With the Russian invasion of Ukraine in full force, it seems that while the Ukranians are putting up a fight, longer-term resistance is futile. Russia has already recognized the independence of the embattled eastern states of Donetsk and Luhansk. Donetsk and Luhansk will become Russian puppet states or be absorbed into Russia itself. Ukraine will spend the money of its taxpayers and the blood of its young men fighting a useless war.
War is expensive for everyone. Turning war into a commercial exchange of territories would benefit the Ukrainian economy, foster good relations between the US and Russia, and prevent more bloodshed.
The estimated cost of the Iraq war cost $3 trillion USD, while the Afghanistan war cost $2.3 trillion USD. By contrast, Ukraine’s 2022 GDP is only $155 billion USD. The worst thing that could possibly happen would be for major powers such as Russia, the US, or the EU to create another massive fiscal mess in their own backyard.
There is an obvious “solution” that, unfortunately, nobody will adopt: Ukraine should sell Donetsk and Luhansk to Russia. The Ukranian government could then use that money to compensate victims of the war, rebuild the country’s crumbling infrastructure, or pay off its $125 billion USD in debt. Ukraine would win by securing at least some peace and injecting its economy with cash. Russia would be able to legitimately annex Donetsk and Luhansk. The European Union would win by preventing geopolitical tensions with Russia. Even the USA would win, especially if it helps Ukraine at the negotiations table.
Solving war through commerce is an ancient solution. During the Middle Ages, cities were routinely bought and sold. Sale of land in between nation states is rare, but still happens. In 1963, West Germany purchased the towns of Elten, Selfkant, and Suderwick from the Netherlands. Smaller border corrections are common. For that matter, the USA purchased Alaska from Russia in 1867.
So why won’t Ukraine adopt this obvious commercial solution?
The toxic ideology of modern nationalism tells people that giving up sovereign soil means that political leaders are cowards. It convinces old men to send young men to fight and die over pieces of dirt. It tells citizens that it is alright to oppose secession purely on aesthetic grounds to make maps look pretty.
Most wars caused by territorial disputes could be stopped with commerce. Azerbaijan could sell Artsakh to Armenia; India could sell Aksai Chin to China. Argentina could sell the Fitz Roy mountains to Chile.
The global foreign policy community needs to move beyond outdated 20th century nationalism. Peace between nations can only be achieved once passionate nationalism is replaced by pragmatic commercialism.
Reflecting on the Napoleonic wars, Frederic Bastiat famously wrote that “when goods don’t cross borders, soldiers will.” This world needs less Napoleon and more Bastiat.
