Letter From the Editors

There is a fundamental asymmetry in the economic debate over guns and butter: Butter feeds people who can make guns, but guns kill people who can churn butter. In the ongoing wars of attrition, the combatants are leveraging this asymmetry, sabotaging the enemy’s economy until either their troops can’t fight or their civilians won’t work, likewise defending against the same strategy.

In Izvestia, expert Farkhad Ibragimov explores how this strategy is playing out in Iran, where the younger Khamenei has confirmed the country’s new wartime leadership after the sudden, violent death of the previous one. These are old veterans, and Ibragimov writes their appointments reflect “not the desire to reform Iran but rather the objective of maintaining the system’s manageability during a protracted crisis.” Among the picks are a leader of the Basij – “responsible for not just mobilization but also the stability of the political system,” – tasked with securing the home front as the IRGC faces a war of attrition – “prolonged pressure, new crises and tough bargaining around the Strait of Hormuz,” as Ibragimov puts it.

Iran’s leverage in the Strait of Hormuz is being felt in Washington, as indicated by the distinction between Trump’s promises of “Infrastructure Week” during his first term and threats of “Power Plant Day and Bridge Day” during his second. If he’d like to return public focus to his accomplishments, however, he might post instead about the Trump Route for International Peace and Prosperity, which he announced at a landmark summit with the leaders of Armenia and Azerbaijan one year ago this week, which is now apparently a reality.

According to Armenian parliamentary speaker Ruben Rubinyan, “When the peace agreement was signed in Washington, skeptics did not believe that it would bring real peace. . . . Not only did we not remain in a dead end, we were the first to reap the benefits of lifting the blockade: We established connections with Azerbaijan via power lines and transport communications. The same thing happened with Turkey.” After decades of arming themselves for war, Yerevan and Baku are ready to bury the hatchet and reap the peace dividend.

The situation is very different in the Russia-Ukraine war, where each side is sabotaging the other’s economy to dubious strategic effect. Nikolai Mitrokhin writes in Republic that “Ukraine prefers to knock out marketplace warehouses and yet more oil refineries, and to chase dry-cargo ships loaded with grain, instead of addressing its most pressing problem: disrupting Russian missile production,” as a shortage of Patriot missiles has left its own cities exposed.

Russia’s home front is feeling the pinch, though. While the fuel crisis has subsided, Mitrokhin admits that “elevators are now refusing to accept grain, buyers are refusing to order it, and producers are left without the money to buy the fuel needed to harvest the remaining crop and, most importantly, to prepare for the fall sowing,” threatening next year’s production. Izvestia attempts to couch a modest uptick in unemployment as a positive, given that “a protracted labor shortage is increasing operating costs and inflation.” Mikhail Shevchuk ascribes the barring of Yabloko from the Duma elections to the Kremlin’s insecurity about the home front – not fear of revolt, but jealousy: “blind, paranoid, hysterical and prone to grotesque exaggeration.” Even the Wildberries strikes have impacted the Russian economy, in a way. Dmitry Goncharov reports the company has granted Chinese retailers a 95% discount off the registration fee, because “sellers are leaving the platform in droves after the attacks, and Wildberries is desperate.” Goncharov also explores Chinese truckers’ widespread practice of illegal cabotage – carrying goods from one Russian city to another, rather than unloading them for local teamsters to ship. This suggests a true end game for the Russia-Ukraine war: Whether the town ends up being called Pokrovsk or Krasnoarmeisk, it will simply become a way station on the Xi Route for Peace, serving trucks running between Manzhouli and Budapest.