Hola Libertinus!

This week, we're diving deep into economic sanctions and the social media hellscape. Sexy, right?

Ever wondered if those sanctions we hear about are just another blunt tool of economic punishment or if they actually sway world events? Or whether your daily doomscroll on X is harmless or just tribal brain-rot on tap? We’ve got some answers.

So grab your libation of choice, sit back, and let’s dive into the delightful mess of useless sanctions, mind-melting social media, and a world happily scrolling past its own demise.

🗞️ HEADLINES

• Interesting dialogue between two expats in Paraguay – should expats live in bubbles or interface with the general public?
  

• We hear a lot of Blackrock/Vanguard conspiracy theories floating around noways. I don't buy them. This one is actually real.
  

• Contrarian take on why microplastics may not be as bad for you as you think. I'm sure they aren't great, but compared to the alternatives, they may be the best solution.

✉️ DISPATCHES

Do Sanctions Work?

There has been a lot of dialogue about economic sanctions and their effectiveness over the past few years.

But, as is often the case in these big-picture complicated questions, there is little clarity or consensus about what "working" means.

Let’s be clear here, I'm not talking about hyper-targeted sanctions against single individuals for things like human rights abuses.

No, I'm talking about broad based sanctions that target entire classes of individuals and industries, or even entire countries.

Let's begin with the effectiveness of sanctions before they are even applied; in other words the threat of sanctions.

Can the US get countries to bend to its will under threat of economic sanctions?

In short, it's plausible.

The US is an economic powerhouse, and the USD is the global currency.

It makes sense to me that smaller, less economically viable nations, especially those who's little economic productivity is tied directly to the US, could be influenced by the threat of sanctions.

Getting actual data here is a bit difficult, because the threat of sanctions is usually in the form of implication or backroom conversations between diplomats, but nonetheless, it is logically plausible that this can and does happen.

Now, with larger more sovereign nations whose economic productivity is less reliant on the US?

It seems less likely to me, but for the sake of argument, let's assume that threat of sanctions is potentially effective in these situations as well.

But proponents of sanctions don't stop here.

They go further to claim that not only is the threat of sanctions effective in influencing other nations, but that the sanctions once implemented continue to be an effective tool for advancing US foreign policy.

The idea here is that once sanctioned entities feel the pain of economic sanctions, they will get their act in line with US foreign policy goals.

Here I am still of the mind that there is some probability of effectiveness of sanctions, but much less so.

A sanctioned country knew what it was getting itself into, and likely had some idea of the impact of sanctions against it before the sanctions were actually implemented.

So why would a country suddenly change its course when sanctions were escalated from threat to implementation?

The only two things that come to mind are 1) it didn't take the threat of sanctions seriously, or 2) it miscalculated the impact of sanctions.

I suspect that instances where the above occurs are relative edge cases and don't account for the majority.

Similar to the threat of sanctions, the implementation of sanctions is less likely to effective against economically powerful nations that are not beholden to US exports to maintain their economy.

Think about it, if you are running a large country vying for international hegemony, how much of a blow is it to your status if you have to subvert yourself to the will of the US?

It's huge.

So then, what does economic sanctions being "effective" once implemented mean?

Is the goal still to influence the sanctioned entity's alignment with US foreign policy objectives?

It doesn't seem like it.

Does anyone think that the US is successfully influencing Chinese, Russian, or Iranian policies?

I don't think so.

Which means the measure of effectiveness of sanctions isn't actually influencing policy, it is punishment.

Sanctions "working" takes on the meaning of negatively impacting the GDP of the targeted nations.

But who benefits from this?

Certainly not the sanctioned nations - after all, they just lost a powerful trade partner.

But the US doesn't benefit either.

Think about it - by sanctioning a country the US is really just eliminating a market competitor from their pool of trade partners which decreases competition and presumably increases prices for US consumers due to a decrease in supply.

And also, it's not like these sanctioned countries just cease to exist - they continue to export goods.

Just not to the US.

So who do they export to?

Increasingly it seems they build strong trade ties with other countries that have also been sanctioned by the US, forming a coalition of sorts.

Russia, China, Iran, and North Korea now for a kind of "axis of evil" intrinsically opposed to the US.

But in the cracks you have countries in the larger BRICS amalgamation, such as Brazil and India, who continue trading with both sides.

And if the US decides to sanction any of these nations, who do you think they will trade with?

Say it with me: "other countries that have already been sanctioned"

Another unintended consequence of sanctions is that it leads to the proliferation of black markets and corruption in the target countries, and these things don't just go away even after sanctions are repealed.

And finally, even supporters of sanctions agree that for sanctions to work, they have to actually be enforced, which is increasingly more difficult when a larger and larger number of entities are subject to sanctions.

In essence, if we are going to sanction everyone who doesn't bend to our will we either have to be prepared to face the economic consequences of that, or sanctions will turn into a "slap on the wrist" that doesn't actually impact the targeted economies.

Nullifying the impact of sanctions will mean that the threat of sanctions will no longer be effective as a method of influencing policy.

So do sanctions work?

It all depends on what the outcome you are looking for is, but I don't think sanctions are having the impact that US officials hope they do.

But what does all of this mean for you?

Sanctions are a very serious form of jurisdictional risk you have to cope with in your investment portfolio.

If you are a US investor, one way to mitigate against the risk of sanctions is to simply only buy financial assets associated with the US and its allies.

And certainly keep any assets that are tied to countries under threat of sanction out of your passive portfolio.

But with risk, comes potential reward.

If there are countries that may face sanctions, the market prices this in.

This means financial assets in those countries may potentially be selling for less than their true value and have upside if the countries end up not getting sanctioned.

It's not for the faint of heart, but if you want to make a jurisdictional risk play in your active portfolio, this is one way to do so. ~West

Why You Need to Detox from the Social Media 💩-show

It’s no secret social media is an amazing source of real-time information, niche community building, and also a steaming pile of 💩 on a hot afternoon.

Unless you’re heavily curated your feed, you’re in danger of being pummeled by a relentless barrage of hyper-polarized, red/blue/black/purple/pink/etc.-pill tribal warfare that makes a middle school food fight look like Arthurian diplomacy.

It’s addictive.

But let’s be honest, most of what you’re scrolling through is the intellectual equivalent of stuffing your face with starchy, deep-fried-in-heavily-oxidized-seed-oil fast food.

It’s quick, it’s easy, and it leaves you feeling a sick afterward.

Honestly, I have to limit my time on X. If I linger too long looking for my next dopamine hit, what little faith I have in humanity quickly evaporates. Things get dark fast and all your worst suspicions about people just get confirmed. I’m sure you know what I mean.

But these data points often lack context or any real statistical significance. It’s the nightly news. “If it bleeds it, leads.” Not exactly helpful for a nuanced perspective on modern issues.

This isn’t a particularly new or controversial idea, of course, but this is where Jonathan Haidt comes in.

Haidt has been making the rounds, arguing that social media doesn’t just distract us—it rewires our brains to favor shallow, partisan thinking. Instead of nuanced discussion or clarity-seeking, we get bite-sized outrage, keeping us glued to our screens, rewarding knee-jerk reactions over critical thought.

I’m sure you’ve seen plenty of folks parroting the ideology of their chosen tribe—echoing their team’s regurgitated opinions.

Most of the time, these “hot takes” are about as novel as watching yesterday’s news.

Of course, we’d all love to think we’re “above it.”

But let’s be honest—none of us are immune to the effects of these algorithms. Especially the youth, who are now facing unprecedented levels of depression and mental illness, tightly correlated with the rise of social media.

It’s also a fair point that AI is rapidly changing the game, as Haidt points out.

And while I’m excited to finally see Kamala take off her skin suit and reveal her lizard face 🐲… I’m not looking forward to disinformation going into absolute overdrive with AI tools.

Soon, we’ll be swimming in oceans of machine-generated garbage and low information folks will delight in marinating in their own confirmation biases. Fun times, right?

So what do?

Obviously we’re not advocating for a government clampdown. God forbid.

The solution, as always, starts with self-regulation and responsibility.

It’s time to detox from the low-calorie content that’s clogging our mental arteries and start feeding our brains something more organic and slow-cooked.

Here’s a shorthand I find insightful…

Forget where I encountered this idea, but the amount of time and effort it takes to create something is directly related to its value. In other words, if it didn’t take any appreciable time to produce, it’s probably not worth your time to consume.

As such, you should focus the majority of your consumption on longer-form content. Something the author put some time and thought into. An article is superior to a tweet. A book is superior to an article. You get the idea.

This is the best way to reclaim your intellectual independence and build up your “focus muscles,” which is practically an act of rebellion from the status quo in a media environment that’s designed to keep us from thinking too critically.

To that end, here at Libertas, we’re also committed to the discipline of diving into more nuanced, “beefier” texts in the weeks ahead—tackling more complex, more difficult ideas that actually matter.

We hope you’ll join us in choosing nuance over noise, steak over fries. ~Zach

That’s all for this week’s exploration into the circus of economic sanctions and the brain-melting effects of social media. As always, amidst the noise and chaos, it’s vital to stay grounded in what matters—keeping your mind sharp and your freedom intact.

So, stay curious, stay skeptical, and never forget that real independence and sovereignty begins between your ears.

Until next time…

Sic semper debitoribus,
~ West & Zack

👍 Enjoy this email? Please consider moving it to your primary inbox, and if you’re really feeling generous, hit “reply” and let us know what you think. Even one word will suffice. These steps will ensure you actually get the newsletter and email providers like Gmail don’t relegate us to your spam folder.

First time reader? You can sign up right here.