Why Economic Sanctions Are Causing Major Problems in Russia (and Elsewhere)

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Sanctions have been a major component of the West's response to Russia's invasion of Ukraine, and they are quietly a key part of Israel's policy regarding Hamas. But how exactly do they squeeze the opponent? This video looks at three aspects of sanctions strategy: military production, general economic welfare, and humanitarian exceptions. We will see that targeting military production is even more effective than it seems because it induces the target to reroute its budget away from the military. General economic welfare can be effective too, but it is inefficient because it also decreases social spending. Finally, humanitarian exceptions have a nasty tendency to free up funds for military purposes, no matter how well-intentioned the policy.
0:00 The Growing Popularity of Economic Sanctions
2:37 Types of Economic Sanctions
7:13 Preview of Key Takeaways
9:00 How State Budgets Work, Simplified
15:16 The Benefits of Reducing Military Capacity
18:33 Slashing the Target's Economy
20:22 The Problems with Humanitarian Exceptions
28:00 How Humanitarian Exceptions Can Work
31:20 What Have We Learned Today?
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[@TKUA11]

There’s a joke in Russia: when an alcoholic loses money, his son asks him, does that mean you will drink less? No son it means you will eat less

[@richarddarcy6945]

It is amazing that military spending can be manipulated so dramatically by sanctioning small advanced chip technologies.

[@jeffbenton6183]

This reminds me of something I read about strategic bombing in WWII. Some advisors to the US Army Air Corps ran a study before the war to determine which thing would grind a hypothetical US war economy to a halt (since they couldn't study how to defeat a foreign nation, for diplomatic reasons). The answer they came up with was ball bearings - so ball bearing factories are what the bombers went after in Germany (I think they later found from experience that targeting oil infrastructure was more effective). EDIT: Re-reading this, I realized I should clarify that the US was in no danger an enemy launching a strategic bombing campaign against it. Even the Brits expected to lose Canada very quickly in a war with the US, and there was no way anyone was getting a bomber all the way across the Atlantic.

[@hydrolifetech7911]

​@@jeffbenton6183'ball bearings' and 'grinding to a halt' has me chuckling because of the mental vision of worn bearings making vehicles grind to a halt. I know! I am simple that way. Anyway, it's true that without ball bearings, no mechanical machine moves.

[@jeffbenton6183]

@@hydrolifetech7911 It's always fun to learn that I made the perfect pun by accident, thanks!

[@johnluiten3686]

And yet, three months later, Avdiivka falls and last week, the CIA reveals its treachery in Ukraine while all fronts crumble to Russian advances. Yep, keep playing with the number in your mathematical fantasy land. You’ll have Russia at the peace table soon. ;-)

[@vintagehome-777]

Good, You understood. Good boy!

[@me0101001000]

Let me share a really cool analogy that I came up with based on studying bees. The Japanese giant hornet preys on honeybees often. As a countermeasure, Japanese honeybees will dogpile, or in this case, beepile the hornet and vibrate in a manner to quite literally cook the hornet alive. This obviously hurts the bees, since the temperature reaches near the upper temperatures they can survive at, but it is beyond the threshold of the hornet, and it usually dies. I view sanctions as an attempt to cook the economy and society of the target nation alive. The sanctioning nations will most likely feel some suffering, but the target of the sanctions will without a doubt suffer the most.

[@theorixlux2605]

Mmmm fungible honey

[@DiamondKingStudios]

I remember when the news got into a frenzy when some of those hornets appeared in the Pacific Northwest here in the US. If only our bees could figure out that sort of thing.

[@jeffScotty]

Yes!! Absolutely fabulous analogy. I was astonished at that hornet killing adaptation.

[@ro.7427]

Bee analogies are always appreciated.

[@FernandoMartinez-uq1qb]

😊

[@evilmountain7147]

I’m a computer science major who focuses a lot on AI/ML and data science, and I’ll be graduating next spring. I’m hoping to go into the intelligence field in some capacity. I’m listening to this video as I walk out of a class on differential equations - the back 2/3 of this video is the stuff I live for. So while he’s apologizing about numbers, I’m watching like “now this is where the fun REALLY begins” 😂😂 …also, my name is William

[@Gametheory101]

I see that your parents also have very good taste.

[@jamessparks623]

Same boat as you. Graduated 2 years ago. Best of luck in your career m8

[@disturbingdevelopment4308]

What, they called him "evil"?@@Gametheory101

[@CATDRL2]

I can relate. I was an Economics major who switched to Computer Science. For the same reason, I can consume these videos as quickly as William can release them. I wish I had William's videos when I was in higher education. ...also my name is not Williams.

[@SukacitaYeremia]

@@Gametheory101 *OH!* Now I get it!

[@GojiMet86]

I'd like to add that Sanctions also need to be used sparingly. You don't want to sanction the living daylights out of every country you don't like, because all that'll do is make a second, global economy where all sanctioned countries still wind up doing business with each other.

[@GhostEmblem]

That depends on how effect your blockade(s) can be.

[@aickavon]

It’s already happening and it has hilarious effects. Russia was a big country with a solid economy. They had options with India and China, but thanks to sanctions these options are super limited and both India and China are very careful about avoiding harder hitting sanctions. Basically, there is a ‘second economy’ and it’s lost because it’s been shot in both knees from the starting line.

[@Moses_VII]

​@@GhostEmblemShips aren't being sent to stop trade anywhere, so there are no blockades

[@TheKakan1337]

I'd like to add Russia's economy makes up 0.2% of the world. I think we're fine with them making their own global economy with Monopoly money.

[@Moses_VII]

​@@winston6369They don't need high tech. Vietnam, Taliban, and Yemen prove that civilisation can be defeated by the illiterate and barefooted.

[@johnathandoe7079]

Putting the fun back into fungible!

[@ElMoonLite]

I love how your voice perfectly matches the subject. In general, it sounds monotone and dull on the surface, but you sparingly put the inflections and accents in just the right spots to put extra focus there. Or to make a pun stand out, to keep us entertained and interested. Also somehow the tone of your voice makes me think you are genuinely smiling, and daresay I can hear you smile even more at some points. You clearly love the subject. All in all, well done, very well done. All teachers should envy this. Oh and it's not just presentation, the subject matter itself is also top notch, but that gets a lot of positive comments already. And all this counts for most videos, not just this specific video. Sorry, did not intend to sound like a fanboy, but after following many of your videos I just felt I had to comment this at some point.

[@busshock]

Speaking as someone who hasn't done more complex math than division since high school, this was surprisingly easy to follow, well done.

[@baltulielkungsgunarsmiezis9714]

There is no complex math here.

[@eeekkk34235]

Yes, he's keeping it simple. Usually calculus would be used for these calculations. (He briefly flashed the first and second order conditions for a function with diminishing marginal returns.) Also, this is the reason for the reference to Newton & Leibniz, both of whom independently invented calculus.

[@NmaeUnavailablesigh]

Something I've noticed, sanctions on a country's exports tend to be for political grandstanding, sanctions on a country's imports tend to be more serious Because consumption of most products is spread across the world, it's fairly easy to find new buyers, whereas production of a particular product is often concentrated into very few countries, so if all of those are on board with the sanctions it can be very difficult to source alternatives

[@JABN97]

Depends on the specific product. Bulk goods like rice, grain, iron or fabric are spread out. Others, like advanced jet engines, are very very concentrated. So I’d it’s more based on the concentration of the product, then import / export. In other words: cutting of Russia from US machine parts is worthless. Cutting of Russia from Taiwanese chips has impact. Cutting of EU import of Russian grain is grandstanding. Cutting of EU import of all Russian gas is serious. Russia can sell its grain everywhere else, and can buy machine parts from many others. But the super advanced chips they can’t get anywhere but Taiwan, and their gas infrastructure is completely designed around pipelines to cheaply transport gas to rich EU buyers, so selling to alternative buyers means both lower prices and has much higher transport costs, leaving little in the way of profits

[@hydrolifetech7911]

​@@JABN97some machines(and their parts) needed for precision manufacturing needed in say weapons productions can only be sourced from very few companies in the West and in Japan. The West can effectively sanction those too to be barred from export to Russia

[@danielhale1]

Fungible was a legitimate and useful word before the NFT scam hit, and fungible will be around long after they are forgotten. Thank you for this really solid explanation of sanctions challenges!

[@GummieI]

It is sad how such a fad can corrupt a word like that though, for a lot of people not Fungible will be associated with NFT's sadly

[@alexpotts6520]

The ironic thing about NFTs is that actually they are pretty bloody fungible. One stupid jpeg of a monkey is just as valuable as any other.

[@neurofiedyamato8763]

@@alexpotts6520 NFTs is technically not fungible. Its a unique encryption key, so its non-fungible. The scam lies in the fact that the encryption key is for a fungible jpeg. A good analogy is to think of a safe with a unique passcode, but its locking behind a $1 dollar bill. The passcode is non-fungible but the thing you use it for(the dollar) is very much fungible. The problem with this is that a safe that is securing nothing has no value no matter how non-fungible it is. But at the same time, if it is protecting a single dollar, its not worth very much either. So the NFT is only as valuable as the thing it is securing. The scam is using NFTs to inflate the value of something (the jpeg) that doesn't actually worth very much. Like a house, having a good home security system does not change the value of the property, it just makes it harder for others to steal it. That's all NFTs is supposed to do, make it harder for someone to steal something. But when its a mass produced JPEG, there is no reason to use complex encryption to protect it, but here we are.

[@danielhale1]

@@alexpotts6520 lol yea, it turns out 0 or near-zero makes them pretty dang interchangeable :D

[@DiamondKingStudios]

@@danielhale1and this is why I don’t much like markets as based on speculation as NFTs. Or probably art for that matter.

[@martingrzanna2005]

I read your book about the causes of the war atm. I read every sentence with your voice in my head. I guess I am kinda conditioned on the voice of your videos 😂

[@poorlycutfry7272]

Would you ever do a video on Ethiopia’s recent demands about sea access from neighbouring countries? Seems like a good lines on maps kind of question

[@rjfaber1991]

I reckon it'll end with Somaliland giving Ethiopia sea access in return for official recognition.

[@binbows2258]

@@rjfaber1991 I wonder if it would be possible for Ethiopia to just annex Somalia. Probably not worth it. But I bet they could do it! Maybe.

[@plsdonttttt]

they just just give them a corridor, case closed

[@renaatsenechal]

​​@@binbows2258the reverse almost happened in 1977, but I doubt ethiopia even wants a failed state

[@Killshot15]

Are any of you in these reply’s Somali I’d like to ask you something if one of you are.

[@iancollier6802]

Newton and Gottfried Leibniz both came up with differential calculus, independently, at roughly the same time - the notation we use is actually that of Leibniz. It sparked one of many grudges for Newton who couldn't accept not being the brightest person on the planet. Edit- I should have waited out the video before jumping in- whops.

[@tanasaky]

What I got from all this is that you can try to be as precise as you can with sanctions, the social spending (aka the people) will suffer no matter what. It is always the people paying the price, be it in the trenches or back home.

[@rhughes3674]

Great content. You did a great job explaining fungibility, and I loved the joke when Putin was checking his watch.

[@bozimmerman]

Here's another anti-sanction twist: What if the sanctions primarily impact government supporters who, when their relevance is eliminated due to sanctions, represent one less worry for the dictator, and thus, one less counter-balancing force acting ON the dictator. Referring here to Bruce Bueno de Mesquita's analysis of dictators and their incentives. Said another way: If a dictator's position is maintained by, e.g., satisfying a group of 10 warlords, and you eliminate 8 of the warlords, is the dictator more stable or less?

[@kunicrossgaming]

You won't eliminate a single war lord by sanctions just maybe curtail their power a bit - the downside is that it gives the government an easy excuse why it can do it's duties. "very sad that you need to suffer dear citizen, we would like to help but you see, nation x with it's sanction makes it impossible! All that money for the military? We need that to protect you from nation x! So sorry you need to starve!" I think Cuba for example has a regime where it's main justification is the sanctions against Cuba. As long as more citizens blame the sanctioning nations than their own government they can actually stabilize a regime. Given that most sanctioned nations also control the information access of their citizens it's almost impossible to cause a regime change etc. Just by sanctions it's more a measure of desperation where you want to do something but not Directly act in the nation. In Ukraine they are probably more efficient since Russia is sanctioned and Ukraine supported. The Russian regime will probably not fail due to sanctions directly but lack of progress in Ukraine. (which is harder to hide and if you blame it totally to the west it's also a testiment of own impotence so it's easier to ignore failure and let the forever war continue "it's all going according to plan!")

[@retardo-qo4uj]

many people blame IMF for removing subsidies too, not the goverment that use subsidies to cover their stupid mistakes. its easier to blame other countries, especially if their religion is different

[@TheFrewah]

Read about the Magnitsky act

[@aaabbb58509]

I'm wondering if the idea of a square-rootish function for the utility of military spending (ie. the more you spend, the less more spending is good) is the right intuition. It might be more of a sigmoid function. Ex. If I think I need 50 tanks to win a war, then going from 10 tanks to 20 is useless since I'll still lose, and going for 70 to 80 is only a little good when I think I'll already win. On the other hand, if a loss of production makes it so I go from 55 tanks to 45 tanks, then I'd be willing to spend a lot of money to go from probably losing to probably winning the war. So, then targeting production has little effect on military output in that case.

[@TheBaltrum]

The problem with this is that it assumes perfect knowledge of how much military you need to actually win the war. As can be seen by the Ukraine/ Russia conflict everyone was far of how much Russia would actually need to win. So if you think you need 50 tanks but there is a 25% chance you need 75 to win and otherwise you lose than would you actually risk it with 80 tanks or would this be not sure enough. Adding uncertainty to the sigmoid would smooth it out an it would look close to a square root. Also at 10 tanks who is saying your enemy doesn't attack as now he would be likely to win a war

[@theorixlux2605]

Exactly what baltrum said. Uncertainty is a cruel mistress

[@TheFinalChapters]

It's not a good function. Not even close. In the case of military spending, you spend as much as you think it necessary to win the war. In the case of social spending, you spend as much as you think is necessary to avoid social unrest. Only if both of these are satisfied can you start weighing how much what's left over goes toward. In other words, making tanks more expensive directly reduces the number of tanks built proportional to the cost. Obviously if you look at individual arms instead of the aggregate, not all prices will change equally so the cheaper arms will be produced more than the more expensive. However, the total spending does not change, because all spare money was already going to the military. Given Russia clearly isn't currently winning the war but also isn't suffering any serious social unrest, it can be assumed that we are in the above state, where Russia is spending everything it think it can get away with on its military. And even this is a gross oversimplification of the situation.

[@JABN97]

I agree with your assessment but for different reasons: Economies of scale matter. In other words: going from 10 to 15 F-35’s has much more impact then going 145 to 150. But: regardless if you have 10 or 15 planes, you are still going to need a airfield with the same minimum length of runway. So the extra 5 planes from 10 are going to be more expensive. Or more accurate: the same amount of extra money that buys you 5 extra planes as a small airforce, would bring you 15 planes as a big airforce

[@ansonang7810]

​@@JABN97 they already have so much but can't use them they only operate like 10 to 20 in Ukraine SU and migs logistics problems. They also have thousands of Soviet tanks but have to make them operational sure T70 T60 can't beat modern tanks but can still destroy them and stronger than Bradley 1vs1. They can't even get Armata tank to work properly as it's so sophisticated, be dropped also by 1 or 2 Javelin or Himars while punching same power as T70 120mm. They also have to train digital tank operators. So mass production of it won't happen. They're gonna use T80s like Ukraine for MBT. Not to mention the cold war era migs. That china are using for training like mig 15, 21 , 23. If they can drone that Ukraine is in big trouble as it those can auto cannon and drop 500lbs bombs. It can't beat F16 but can still bombard ground targets or hunt helicopters. Weapons wise Russia can but economy will have problems in the future. Russian army is not yet army of the future it will take time to train Armata and terminator operators , drone operators, new doctrine tactics digital drone will take years for modernized Russian army. Economy wise Yelstin left far worse economic problems than today they got out of it they have good think tanks. Sanctions and trade war divided the world also.

[@tyllerboomgaarden7344]

As a dyslexic who likes lines on maps, but strugles with anything invented, discovered, or applied by Newton. I have stomachached this, but my pride is harmed irreplaceably.

[@rogerwilco2]

I keep being surprised hoe many people seem to have an aversion against basic high school economics and even more basic maths needed for it. Most people should have no problem with this by their early teens.

[@johnryan6003]

Debt. Countries can run deficits to maintain increased military spending while keeping social spending at the same levels as before. LBJ, for instance increased military spending A LOT during Vietnam war. And increased social spending A LOT by implementing Medicare.

[@DiamondKingStudios]

I wonder if the Great Society would have had less backlash politically had it been done outside of the context of Vietnam, unless other factors would have maybe still affected it (such as the Civil Rights movement and reactions to it, second-wave feminism, and other 1960s developments). I still think that without a Vietnam War, Johnson probably might have run in 1968, probably either with RFK as a running mate or a more moderate candidate to try to placate the South (the latter seeming a bit hopeless after 1964 honestly). If he somehow won and served another full term, he’d only live two days in retirement (in our timeline he died on 22 January 1973).

[@jeffScotty]

I grew up with a type of Dyslexic and dysgraphia that make it extremely difficult for me to arrange and then understand complex math problem. while I was able to overcome most of my challenges and have success in life, I still struggle with the shame I feel around this issue. watching your videos have a profound affect on my ability to comprehend “stuff”. Thank you Wilhelm, so much for turning a light on in a dark room that I never used before. ❤🙏🥳

[@h8GW]

I have the opposite problem. I used to be very good at math in middle and high school, getting straight A's in algebra and trigonometry. Then I hit a brick wall with calculus in college. In the 20 years since then, I've forgotten almost all my math and William was basically talking in a language which I barely knew more than a few words of, in my case French......which I also took in school but couldn't progress in.

[@AK-tf3fc]

@jeffScotty you should get your sperms remove. No need to pass your weak genes. We indians make sure our children learn multiplication table by age 5

[@geraint8989]

It’s heartening that the worst countries in the world are destined to fade into insignificance. Even without political will to move away from fossil fuels, they are definitely finite.

[@Moses_VII]

Your comment makes no sense. The move away from fossil fuels won't hurt America or Israel very much. It also won't affect China, if you are a NATO-lover, because China is the home of electric cars and green energy technology.

[@KaloyanKasabov]

@@Moses_VII I would disagree, due to China still seing a need to build coal plants. Albeit, I am not sure how we in europe are gonna fare. Especially with the complacency when it comes to moving away from fosil fuels. We we just too reliant on a country who's interests stand in direct contrast to ours. And even more so in eastern europe where Russia still has influence and many sympathisers

[@quentindaugherty4926]

​@@Moses_VIIChina is already on its last legs economically

[@manserizawa2327]

​@@KaloyanKasabovEurope lost cheap Russian energy then Germany plunged into recession. That should remind you what powers Europe's engine

[@DiamondKingStudios]

⁠​⁠@@KaloyanKasabovIsn’t China the largest consumer and producer of coal in the world? 80% of their electricity generation is probably coal. I will admit the coal dependence appears to be slowing a bit, but they’ve already started at so high a level to begin with.

[@baltulielkungsgunarsmiezis9714]

There is a reason I have 0 support for humanitarian aid.

[@General12th]

Hi William! This channel has followed a path determined by gradient ascent to a local maximum of interest within my brain.

[@Zemkezis]

It's gonna be hard to express this in a comment. This is my favorite Spaniel video of all time, and the math was perfect.

[@johnryan6003]

Some countries have a hard time borrowing money so they have to offer high interest rates to get loans. The loans increase what they can spend now. The interest lowers what they can spend later.

[@ColonelFredPuntridge]

"Fungible" means "tasty in mushroom sauce". The root is _fung,_ as in "fungus". The Italian for "spaghetti with mushrooms" is _"spaghetti con i *funghi*"._

[@echo_9835]

With the power of CGI, Arma III footage, and cardboard cutouts a country can have as many tanks as it wants, just hope they aren't needed for anything.

[@TheKakan1337]

lol ruzzinazi mad cuz bad

[@playnochat]

Cardboard cutouts are used as missile baits. They work very well actually.

[@Taletad]

This is one of your best video ! Thank you !

[@luisluque2054]

The more evident solution is for the public opinion to accept that the social spending is your enemy's responsibility, not yours. They have the ability to reallocate their spending from military budget into the social budget and if they fail to do that, it is their citizens job to demand it.

[@hydrolifetech7911]

25:48 That question from reporter asking whether US should reevaluate its relations with Qatar for its support for Hamas. That reporter should ask whether the US should reevaluate its relations with Israel too for funding Hamas! What a ridiculous question!

[@petergoverts7723]

I really enjoy your smooth delivery !! You keep it real & it never gets overwhelmingly boring to say the least . Keep up the excellent job 🇺🇦

[@snigdhajyotidas3057]

There is an open paper on google by the cia how the UK naval blockade and UN sanctions could do only minimal damage to Rhodesian economy. Interesting read

[@prfwrx2497]

Rhodesia had South Africa, basically.

[@citizenVader]

Tell me about it. There is a project for relief on schools in 3rd world countries where the students in all colleges work for 1 day a year to use the earned amount on building or fund existing projects. The first year this project existed, most of that money was supposed to be used for building purposes, but it ended up in the hands of warlords, so I haven't supported any foreign relief projects since.

[@parkerengineering]

Yes - finally! partial differentials leading to a basic curve fit and optimization!

[@GhostEmblem]

Yh, what he said.

[@UncleJoeLITE]

I admit I had to watch it twice. Thanks.

[@andrewduff2048]

One of the most frustrating things I’ve seen recently was Jarad Kushner talking about sanctions on Iran. It was clear that he treated weakening their economy was the goal of sanctions. That’s like saying we are going to hurt their economy in order to hurt their economy. But why?

[@MidnightSvn]

Jared kushner views iran as the eternal enemies of his people from israel and he wants iran to be destroyed

[@meandtheboisvlogs8109]

I'm a future political science student and these videos are so easy to understand and make me so much more motivated to keep learning. From the bottom of my heart, thank you for doing what you do.

[@Deicide6666]

please add your books to audible. I'd love to get them. I hope you see this and respond. Love your videos!

[@Gametheory101]

I did the math, and unfortunately I would be better off just posting more videos. At least you get more content either way?

[@Deicide6666]

@@Gametheory101 Ahh okay i did not know that before. I'll add your books to my amazon list. Thank you for that information. I understand why you're not on there.

[@m.streicher8286]

@@Gametheory101 It's less about the value you receive, and more about making your work available to a wider audience. but hey its your book

[@deborahferguson1163]

I would imagine the amount of time it would take to produce audio would be significant…!

[@morten3465]

I vividly remember the arguments around the oil price cap last year. EU+US: price cap on Russian oil (and no trade if above that)! RU: No oil for you! Africa+Middle East+Asia: US+EU are not the boss of us, we'll buy all that Russian oil, but below price cap. RU: ...

[@gzer0x]

Truthfully, and this might be the weird history student moment, I first learned the word “Fungible” from white papers about the reasoning and laws of the State Department’s official foreign terror org list. “All Money is fungible”

[@Wonko-bj4jx]

Me at the beginning: who the heck didn't know what fungible meant? Also me: stopping the video once the math came out

[@luisluque2054]

A more creative solution to get rid of the fungibility problem would be to trade with your enemy their tanks for your food and medical supplies. The tanks quantity and quality could be easily verified (this would also get rid of the problem to effectively audit your enemy real spending allocation) and the sending of your non-fungible humanitarian relief goods (never money) would depend on the former. Though experience in Africa has taught us that even in this case your enemy could sell the humanitarian goods to a third party to fund their military budget. Perhaps we should make peace with the idea that war is a nasty business and that you must never help your enemy in any way in order to save more lives (yours and those of your enemy) in the long run while forcing it to internalize the full consequences of their military actions.

[@mariomenezes1153]

Great explanation. Thank you!

[@akora42]

great vid as always, I'd be glad to hear your take on the Venezuela X Guyana lines on maps dispute

[@alex_zetsu]

It's easy to audit a country when 70% of their income comes from aid you give them. I mean the Soviets had good records of Cuban finances. They used to have the same with Vietnam (although in that case their spending priorities were aligned so that was easy).

[@haph2087]

I'd guess that doubling the cost of the tank would roughly half the amount of money you spend on tanks, meaning you get in total a quarter the number of tanks.

[@theorixlux2605]

Love seeing the applied mathematics! Hoping to see more in the future

[@J_Z913]

Great video. Nicholas Mulder's book The Economic Weapon is a great expansion on some of these points. Thanks for this video!

[@simplyme5324]

OMG, this is the best channel I have seen so far on geopolitical decision making. What did you study to come up with those calculations?

[@Curmudgeon2]

As an aside, I still cannot figure out why we are paying (does not where the money came from) for the release of citizens that freely went to Iran. If the Government sent them yes, if they ignored the news and went there anyway... you walked past the sign and into the minefield...why should I have to come out there and get you.

[@erezzimmerman3204]

This video is definitely not fungible! I learnt more than any other video I’ve watched for a while. Thank you!

[@EnGammalAmazon]

Great analogy on the bees. This reminds me of how I taught high school voc. ag. I had a student that was brilliant about bee keeping. I would have set up the conversation with the class by asking David a question about, "Does this make you think about how the hive might solve this? " he knew enough to get to the answer. In the end, David would get to the solution, the rest of the class would get it at some level and it put David in the place of being the instructor, which allows every student to learn more deeply David advances in the eyes of the class and I pretty much disappear. The knowledge is now owned by the class as their own and will be pretty hard to forget. They learn science can be interesting, logic is useful and how to make discoveries through conversation. I would give them bonus points the next day if they could find out who Socrates was and what one of his biggest contributions was to the world. But, then again, David probably already knew the answer to that. He was just that kind of kid at 14.

[@hillelderman]

This was amazing. I'm an artist. As such, I always thought I was bad at math, but when applied, in such pragmatic ways math is beautiful

[@angela2726]

Maths is supposed to be abstract. I never got over the level of cut a pizza in half and you can share with a friend 😂

[@the_big_dog813]

Excellent approach and presentation.

[@phillipjohn4800]

Great video! Feel like I learned a lot

[@EnGammalAmazon]

Another very good explanation.

[@oleopathic]

Engineer and history and economics buff, here. Thank you for the boring math!

[@JohnnysCafe_]

Everything we expected to happen to Russia has not happened, the ruble is doing well and in 22 was one of the strongest currencies, I will wait and see what actually happens because all out predictions about Russia have been wrong.

[@neutralevil1917]

I hear some words of wisdom here. You shouldn't have hired morons for that job. When your Russian experts in think tanks are actually Jews, Georgians, Lithuanians, Ukranians and other former Soviet citizens who can't stand Russia and doesn't really understand Russian mentality you're gonna get very skewed by the hatred picture. Also the notorious Western feel of superiority doesn't help. Hubris is the mother of all sins

[@advancetotabletop5328]

Are the Russiabots still telling us the sanctions aren‘t working? Thanks for the video!

[@johnryan6003]

Unless they are the USA. The USA runs the world’s biggest nominal deficit each year. Bit people still lend the U.S. money even when the interest they get is negative once inflation is considered. A pretty addicting situation for US.

[@bikenavbm1229]

some over my head but understood the principles thank you.

[@renj123]

"and no it's still not about those stupid tokens" - this got my like lol.

[@theconqueringram5295]

Wow, this was one winded, but fascinating analysis!

[@asan1050]

William Spaniel , Thanks Much !.......

[@antoniosdimoulas3566]

Come on, that’s why the Senate has printing machines, just push that button, and the printer will start spitting all the dollars you want..💵💵💵💵😂😂😅

[@bthyme]

Sanctions are a weapon of war. Providing humanitarian aid to an enemy during wartime relieves pressure from its own population and prolongs the aggression. Russia needs to answer to its own people.

[@annbjorn]

Sanctions is not about reducing damage, its one of the tools to shorten the war

[@dodaexploda]

I'm guessing doubling the cost of a tank from 4 to 8 will decrease production to 25% of the original production. I didn't do any math, I'm just guessing.

[@Oldman5261]

This formula falls apart when you are considering the US as here our leadership never has to deal with limited budgets. It just prints more money (sarcastic laugh inserted here).😂

[@jackthorton10]

Is thier others besides the US that this formula does not work?

[@itsdownhillnow]

Pretty funny. Today I wrote a company policy for asset fungibility. 😂

[@SudaNIm103]

Really liked this video even the math!

[@Thefly142]

My answer, i cannot say precisely, because it depens on the industrial tools available, but because of economy of scale, a 50% budget reduction does not mean a 50% productions reduction but more like maybe 60-70%, possibly even more

[@badluck5647]

The rogue nations willing to live under a saction also become cautionary tales to those who may think twice of running afoul of international law.

[@jakeaurod]

I first run across the word "fungible" when researching deals to stop North Korea from developing nukes. I was working on my Pols BA, so I didn't get as deep into the math as I might have if I had got a BS. I remember that it wasn't just cash, but food and fuel that were fungible, since they could be diverted to the military. I wonder if this logic and calculus can work with regards to civilians and the actions of their government. If a country starts a war and the country retaliates and civilians are casualties, a lot of people get upset about civilian casualties and the possibilities of sending aid, which might end up in the hands of the military. Without necessarily getting into the ethics of civilian casualties, I wonder if one might present calculations showing the number of civilian casualties: A, caused by the war; B, by starvation because relief to civilians was not allowed to be sent; C, caused by starvation because aid that is sent anyway but still doesn't make it to civilians, and; D, caused by a civilian revolt against their government/rulers who got them in this mess. Part of the argument may seem to be about the ethics of collective punishment and blaming civilians for what their government/rulers do, but I'm just asking about the math.

[@angela2726]

Most food aid relief goes straight into the hands of the Hamas 😢

[@TedRobak]

Thanks!

[@Gametheory101]

Thank you!

[@stevengreidinger3304]

Fantastic use of actual math! It’s fine. Somebody who passed 2-3 classes of college economics or physics should be able follow it. Keep it up!

[@johnryan6003]

USA last had a balanced budget in 2000. Clinton administration was able to lower military spending due to breakup of USSR.

[@kingace6186]

(15:50) Military percent would be shrink to 1/9 and social percent would swell to 8/9 as a baseline. So for a nation at war it means that the scale has gotten stretched smaller. It would be much harder to spend on the military while still keeping up with social spending demands. So I'm guessing production would be cut by 25-50%, ideally.

[@rewindx123]

This really was a fun video!

[@SincerelyFromStephen]

I tried following the math and somehow got Cincinnati as my answer

[@CaptainBanjo-fw4fq]

12:07 I love how clearly you explain this. Haven’t watched the whole video yet, but curious to see if the rest of the video will touch on economies of scale. E.g. if you build one or two shiny, Killy things, they’re bespoke assets. When you build a 5, 10, 20 you will benefit from industrial savings (otherwise known as the reason an f35 costs about $80 million USD). 16:05 I’m going to go with it reduces the overall number to a third, e.g in you example 8-9 tanks.

[@SianaGearz]

You don't need to consider single quantity shiny killy things in a budget constrained situation at all. Because these are the first things to get axed under even a little bit of pressure. You're guaranteed to virtually never see another Armata being built, because instead that budget will be allocated to refurbishing T72s and then T64s. Cost effective and scalable sources of weaponry are the only ones that count to begin with.

[@CaptainBanjo-fw4fq]

@@SianaGearz On land, you’re spot on. I think it gets interesting on the water though…

[@wasakawakawaka2028]

This is very interesting but I’m going to have to watch this a couple of more times for it to sink into my brain 😂

[@anthonymunson5842]

I was an Econ major and super passionate but switched to accounting for the stable employment. Don’t downplay the math I live vicariously though you!

[@JohnVerdon-JohnVerdon]

One could argue that social spending increases as a military increases the number of people it recruits - and reduces unemployment

[@darrencorrigan8505]

Thanks, Bill (William Spaniel).

[@torstenkruger7372]

I would argue that there is a slight difference between economic sanctions and import controls of Equipment of war. but you are the professional.

[@robertginsburg8113]

Although past sanctions have been marginally effective at best, I believe the current sanctions on Russia will be very successful, if they are properly enforced. As the war in Ukraine has entered what appears to be an attritional phase, that is a phase where sanctions start to be more effective. Slava Ukraini! P.S. I enjoyed the nerdy humor.

[@neutralevil1917]

Yup, 90 weeks ago we've been told the unprecedented sanctions will crush Russian economy in a few weeks

[@RightSideNews]

I agree

[@dannydetonator]

*Properly* is a keyword. Investigations on downed weapons reveal a widespread loopholes and black smuggling trade with Russia, and that's no surprise. Corrupt individuals and companies chip in for a good profit from the most corrupt and experienced in black-economy country with the largest land border (over the Earth's circumferenvçe), and the result is increasingly sophisticated whack-a-mole. That in mind, those dealing in technology used in weapons of Russia have to be found and tried most harshly - the first part is actually happening. There are both international and russian-opposition 'spies' trying to figure out and follow these schemes, but evidently not enough has been done. I have no clear solution short of sabotaging all Russian weapon's plants, currently most out of reach for Ukraine. But behind the enemy lines work continues, imagine how they blew up a fuel train (and reserve mountain-pass lines) in the longest and only transport tunnel connecting Russia to China?

[@juanharocorbera1577]

it is not a war attrition. to reach positions it is not a war attrition

[@romanbellic810]

14 tanks instead of 50 is my guess.

[@beaumatthews6411]

1:25 i actually had when i looked for synonym of synonymous :D

[@RobespierreThePoof]

William, I'll have to come back to this one when i get a good night's sleep. Economics is the one academic discipline that has always bored me to tears - even though i know i should try to understand it better. This is why i do cultural history. I never have to come anywhere near an economist or or the kinds of snooze-inducing things they write. But i do want to understand sanctions and i always enjoy your responsible approach to topics. So I'll be back!

[@puraLusa]

Did u mean culture studies?

[@alexpotts6520]

I wish more people had the humility to acknowledge they don't really know much about economics, rather than giving overconfident and underinformed hot takes about economic issues all the time.

[@angela2726]

Me too. I know 2 economy teachers and they are horribly poor because they always buy and sell things too late or at the wrong moment. The really wealthy do things more by instinct. In the case of a war it is quite different and requires a great deal if thinking through

[@dopaminedreams1122]

@@alexpotts6520 pot calling kettle lmao

[@dopaminedreams1122]

@@puraLusa no, maybe his country doesn’t call it that?

[@fernsong8558]

Will you be doing videos on the Venezuela-Guyana crisis, should it escalate to armed conflict? It seems right up your alley

What do you think of Kamil Galeev's (and his Rhodus Intelligence institute's) analysis of the wrongheadedness of sanctions wrt arms manufacturing? i.e. that the real bottleneck that is not being addressed, is the western precision manufacturing machines and their parts?

[@ammgart2046]

Hello William. The variable "t", cost per tank, makes sense, but I think it is an oversimplification. Could you go into a bit more detail? For example, to build a "new" T80 with all the fancy sensors and optics certainly requires a ton of microchips. So as a work-around, they may opt to produce "older" models of tanks without all the fancy optics & sensors. Or invest more in artillery, infantry, or other military hardware. The point I'm trying to make is that "t" as you describe it only works if the only choice of weaponry is a specific tank... but in reality, the military budget has a huge menu of options... and sanctions only impact a few (high end) menu items.

[@alexanderwilliams5797]

Best video so far.

[@petergerdes1094]

I think your notion of military effectiveness is a bit problematic. It might be a good measure of the peacetime returns to military spending but the problem is that in a conflict you have super-linear returns to military capacity not sublinear ones. If you only have a few artillery systems and your enemy has a lot your artillery quickly gets destroyed but as you add more artillery each piece lasts longer because you take out more of their artillery before it gets you. Indeed, this is kinda why there is strategy in war at all. You need to bring superior force to bear because damage is non-linear in firepower.

[@sophiehynds8847]

For 15:53 guess, mine is a reduction of 75%, 200 million goes half as far as it did before, but now because marginal utility is reduced by half your only spending 100 million on weapons, hence the 75% reduction

[@sophiehynds8847]

Dammit Spaniel explained the answer in a way that I still don't know if I was right or not 😛

[@my_username141]

You had me at 'Fungible'

[@catsanddogsplaytime2914]

So fascinating

[@placebomandingo2095]

My dad was a tv producer in the 1970's and joked about Buffy reinventing herself as native after trying other angles to break into showbiz.