The capitalist free-market system rests on three pillars: the sanctity of contracts, inviolability of private property, and trust in the banking system. Economic sanctions imposed on Russia led to the abrogation of existing contracts, expropriation of Russian companies’ properties, and freezing Russia’s government assets and bank accounts. Moscow reciprocated by expropriating foreign assets on Russian territory. The economic war triggered the collapse of the established exchange of goods and services. The stability and solidity of the capitalist system reliant on economic interdependence dissipated and were replaced by black markets.
Inefficiencies of the black markets caused commodity prices to skyrocket, devastatingly impacting the world economy, especially in Europe. Inflation and shortages, including food, may erupt in political upheavals. The ability of capitalism to create wealth, which is its purpose, was significantly impaired. Its grit and resilience are about to be tested.
Since economic freedom is inextricably tied to democracy, the sanctions not only wrecked the pillars of capitalism, but also violated the fundamental principles of our democracy. Free-market democracy, which in the wake of the Soviet Union’s collapse proclaimed itself the most viable alternative to communism, in a dramatic reversal of history, adopted attributes of communism thirty years later.
In a striking resemblance to the Bolsheviks’ tactic, President Biden, in his 2022 State of the Union address, announced, “[W]e are joining with European allies to find and seize their [Russian oligarchs’] yachts, their luxury apartments, their private jets.”
Ironically, most are Jews, but there are Armenians, Azerbaijanis, Uzbeks, and a few Russians. They have in common that they do not live in Russia; their assets are outside Russia, and they are rich. Some E.U. countries are canceling Schengen visas and banning Russian citizens from entering the E.U. in violation of E.U. law that explicitly prohibits a blanket citizen-based ban.
From Bloomberg Law:
As of March 10, Biden declared the situation an emergency. President Obama declared such an emergency in 2014 after Russia’s annexation of Crimea. The emergency order has been amended and expanded several times and these orders have provided the basis for OFAC’s designation of various Russian oligarchs and politically exposed persons (PEP’s) as specially designated nationals (SDNs).
When someone is designated an SDN, all of their property, including property belonging to entities in which they own a 50% or more interest, is “blocked.” The SDN need not be criminally charged or convicted and the property need not have any connection to the reasons for the designation.
And there is the First Amendment. Although we have witnessed numerous violations during the last two years, this one is probably the most blatant and egregious. By an ironic twist of fate, 40–50 years after fleeing communist tyranny, former Soviet immigrants discovered the Soviet style of censorship in America. Yes, “the land of the free,” in a brazen display of tyranny and lawlessness, is blocking the Russian news service Russia Today (RT) because it is “spreading lies promoting pro-Kremlin narratives.” Indeed, that was the reason the Soviets used to jam Voice of America and other Western broadcast services: because they broadcasted the “Western lies.” At the time, the United States accused the Soviet Union of being afraid of the truth. Disgracefully, the United States performs a “reverse Soviet Union.”
Ayn Rand in Atlas Shrugged wrote, “The truth is not for all men, but only for those who seek it.” And those who seek it continue getting alternative news using the internet and other means, just like the Soviet citizens who used all means at their disposal to seek the truth from Voice of America.
Paradoxically, American liberals, who for two centuries have defended this country’s economic and political order built on the inviolability of private property, fought for the freedom of speech, and upheld the rule of law, do not condemn the expropriation or censorship; they enthusiastically support them.
It is no coincidence that neither “The Most Trusted Name in News” nor “America’s #1 News Source,” nor any other network, covers the assault on capitalism and democracy. Thanks to the fatuity of the American public, Americans do not grant the greatest interest and highest importance to the ideological transformation of the country. As a consequence, with the process of transformation proceeding unabated, our economy dented, democracy faltered, and the rule of law is under duress.
When an existing order is fundamentally altered, a new order must emerge as a product of perpetual evolution. The emerging new order has the characteristics of Soviet-type totalitarian socialism.