“What makes it so awful?'” asked my son at breakfast, dressed in his frog outfit for the school carnival. He was of course referring to the war in Ukraine. A good question, however naive it might sound.

The ‘awful’ that I am dealing with professionally, is the economic sort of awful. The impact on the global economy, on financial markets and investments. More than enough has already been said and written about this and much is still unknown. Important, of course, but also very technocratic, detached and mainly focused on the financial impact that it will have for us. And cynical, too. Because the underlying awfulness is that instead of better, things will get worse for a lot of people. And this time not because of a natural disaster or a virus, but because even in 2022 power still corrupts.

But that would not have made things any clearer to my son. Mr. Frog wanted a more concrete answer. “So if you don’t do what somebody else tells you to, he will shoot you? If my dog won't sit, I kill him?” Yes, that sort of awful. The awfulness of pointless power politics that only gives enjoyment to the powerful and causes nothing but suffering for the rest of the population. From cannon fodder to poverty. But that is what it has always been like throughout history.

But the worst awfulness is that we in the West, and especially in Europe, have been so naive. That all this time we put economic gain before the interests of peace and security. This proves once again that there is a conflict between our guiding principle - the economy and free, efficient markets - and the guiding principle in countries such as Russia. Those principles are generally not focussed on achieving material wealth, free trade, and other economic interests.

Putin said goodbye to all that a long time ago. What he is after, is personal status or power. The economy is only a means.

Hopefully we will also learn this at some point. That we can also use the economy to create peace and security. By financing what is good for us and excluding what constitutes a threat. That markets in themselves are value-less, seeking for the cheapest, most efficient outcome, but have flaws that conflict with our human values. Financial warfare as a weapon in a battle that we had long forgotten about. By becoming less dependent on countries that cannot be trusted. Our own supply of energy and commodities because that is the best guarantee for more stability.

I know, economists would normally advocate free trade. I do too. But if unreliable partners abuse it, we have only one option. Sacrifice material wealth and trade in the interest of peace. Because losing that would be the worst awfulness of all. Especially for a 10-year-old frog. But I dare not tell him that.

This is a translation of Hans Stegeman's column in Het Financieele Dagblad, published March 1st, 2022.