The new axis of evil: to stay alive, we should look up immediately

It is equally clear that the axis is building an alliance to share weapons, resources, intelligence, and influence. Iran and North Korea supply arms to Russia. HAMAS is greeted as “dear colleagues” in Moscow and supported by Iran. Iran and Russia just announced a new deal to help each other develop oil and gas. China associates with the axis too: China helps Russia to circumvent Western sanctions and at the same time bans selling drones to Ukraine. What do we do with this axis of evil?    

Clearly, the West needs to take a careful look at its previous policies. Consider German Wandel durch Handel (“change through trade”). The hope was that trade would make wars unattractive because countries would have so much to lose. The Russian invasion of Ukraine and the Hamas attack illustrate the failings of this approach. Providing rogue regimes with technologies, resources and market access potentially enables Russia, Hamas and the likes to scale up their aggressive behavior. What we saw in Bucha or in Kfar Azza was not a rational economic calculus based on “gains from trade”. These atrocities were driven by hatred. And if someone hates you, providing them with money and resources will not make them love you – it will only increase the probability of them killing you.

Appeasement does not work either. The Munich peace deal with Hitler was a colossal mistake but that painful lesson appears to have been lost on present day leaders. Both Netanyahu and Zelenskyi tried really hard to be friends with Putin but it did not stop the bloodbath. Unwillingness to confront an aggressor does not deter wars. Instead, it invites war because the fear of escalation causes escalation.

In a similar spirit, we all want to have dialogue and diplomatic solutions but one should recognize the differences too. For example, modern democracies are based on the notion of human rights and the value of human life. Yet, there are many places in the world—including the axis of evil—where human life has little to no value. Preaching humanism to a man-eating ogre may end up in a meal rather than a new believer.

The democratic world should immediately recognize the axis and their satellites as a mortal danger and take appropriate actions to deprive them of the ability to wage wars:

1. have a coordinated policy to maximize the impact. For example, imposing sanctions on Iran for Hamas or other attacks can raise oil prices and thus benefit Russia. One solution to this problem is to impose a uniform oil price ceiling for all sanctioned countries to reduce their export revenues and thus the ability to fund wars.  
2. provide the countries who fight (Ukraine and Israel) with the needed weapons and ammunition. Coordinated procurement of material and equipment can reduce the costs and support the allied economies while they adjust to possible disruptions of international trade.
3. apply and enforce sanctions (specifically, introduce “oil for food” program with proper controls as an intermediate step before a complete ban on purchases of oil and gas from Russia and Iran); ban the supply of electronics and IT services to the axis countries and enforce (!) the ban. All Western companies who are still in Russia should exit immediately, and those who operate in China should prepare to exit.
4. seize Russian assets wherever they are. Some worry that this may undermine the dollar as a reserve currency. But not defeating Russia will hurt the dollar (euro, yen, etc.) much more. If the axis ignites armed conflicts all over the world, the reserve currency status is nothing relative to millions of people killed or displaced. Some are concerned that seizing Russian assets may create a dangerous precedent. To be clear, the US seized German assets in WWI and WWII. There is little indication that these seizures somehow destroyed the international law and order or damaged the dollar as a reserve currency. Instead of inventing excuses, one should think of depriving the aggressors of the ability to wage wars as a demonstration of the power of performance bonds. Many of the rogue regimes have current account surpluses and significant assets in the West. If these regimes misbehave, the West can punish them by seizing their assets. Seizing Russian assets will teach an important lesson to potential offenders.     

The Axis powers lost WWII but the cost of defeating Nazism/fascism was enormous. One can’t escape thinking if it was possible to nip the aggression in the bud by confronting the evil. We will not know for sure but rolling the dice and trying to befriend Putin, Hamas, etc. does not look attractive in the light of historical experience. If the democracies fail to present a united front and give a decisive response to the modern-day axis of evil, the world may be eventually consumed by war.