allocated, dissent grows within certain factions of Congress and the electorate. How long will the American public support funding a foreign war while domestic issues—rising debt, inflation, and economic inequality—loom ever larger? The echoes of the past whisper caution: from Vietnam to Afghanistan, prolonged conflicts, even those fought by proxy, have often eroded public patience and political will.

Energy Markets and the Shifting Sands of Economic Power

Energy remains at the heart of this economic battle. Russia, once the dominant energy supplier to Europe, has seen its traditional markets shrink. But instead of accepting economic defeat, it has pivoted towards Asia, selling oil at discounted rates to China and India, both of which have been more than willing buyers.

The West, in response, has scrambled for alternative energy sources, from ramping up liquefied natural gas (LNG) imports to fast-tracking renewable energy projects. The US, as the world’s leading LNG exporter, has stepped into the vacuum left by Russia, strengthening its own energy influence. Yet, as in The Mayor of Casterbridge by Thomas Hardy, where the protagonist’s fortunes rise and fall with cruel unpredictability, energy markets remain fickle, dictated by both geopolitical and economic undercurrents.

The Future: Economic Stalemate or Collapse?

What, then, is the endgame? Will economic attrition grind Russia’s war effort to a halt, or will the Kremlin’s resilience outlast Western patience? The answer is not yet clear. As the United States and its allies continue to supply Ukraine with economic and military aid, and as Russia seeks new economic lifelines, the conflict seems locked in a form of financial trench warfare, where victory is measured not in conquests but in who can outlast whom.

In Shakespeare’s Julius Caesar, Brutus justifies his actions by saying, “There is a tide in the affairs of men, which, taken at the flood, leads on to fortune.” The tide of this economic conflict has been rising for two years. The question remains—who will catch the tide at its height, and who will find themselves drowning?

The price of power is never merely paid in gold—it is paid in influence, stability, and the willingness to endure hardship. As the world watches this high-stakes economic battle unfold, one thing is certain: in the theatre of global finance, the cost of admission is steep, and the final act is yet to be written.