Ukraine membership into the North Atlantic Treaty Organization (NATO) is disputed. Russia opposes Ukraine membership, while United States favors it. In 2021, Russia placed troops on the Ukraine Russia border. Russia's deployment sends a clear message it will prevent Ukraine membership into NATO. Russia is fighting to keep Ukraine out of NATO. United States is fighting to include Ukraine. Russia and United States are headed toward a declared war. If Ukraine is in NATO, then United States will have greater economic influence in the area. Otherwise, Russia will have influence. Since the end of communism, free market capitalism has emerged throughout eastern Europe. Russia and United States both want to influence these free markets.
Since the dispute, United States imposed economic sanctions on Russia (as early as 2014). Over time, sanctions have caused great harm to capitalism in Russia. In March 2022, the harm culminated when the Russian central bank was forced to increase interest rates from 9.5% to 20%. The exorbitant rate hike severely curtailed capital and economic activity, primarily lending and investment. The hope of free market capitalism in Russia was jeopardized into the unknown future.
The free markets of Ukraine were disrupted. In September 2022, Russia announced the annexation of southern Ukraine along the Black Sea. The decision was counter to capitalism and therefore hindered free markets. In January 2023, moreover, United States pledged to send military aid to defend Ukraine. Western European states agreed to send aid, as well. This military aid from Western Europe (NATO member states) trumpets an expansion to the rhetoric of war. Military intervention or even the rumor raises risk to investment and clutches spending and growth.
In May 2023, the G7, an informal group of advanced democracies, condemned Russia's aggression and agreed to penalize them with sanctions. The G7 commitment to sanctions on Russia augmented those placed independently by United States. On September 30, 2022, Ukraine applied for NATO membership. In July 2023, NATO decided to suspend Ukraine's application for membership until Ukraine and Russia end their war. However, at the same time, the admission of Ukraine into NATO moves United States and NATO members closer to war with Russia.
The Cold War ended in 1991. Communism was proven an obsolete economic system. In the 1990's, NATO began to expand East. By 2000, NATO welcomed eastern European countries, such as Poland, Hungary, and Czechia. In 2004, others followed, including the three Baltic Republics. In 2024, Sweden became the most recent member. NATO presently has thirty-two member states.
NATO is a political and military alliance among states. Article 5 of NATO explains the principle of security. That is, if one member state is attacked, then all member states fight in defense. NATO member states cooperate economically, but the purpose of NATO is not economic. The purpose is the security of Europe, which now extends into eastern Europe. However, a different understanding is needed for NATO's expansion into eastern Europe. In the 1990's, incoming President Vladimir Putin did not deny Russia's entry into NATO. Russia considered NATO membership; however, the idea was not oriented to historical reason.
Ukraine into NATO considers the membership of Russia. That is, as NATO expands into eastern Europe it will eventually incorporate Russia. However, Russian membership would have to precede Ukraine membership. Otherwise, the proximity of a Ukraine in NATO threatens Russia. Ukraine is a border state and a former subordinate partner in mutual security during the Cold War. NATO member states historically opposed eastern Europe (i.e., Warsaw Pact), which included Russia and Ukraine. Therefore, presently, the issue of NATO membership divides Ukraine and Russia on the issue of security. Ukraine will no longer be a partner (or aligned) with Russia, rather a partner with NATO member states. That is, until Russia becomes a member state; but this is not possible because Russia would become hostile to a Ukraine in NATO and therefore prevent their inclusion into NATO, a conundrum. Although, free markets exist in both Ukraine and Russia, Ukraine in NATO threatens eastern European security, and capitalism regionally and globally.
Seemingly, NATO decided it will not allow Ukraine as a member state until the war with Russia is concluded. Ukraine's pending application has further repeated the idea of war with America (and NATO) and increased risk to any economic activity with Russia, and elsewhere. If Ukraine becomes a member of NATO, then a wedge will be driven between Russia and Ukraine for a long time to come. Therefore, a Russian border threatened by Ukraine in NATO diminishes overall mutual security and economic activity.
Presently the conflict escalates, there is no viable solution to return to building free markets that enhance economic activity in the region. NATO's expansion East to include Ukraine has stifled Russian economic activity with western European member states. United States and G7 sanctions on Russia are taking a toll. Capitalism in Russia is necessary to induce economic activity with NATO member states. Sanctions which diminish capitalism erode the mutual security of all states in the region. Capitalism is a common denominator to facilitate security.
Security among states require adherence to the basic principle of capitalism. The common denominator of capitalism allows for economic activity. The flow of goods fosters exchange in free markets. Repeated exchange of goods allows for cohesion. Capitalism depends upon this movement, which glues economic systems of states in mutual exchange.
The addition of NATO membership can have a good outcome. Economic activity through NATO membership can increase capitalism, but NATO's historical relevance challenges our presumptions. Although, the idea that eastern Europe could not adopt capitalism is false; the sequence of admission of eastern Europe into NATO matters. The admission of Russia must be considered before Ukraine. If Russia is to be admitted, then more capitalism is needed.
