In the wake of President Reagan's decision last week to impose a trade embargo on Nicaragua, it is worth recalling what an earlier Republican president wrote in his memoirs about a previous use of "the economic weapon."
Referring to the post-World-War-I allied trade embargo against Germany, which was undertaken to force the defeated country to surrender its merchant-marine fleet, Hoover wrote: "The effect was to poison the minds of the people and sow the dragon's teeth of war."
That embargo was eventually lifted -- less out of kindness to starving Germans than worry about the possible spread of Bolshevism to the prostrate nation. But Hoover's words well described how politically dangerous (and diplomatically counter-productive) trade sanctions have frequently been in this century.
A U.S. trade embargo imposed in October 1960 has not crippled Cuba. It has, however, tied the Cuban economy closely to Russia, deprived Americans of Cuban cigars and removed one of the traditional markets for Louisiana rice.
Embargos against South Africa, Rhodesia (Zimbabwe), the Soviet Union, Vietnam and other countries have not yielded much better results. As the Arab oil-producing countries learned when they embargoed oil shipments to the United States in 1973 and touched off the oil-conservation movement that has contributed to the present glut, trade sanctions often produce unanticipated results.
Is there some motive -- other than forcing political change in Managua -- behind last week's initiative against the Sandinista government? That question arises because the Reagan administration itself is keenly aware of the difficulties of using trade sanctions to achieve political ends.
Secretary of State George Shultz himself last week indicated that he had reservations about the effectiveness of the U.S. action. This administration has learned of the potential hazards through hard experience.
In April 1981, in one of his first major acts, President Reagan lifted the partial embargo on grain sales to the Soviet Union that President Carter had imposed in 1980 in retaliation for the invasion of Afghanistan. Reagan termed the embargo -- which hurt American farmers and cost Carter politically in farm states -- an "ineffective national policy." An aide described the lifting of the export restrictions as a "principled decision."
The following December, Reagan imposed his own trade embargo against the Soviets, banning the shipment of U.S. natural-gas-pipeline equipment and technology to Russia as punishment for the suppression of Poland's Solidarity labor movement.
The embargo looked like a textbook case of effective trade sanctions. The Soviets needed gas pipelines in order to earn money from energy customers in the West. They lacked crucial equipment and technology, such as the turbines to pump the gas through the pipes. And U.S. companies held the key patents on the manufacturing technology.
But the textbook case quickly turned into a near fiasco. The embargo set off a dispute between the United States and its closest European allies, several of which were adamant about carrying out plans to ship turbines and other technology to the Soviets. Representatives of the U.S. business community, initially supportive of the president, argued that the administration's intervention was raising serious doubts abroad about the sanctity of U.S. business contracts.
According to Ed Hewett, a senior fellow at the Brookings Institution specializing in communist economies, the embargo "lit a fire under the gas-turbine industry in the Soviet Union." Rather than slowing up the pipeline, work on it subsequently proceeded faster than U.S. experts anticipated.
"You might call it the Reagan Memorial Gas Pipeline," says Hewett.
In the case of the Nicaraguan embargo allied support has been similarly lacking, as the administration knew it would be.
Some allied officials have expressed amazement that Reagan would justify his action on grounds of "national emergency." West German Foreign Minister Hans-Dietrich Genscher, making clear that his country would not join the United States, noted that trade sanctions failed to produce political change in Cuba or Poland.
Other elements needed for success are also lacking.
It does not deprive Nicaragua of commodities or technology over which the United States has a monopoly. Nicaragua's imports from the United States, though substantial, consist mainly of agricultural chemicals, fertilizer and other commodities obtainable elsewhere.
Long before last week's announcement, the administration had cut Nicaragua's quota of U.S. beef and sugar imports sharply. The value of those shipments had fallen to $13 million a year, compared with more than $90 million in 1980.
Since the administration knows all this, why did it act? Why, given the long odds against the embargo's forcing internal political changes, did the United States impose the sanctions?
Senior officials note that Congress said it would not provide aid to the anti-Sandinista contra guerrillas until non-military options were exhausted. The president, they said, was taking up Congress's challenge. And, after the defeat of his requests for aid to the contras, he wanted to act decisively.
Administration officials said the embargo was meant to send a "strong signal," and "get the attention" of the Sandinista regime.
However, some critics of the administration's Central American policies suggest that the real effect could be to speed up Nicaragua's transformation into the kind of Soviet clone that the Reagan administration say it already is.
Robert A. Pastor, a former aide to President Carter who specializes in Latin America, predicted that the big losers will be Nicaraguan middle- class businessmen and farmers who continue to rely on U.S. trade and who are staunch supporters of retaining a market economy.
The most likely scenario, in Pastor's view, is that Nicaragua will shift more of its trade to the Soviet bloc over the next six months to a year and that frictions within the Nicaraguan political system and bureaucracy will be muted rather than increased by the U.S. economic threat.
While the administration's action confirms Nicaraguan hard-liners in their belief that Washington is the enemy, the Nicaraguan response to the embargo is likely to confirm the administration's view that it is dealing with a Soviet puppet government.
"What you have here are interacting self-fulfilling prophecies," says Pastor.
If so, the U.S. economic weapon will have helped make Nicaragua into the very thing that Reagan has said it is all along.