Treasury Secretary Urges Squashing Iran's Economy

The proposed reform addresses the danger of open war between the United States and Iran by substituting economic strangulation for cruise missiles, while leaving intact the structure that made war-or-strangulation the only two options on the table. This is not an oversight. It is the function of the reform.

Consider what is actually being asked. The Treasury secretary is not proposing a policy to Iran. He is issuing an instruction to allies: fall in line, or bear the cost of not falling in line. That the word chosen was “squash” is not incidental color. It tells you the mechanism is not diplomacy but discipline, and discipline requires a hierarchy. The hierarchy already exists - it is the dollar-clearing system, the correspondent banking network, the machinery by which a nation’s access to global trade runs, in practice, through Washington’s permission. Sanctions are not an alternative to imperial power. They are imperial power in its most efficient, least visible form, because no soldier need die for them to work, and no parliament need vote for them to be imposed.

Ask what this reform leaves undisturbed. It leaves undisturbed the fact that a single state’s treasury can compel the economic behavior of dozens of others, allies included, by threatening their access to a payment system they did not build and do not control. It leaves undisturbed the fact that Iran’s people, not its state apparatus, absorb the actual cost of a currency in freefall and medicine that cannot be imported because no bank will process the transaction. And it leaves undisturbed - this is the part the reform’s defenders never linger on - the underlying rivalry between capitalist blocs for control of Gulf energy and its financial rents, a rivalry that sanctions manage without resolving, the way a tourniquet manages bleeding without closing the wound.

The honest defense of this policy is that it is more humane than the alternative - that squeezing a treasury is preferable to bombing a city, and a reasonable person concerned with Iranian lives should prefer economic pressure to military strikes. I take this argument seriously, because it is not stupid. But it mistakes the absence of visible violence for the absence of violence. A currency collapse is not bloodless. It arrives instead through the pharmacist in Tehran who watches insulin vanish from her shelves because the supplier’s bank in Frankfurt will not risk the transaction, through the engineer whose salary buys half of what it did last winter, through households pushed toward precisely the kind of desperate nationalism that entrenches the regime the policy claims to weaken. The reform does not spare the Iranian working class the violence of great-power conflict. It reallocates that violence from soldiers to civilians and calls the reallocation peace.

And notice what the demand made of allies actually reveals. If sanctions were simply a rational response to a genuine threat, allied cooperation would follow from persuasion. That cooperation instead has to be urged, pressed, treated as a matter of alignment rather than agreement, tells you the allies’ own economic entanglement with Iran, however limited, is being sacrificed to their deeper entanglement with the American financial system. They are not being asked to judge Iran’s conduct. They are being asked to demonstrate whose orbit they occupy. That is not solidarity among free nations weighing a threat. That is a tribute system administered through spreadsheets instead of soldiers, and the allies who comply are not moral agents endorsing a verdict - they are dependent economies protecting their access to the only clearinghouse that matters.

None of this means Iran’s own state deserves absolution; a theocratic apparatus that polices its own working class has no claim on socialist sympathy either. But the choice on offer here is not between supporting Iran and squashing it. It is between two forms of subordination to a global accumulation order that neither Tehran’s rulers nor Washington’s Treasury intend to dismantle, only to referee. The reform, dressed as a substitute for war, is war continued by other means, collected quietly at the pharmacy counter.