It’s certainly not diplomacy and it’s not coercion. It is war conducted by economic means, all designed to produce an economic crisis and social unrest leading to a fall of the government.
President Donald Trump delivers remarks at the World Economic Forum in Davos, Switzerland on Wednesday, January 21, 2026, at the Davos Congress Center. (Official White House Photo by Daniel Torok / Public Domain)
By Jeffrey D. Sachs and Sybil Fares
Common Dreams
John Maynard Keynes famously wrote in The Economic Consequences of the Peace (1919):
“There is no subtler, no surer means of overturning the existing basis of Society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction and does it in a manner which not one man in a million is able to diagnose.”
The United States mastered this art of destruction by weaponizing the dollar and using economic sanctions and financial policies to cause the currencies of targeted countries to collapse. On Jan. 19, we published “The US–Israel Hybrid War Against Iran,” describing how the United States and Israel are waging hybrid wars on Venezuela and Iran through a coordinated strategy of economic sanctions, financial coercion, cyber operations, political subversion, and information warfare.
This hybrid war has been designed to break the currencies of Iran and Venezuela in order to provoke internal unrest and ultimately regime change.
On Jan. 20, just one day after our article, U.S. Treasury Secretary Scott Bessent publicly confirmed, without qualification, apology, or ambiguity, that our description is indeed the official U.S. policy.
“It is high time that the world’s nations face up to America’s rogue economic behavior… This lawlessness is illegal, reckless, harmful, destabilizing, and ultimately ineffective in achieving America’s own goals, much less global objectives.”
In an interview at Davos, Secretary Bessent explained in detail how U.S. Treasury sanctions were deliberately designed to drive Iran’s currency to collapse, cripple its banking system, and drive Iran’s population into the streets. This is the “maximum pressure” campaign to deny Iran access to international finance, trade, and payment systems.
Bessent explained:
“President Trump ordered Treasury and our OFAC division, Office of Foreign Asset Control, to put maximum pressure on Iran. And it’s worked, because in December, their economy collapsed. We saw a major bank go under; the central bank has started to print money. There is dollar shortage. They are not able to get imports, and this is why the people took to the street.”
This is the explicit causal chain whereby U.S. sanctions caused the currency to collapse and the banking system to fail.
Official 2025 portrait of Scott Bessent. (United States Department of the Treasury / Wikimedia Commons / Public Domain)
This monetary instability led to import shortages and economic suffering, causing the unrest. Bessent concluded by characterizing the U.S.’ actions as “economic statecraft,” and Iran’s economic collapse as a “positive” development:
“So, this is economic statecraft, no shots fired, and things are moving in a very positive way here.”
What Secretary Bessent describes is of course not “economic statecraft” in a traditional sense. It is war conducted by economic means, all designed to produce an economic crisis and social unrest leading to a fall of the government. This is proudly hailed as “economic statecraft.”
The human suffering caused by outright war and crushing economic sanctions is not so different as one might think. Economic collapse produces shortages of food, medicine, and fuel, while also destroying savings, pensions, wages, and public services.
Deliberate economic collapse drives people into poverty, malnutrition, and premature death, just as outright war does.
This pattern of suffering as the result of U.S. sanctions is well documented. A landmark study in The Lancet by Francisco Rodríguez and colleagues shows that sanctions are significantly associated with sharp increases in mortality, with the strongest effects found for unilateral, economic, and U.S. sanctions, and an overall death toll comparable to that of armed conflict.
Economic warfare of this kind violates the foundational principles of international law and the U.N. Charter. Unilateral sanctions imposed outside the authority of the U.N. Security Council, especially when designed to cause civilian hardship, are illegal.
Hybrid warfare does not evade international law by avoiding bombing (though the U.S. and Israel have also illegally bombed Iran, of course.) The illegality of U.S. “economic statecraft” applies not only to Iran and Venezuela, but to dozens more countries being harmed by U.S. sanctions.
“While the U.S. sanctions work in the short run to create misery, their incessant use is rapidly encouraging other economies to decouple from the U.S. financial stranglehold.”
Europe has perhaps begun to learn that being complicit in America’s economic crimes is no salvation, since Trump’s government is now turning on Europe in the same way, albeit with tariffs rather than sanctions.
Trump has threatened Europe with tariffs for not turning over Greenland to the U.S., though he rescinded that threat at least temporarily. When Trump “invited” France to join Trump’s Board of Peace, he threatened to impose a 200 percent tariff on French wine if France declined the invitation. And on and on.
The United States can wage this kind of comprehensive economic warfare because the dollar is the key currency in the global financial system.
If third countries don’t comply with U.S. sanctions on Iran and Venezuela, the U.S. threatens to impose sanctions on the banks of those third countries, specifically to cut them out of dollar-based settlements (known as the SWIFT system).
In this way, the U.S. enforces its sanctions on countries that otherwise would be happy to continue trading with the countries that the U.S. is trying to drive to economic collapse.
While the U.S. sanctions work in the short run to create misery, their incessant use is rapidly encouraging other economies to decouple from the U.S. financial stranglehold.
The BRICS nations, and many others, are expanding the conduct of international trade in their own currencies, thereby building alternatives to the use of the U.S. dollar and thus avoiding these sanctions. The U.S. ability to impose its financial and trade sanctions on other countries will decline soon, probably precipitously in the coming years.
It is high time that the world’s nations face up to America’s rogue economic behavior. The U.S. has been waging economic warfare with increasing intensity, all the while calling it “economic statecraft.”
This lawlessness is illegal, reckless, harmful, destabilizing, and ultimately ineffective in achieving America’s own goals, much less global objectives.
Europe has been looking the other way until now. Perhaps now that Europe too is under threat, it will wake up and join the rest of the world to put a stop to America’s brazen and illegal behavior.
Jeffrey D. Sachs is a university professor and director of the Center for Sustainable Development at Columbia University, where he directed The Earth Institute from 2002 until 2016. He is also president of the U.N. Sustainable Development Solutions Network (SDSN) and a commissioner of the U.N. Broadband Commission for Development.
Sybil Fares is a specialist and adviser in Middle East policy and sustainable development at SDSN.
This article is from Common Dreams
Views expressed in this article and may or may not reflect those of Consortium News.
Or perhaps just economic witchcraft like a religious form of economic inquisition for the western cultural,economic,military, and religious dominance with the US as the deficit loss leader military technology complex we will refuse to share with allies if they resist.
Bessent concluded by characterizing the U.S.’ actions as “economic statecraft,” and Iran’s economic collapse as a “positive” development:
“So, this is economic statecraft, no shots fired, and things are moving in a very positive way here.”
*
Scott Bessent appears to hold an obscenely inaccurate definition of the word “positive”.
Perhaps Mr. Bessent would do well to study an authoritative, accurate definition, such as that of Cambridge Dictionary:
Positive, adjective – full of hope and confidence, or giving cause for hope and confidence:
a positive attitude
On a more positive note, we’re seeing signs that the housing market is picking up.
The past ten years have seen some very positive developments in East-West relations.
There was a very positive response to our new design – people seemed very pleased with it.
Opposite
negative (WITHOUT HOPE)
*
Peace.
Professor Sachs and his co-writer bring remarkable clarity and broad international experience to this topic. And it is clear in all his work that that he is moved by genuine empathy for the human aspirations of all people and nations. He has seen the suffering and listened to all sides. There are few if any voices more balanced and informed.
I want to give more of a name to the long history of western imperialism and economic warfare.. To be organized with a goal to make other people suffer in order to steal wealth or force compliance with any part of a criminal enterprises is the essence of organized crime. The US and Israel and of all their corporate and national helpers have formed the largest crime family in human history.
Both parties are smeared with blood, and only a handful of genuine reformers have any meaningful places of leadership in our society. Where these bi-partisan supports for sanctions lead is to variations on the theme of genocide, or collective punishment. That genicidal end game end is manifest most blatantly in Gaza, Libya, Iraq, El Salvador, Vietnam, Syria, Africa etc.in wars all supported by both parties, and by all major media. In the economic war thousands have lost their jobs, have been jailed, have had their personal/national/or organizational wealth seized by banks and governments submissive to the crime family, and tens of thousands have died from lack of food medicine or a route of escape. Thousands have simply been butchered by US special forces’ night raids, indiscriminate bombing, settlers occupying stolen land, and millions have died in bombing Vietnam and Iraq.
What must, and I do mean MUST be added to Professor Sach’s economic concerns is an acknowledgement that these same leaders in all industrial nations are endangering the foundation of all economic wealth by our addiction to fossil fuels. Many millions will die when food production, pollinators, clean water, fishing, coastlands etc. are devastated by the ever increasing destructiveness of climate change.
The argument I wish to make is that there is no longer room for citizens who prefer to truly turn away from the imperialist criminal direction of US government to hope in and vote for a lesser evil. The record of criminality in both major parties is too long and too deep and too reliant on militarism, secrecy, bribery, paranoid spying and corrupted corporate media. The unwillingness to address our ecological peril is equally insane. Only building a grass roots revolutionary resistance can address our situation. If we refuse to build the needed revolution towards harmony and away from violent combat, we condemn ourselves to a very dark future. I believe the majority of humans are more than ready for a new way to imagine what may be.
I think that Mr Bessent accomplishes the extremely hard task of being the most horrible American politician I have yet heard about. That is based on his remarks, as reported here and elsewhere, and his physical appearance. He is fat, arrogant, complacent, self-satisfied, smug, and vile.
Although no decent person can be in favour of war, I actually hope that Mr Trump and the Israelis do launch an all-out attack on Iran. And that they get their teeth knocked down their throats and drown on their own blood. “Live by the sword, die by the sword”.
Thirty years ago, the devastation of sanctions was shoved in our faces when Madeline Albright said, regarding our sanctioning and starving Iraq, that the deaths of 500,000 dead Iraqi children was “a number she could live with.”
>> Economic warfare of this kind violates the foundational principles of international law and the U.N. Charter. Unilateral sanctions imposed outside the authority of the U.N. Security Council, especially when designed to cause civilian hardship, are illegal.
Hybrid warfare does not evade international law…<<
'Nuff said: it is immoral and illegal. The only protections allowed the usa are nuclear and irrationality, though presently, they are sufficient.
Keynes 1919 comment that “not one man in a million” can diagnose the economic destruction certainly is truth in 2026. Cuba is the best and closet current example. No one knows what the 2026 Cuban economy would be like if Washington DC had not tried to harm it, continuously since 1969. I suspect that Washington DC interference has been a greater problem than Cuba’s system of government. Ask the average American what the primary problem is in Cuba, and not one in a million will say Washington DC interference.
How many Americans realize how malignant their government is behaving? Too few to for democracy to correct that behavior. Too few have an internationalist viewpoint. Too few read these paragraphs.
Much the same goes for Argentina, which in 1900 was – together with Russia – considered one of the most promising nations for the 20th century. Then it fell into the clutches of the US vampires.
The level of ignorance in the US regarding our government’s policies and the effect on human beings around the world is staggering. Most seem to prefer it that way.
I don’t know if it’s that as much as keeping American citizens “wrapped around an axle” so they don’t have time to complain, not to mention take action.