In the waning days of 1991, Robert Strauss, the senior Democratic operative just appointed by George Bush to be ambassador in Moscow, was asked whether he would advise U.S. businessmen to invest money in post-Soviet Russia.
"If I had $100,000 and I was your age," he told a young reporter, "I'd be damn interested in coming over here and investing that $100,000. If I had $10 million and I was your age, I'd be interested in coming over here and investing $100,000 of it."
With Washington’s encouragement, what looked like a good, if cautious, bet on Boris Yeltsin’s Russia, soured over the last three decades and most spectacularly following Vladimir Putin’s invasion of Ukraine.
Capital is a coward. Boosting Russia today, as Strauss did in 1991, is unthinkable — verging on the unpatriotic. Indeed, the Wall that Ronald Reagan so famously called out is now being resurrected by Western leaders busy picking out the drapes of a new sanctions-heavy Iron Curtain aimed at destroying the economic foundations of Putin’s rule.
The very same companies that led the charge in the halcyon days of old — like Shell, BP, and MacDonald’s — are now running for the exits, closing shops and factories, winding down businesses, and liquidating assets at bargain basement prices. Volkswagen, BMW and Toyota have stopped production in their Russian plants. Renault, the most dependent of major automakers on the Russian market, has remained silent. The French automaker has lost around a quarter of its market value in the wake of Russia's invasion of Ukraine and ensuing economic sanctions.
Boardrooms from London to Berlin and Seattle are abandoning, most probably irrevocably, the broad structure of economic engagement and strategic security built with such enthusiasm — and success — in the seven decades following Germany’s defeat in World War II. A tidal wave of economic and security estrangement is unfolding, feeding on its own energy — and without any plan to restore a working semblance of the status quo ante.
Economic globalization, especially after the demise of the Soviet Union and the death of Mao, was embraced by an enthusiastic and solid international economic consensus and secured by pan-European agreements on military security. An ideological superstructure domesticated and championed its virtues. Indeed, was not the facile MacDonald’s rule — that countries where the franchise operates do not wage war on each other — self-evident?
This system was by no means perfect, but it was difficult to argue that there were better alternatives to a postwar structure that proved flexible enough to peacefully accommodate the end of Communism and China’s rise.
But now this system is now dying a painful and disruptive death. And unlike the previous era of globalization and democratization, no one is claiming that battling Russia’s hostile military occupation on NATO’s border and lose-lose beggar thy neighbor actions defined and limited by economic sanctions, mark an improvement over the ancien regime, or promise better strategic and economic security than the system built on the ashes of Dresden and Hiroshima.
There is a chance, however small, that leaders will have the foresight and confidence to begin the tortuous process of constructing a new, consensual security architecture in Europe — and beyond. As the Russian advance into Ukraine continues, however, the prospects for such a happy ending grow dimmer.
As Biden sees it, "You have two options. Start a Third World War, go to war with Russia, physically. Or two, make sure that the country that acts so contrary to international law ends up paying a price for having done it."
There is a third option — revisiting a diplomatic engagement that accommodates everyone’s red lines. For Putin that means formal acknowledgement of Ukraine’s status as a neutral state and closing the door on further NATO enlargement in his backyard. For Zelensky, it means preserving Ukraine’s territorial unity and economic freedom.
Both Kiev and Moscow offer tepid encouragement to a parade of self-interested do-gooders hoping to serve as mediators to halt the fighting. Bilateral sessions offer better prospects, but Putin and Zelensky alike see value (at least they are not shutting anyone down) in giving a nod to the efforts of outsiders — from French president Macron to Turkey’s president Erdogan and Israeli prime minister Naftali Bennett — to encourage a trend favoring dialogue.
The wannabe mediators are themselves not disinterested parties. For Macron, who not too long ago announced that NATO was “brain dead” and is running for re-election, a diplomatic process in which he — and France — play an important part has self-evident advantages. Likewise for Erdogan and Bennett, each of whom has vital equities to protect in both warring capitals, and sees dialogue as a way of escaping the zero-sum costs of continuing warfare and American demands to side with Kiev.
Moscow understands their interests and their concerns only too well. In recent days, Russian media published a video of Russian military units patrolling the Syrian side of the Golan Heights. For the last two years Russian forces have been present along the Israeli-Syrian frontier — part of Russia’s extensive military role in Syria precipitated by the 2011 campaign against the regime of Syrian president Bashar al Assad.
Israel hardly needs to be reminded that it relies on Russia’s forbearance to maintain its air campaign in Syria against Iran and its proxies. However, just in case it does, the video showed Russian soldiers patrolling Israel’s Golan border wearing combat fatigues bearing the letter “Z” — the symbol of the military campaign in Ukraine.
The effort to mediate -- or even to be seen as mediating — is not without costs. Bennett ran into trouble in Kiev after it was reported that his offer of tough love was not welcome. Erdogan’s reliability as a NATO ally could suffer further if he makes good on his promise not to join the US-led economic isolation of Russia.
Meanwhile, the Biden administration has pointedly distanced itself from such mediation efforts as incompatible with its campaign of maximum pressure against Putin and Russia.
Apparently the administration sees more utility to engage in some realpolitik with the likes of Maduro’s Venezuela — and pursue a hybrid strategy somewhere between war with Moscow and punishment in pursuit of Russia's "strategic defeat." There may be good reasons to rethink the U.S. campaign to crush Maduro, but there has been no debate whatsoever in Washington defining exactly what the “strategic defeat” of Russia and Putin means, or the costs that it entails.
Volodymyr Zelensky may be the one who brings us all back to Earth. The deal now being discussed with growing enthusiasm in both capitals will not be as generous to Ukraine as the one on offer before the invasion and Russia’s rolling occupation of its neighbor. Zelensky and Putin alike will have to make hard choices on the Donbas, Crimea and the size and mission of Ukraine’s armed forces — indeed the very issues that Ukraine, Russia and the international community confronted before the war.
At its best, the global order and its array of multilateral institutions now passing from the scene offered agreed upon mechanisms for addressing, limiting, and resolving conflict. Perhaps a new, and improved order will emerge from the destruction in Ukraine. For all of his enthusiasm, Strauss, were he around today, would probably say, “Don’t bet on it.”
