9 ms·

Something that has been bugging me for some time (genuine question, please forgive me lack of geopolitics/economy understanding) is this: Supposing we want to

by vondro 4y ago

Something that has been bugging me for some time (genuine question, please forgive me lack of geopolitics/economy understanding) is this: Supposing we want to hurt Russian economy - how are we hurting it by stopping selling them licenses/branding/machines to make and sell burgers and fries? Are we not ripping them off money if we sell to them? As in: we gain, they lose? I understand we don't want to sell advanced technology, or weapons. And we also want to stop buying oil/gas or other goods produced in Russia. But burgers? If you understand what's going on, please share it :-)

k__ 4y ago
Probably just the hope of companies to improve their image by not being associated with such countries. I mean, look how people think about companies doing China's bidding.
giancarlostoro 4y ago
The only argument there is we are providing them jobs and building up local infrastructure by investing in locations, I suppose.
asddubs 4y ago
we can't let proprietary american advanced protein delivery technology to fall into the wrong hands, allowing them to use it to create an army of super soldiers
parshua 4y ago
From what I understand, it has nothing to do with morality or hurting Russia. The banking sanctions make it impossible to do financial transactions with the country, which effectively puts an stop on business relations.
chongli 4y ago
For a globally recognizable brand like McDonald's, the move to leave the country has a symbolic meaning. It sends a message to the Russian people that something is deeply wrong with the direction taken by their government. Of course, some Russians will interpret the move differently, but that cannot be avoided.
- ushakov 4y ago
  > Of course, some Russians will interpret the move differently Russian propaganda will say something like: “McDonalds, evil American company, left our people without jobs and betrayed our trust” most people would believe this the blame will be shifted from Russian Government to “evil American corporation”
  - jquery 4y ago
    Sure, but not everyone is convinced by the propaganda. Some people are just plain mad they don’t have something they used to have. We’ve tried appeasing a mad expansionist dictator in the past, didn’t go so well. This is especially keen with apple products.
    - ushakov 4y ago
      Apple products can be brought from overseas with McDonalds they would just make a clone which uses same formulas and suppliers
      - adventured 4y ago
        It's about removing sanction: denying the Russians - particularly the urban Russians - their veneer of civilization, affluence, westernization. The notion that they had accomplished something material positive in regards to moving forward in the world among nations after the Soviet collapse. Sure they can clone brands, and sometimes they can clone products and services, you can also go to Walmart and buy Great Value brand products that are 85% as good as the brand goods. Most people still don't want to do that if they can afford not to. People buy brands primarily (not exclusively) for social reasons of status, not because they're vastly superior to all alternatives (off brands, generics, house brands, etc). They don't need that Chanel or Louis Vuitton bag, or iPhone, they want it to show off. Removing sanction is about the West no longer pretending Russia is a civilized nation, no longer pretending their culture is a civilized one (rather than a barbarous relic of the conquest-obsessed primitive past of the European great powers conflicts).
ushakov 4y ago
i think what’s going on is that lots of companies have collectively left on their own (not sanctions) and McDonalds is being “bullied” to leave too, possibly by their shareholders the case here might be that they don’t want to devalue their brand, which is worth far more than their business in Russia
aynyc 4y ago
It's about image. The most powerful weapon the west has isn't nuclear bomb but its culture and image. McDonald's business is a drop in the bucket in the tax revenue for the Putin regime. But if you (Putin) wants to claim that Russia is a powerful country, it needs to project an image of wealth, stability, etc.. McDonald, Starbucks, etc helps with that image.
- Beltiras 4y ago
  Playing word association the word that doesn't come to mind when you say "McDonalds patrons" is wealthy.
  - rswail 4y ago
    Only a relatively wealthy population can afford fast food. The "convenience" of fast food is something that poor people (actually poor, not Western poverty) can't afford. So yes, in the US/EU etc, McDonalds is seen as "cheap" food, but in places like Asian countries like Thailand, McDonalds is considered "middle class".
twoquestions 4y ago
It's probably much simpler than that. If Putin's going to keep invading other countries for little or no reason, what's that nutbar going to do to your property? There's a $20 term for this but I forget what it is. In addition to the reasons others here have said, of course.
alaricus 4y ago
Sanctions don't work. The goal of sanctions is not to hurt Russia. The only thing sanctions accomplish is to give a feeling of self-righteousness.
- rswail 4y ago
  Sanctions when applied properly can work. They need to actually impact directly on those who are politically powerful, while also imposing difficulties day-to-day on the general population, which encourages unrest and internal disputes. Russia thought it had protected itself by having low foreign debt and large foreign reserves. What it didn't count on was that the US and EU reserve banks would freeze its foreign reserves, while also getting SWIFT and the MC/Visa payment networks to disconnect from the Russian banking system. There currently is no alternative for foreign currency exchange and Russia has had to engage in much less efficient and expensive (because they are being made to pay through the nose) foreign exchange through China's nascient payment systems, which means they are exchanging rubles for yuan, instead of USD/EUR.
  - alaricus 4y ago
    India, Turkey, China and others are switching to alternative payments for Russian commodities. Europe is opening Ruble accounts with Gazprombank to keep the gas flowing. These sanctions hurt the monopoly of American financial system more than anyone else.
deleted 4y ago
[deleted]
boole1854 4y ago
Well, McDonalds, Inc. is not necessarily doing this to hurt the Russian economy. They are doing it to save money. The war and the Western sanctions have limited their ability to operate restaurants in Russia. Because of this, they have shut down their restaurants while continuing to pay staff, leases on their buildings, etc. This means they have a constant outflow of cash to Russia which they want to stop. Shutting down the business stops the bleeding. Perhaps the question is: why would public policy makers in the West want to impose such broad sanctions? Why not continue to allow Western companies to profit in Russia (i.e., "rip them off")? The answer is primarily that voluntary economic business transactions like this are generally win-win for both sides. Yes, McDonalds earns money selling branding, etc., but the Russians on the other side of the transaction also earn money through the use of the branding and so on. By cutting off Western companies' financial access to the Russian market, it does hurt the Western companies, but it also hurts the Russians because it deprives them of whatever benefits they were obtaining from the Western companies.
- deleted 4y ago
  [deleted]
mhb 4y ago
Is your premise that when two parties trade, the selling party "wins" and the buying party "loses"? Ignoring the specifics of McDonald's, in general, the reason to make a trade is that both parties believe they will be better off. By not trading, it hurts both parties.
Feriti 4y ago
I would not underestimate how critical influence is. Influence / knowledge how to operate big chains,.how to organize supplier how to do marketing etc. If you are a smart modern person speaking English also makes it easier for you to stay in your country when you have appropriate job opportunities and a ecosystem which feels adequate. It's not that I would miss McDonald's if it would disappear were I live bit if a lot more does, I would probably want to migrate away. I think this is a bad sign for Russia. And IF they are able to recreate what they already had, it will take time and be costly.
octodog 4y ago
The basic premise in market economies is that if a transaction occurs it is beneficial for both the buyer and the seller. This makes intuitive sense if you think about it - nobody forces you to buy McDonald's, you do so because you think a Quarter Pounder is worth the price you pay. Sanctions work by preventing this transaction from happening, which means both the buyer and the seller are worse off compared to when they are allowed to trade. The key point here is that although both the buyer and the seller are worse off, one party may be disproportionately impacted. This is the case with the Russian sanctions, as Western companies can usually find other markets (although less lucrative) but Russia is now having serious trouble sourcing certain components. McDonald's is likely doing this for image reasons or to appease stakeholders rather than doing it to punish Russia directly, but the outcome is that Russians are slightly worse off than before.
- isleyaardvark 4y ago
  It's also cumulative. It's only one market for each individual seller, but the buyer is deprived of many sellers.
LeifCarrotson 4y ago
The transaction can be mutually beneficial: We gain cash worth more to us than the licenses/branding/machines, they gain licenses/branding/machines worth more to them than the cash. For the classic example, see: https://en.wikipedia.org/wiki/Comparative_advantage#Ricardo's_example https://en.wikipedia.org/wiki/Comparative_advantage#Ricardo'... Cutting them off from the global economy does damage their economy. No, burgers aren't as important as banking or bullets, but it's something.
raxxorraxor 4y ago
Are you suggesting that countries that allowed McDonald's to operate are getting ripped off? Sounds entirely reasonable.
jccalhoun 4y ago
There are a few things: it looks bad if McDonalds is still doing business with them. also, for a lot of people having big brands makes you seem more legitimate - 20 years ago or so the small town near me got a McDonalds and it was a huge deal that made people think the town was more legitimate. there is also the fact that doing business in russia right now may be more trouble than it is worth and as far as hurting the economy, even though McDonalds corporate would make money from selling in Russia, they are paying the employees, distributors, utility companies and so on. So not getting that cut will hurt people. Yes, it probably won't hurt the rich or powerful but it may be part of death by a thousand cuts.
EVa5I7bHFq9mnYK 4y ago
There is a moral/reputational side to this too.
InCityDreams 4y ago
And I'll add "What changed here of course is that after Putin...." started getting his arse kicked, several western companies now dont wish to be seen as Russian-friendly (they still are, of course - they just don't wish to be seen as such). Had the Ruskies taken the ukraine in a few days, as predicted, you can bet there'd be golden arches all-the-fuck over Mariupol right now. *oh, and finland and sweden could get fucked, too. They didn't give a hoot until for quite several years. If any western company actually gave a crap, they would have been out on day 1, or 7 or even 30...not 3 months later. And, as for Renault being called out by Zelensky.....
rightbyte 4y ago
Closing McDonalds surely is a good for the general health of the populace. I'm against banning fast food but I see no downside. McDonalds is a symbolic offender in the sugar epidemic and the McPutin rippoff surely won't be as popular as the Big Mac.

by vondro 4y ago

k__ 4y ago

Probably just the hope of companies to improve their image by not being associated with such countries. I mean, look how people think about companies doing China's bidding.

giancarlostoro 4y ago

The only argument there is we are providing them jobs and building up local infrastructure by investing in locations, I suppose.

asddubs 4y ago

we can't let proprietary american advanced protein delivery technology to fall into the wrong hands, allowing them to use it to create an army of super soldiers

parshua 4y ago

From what I understand, it has nothing to do with morality or hurting Russia. The banking sanctions make it impossible to do financial transactions with the country, which effectively puts an stop on business relations.

chongli 4y ago

For a globally recognizable brand like McDonald's, the move to leave the country has a symbolic meaning. It sends a message to the Russian people that something is deeply wrong with the direction taken by their government. Of course, some Russians will interpret the move differently, but that cannot be avoided.

ushakov 4y ago
> Of course, some Russians will interpret the move differently Russian propaganda will say something like: “McDonalds, evil American company, left our people without jobs and betrayed our trust” most people would believe this the blame will be shifted from Russian Government to “evil American corporation”
- jquery 4y ago
  Sure, but not everyone is convinced by the propaganda. Some people are just plain mad they don’t have something they used to have. We’ve tried appeasing a mad expansionist dictator in the past, didn’t go so well. This is especially keen with apple products.
  - ushakov 4y ago
    Apple products can be brought from overseas with McDonalds they would just make a clone which uses same formulas and suppliers
    - adventured 4y ago
      It's about removing sanction: denying the Russians - particularly the urban Russians - their veneer of civilization, affluence, westernization. The notion that they had accomplished something material positive in regards to moving forward in the world among nations after the Soviet collapse. Sure they can clone brands, and sometimes they can clone products and services, you can also go to Walmart and buy Great Value brand products that are 85% as good as the brand goods. Most people still don't want to do that if they can afford not to. People buy brands primarily (not exclusively) for social reasons of status, not because they're vastly superior to all alternatives (off brands, generics, house brands, etc). They don't need that Chanel or Louis Vuitton bag, or iPhone, they want it to show off. Removing sanction is about the West no longer pretending Russia is a civilized nation, no longer pretending their culture is a civilized one (rather than a barbarous relic of the conquest-obsessed primitive past of the European great powers conflicts).

ushakov 4y ago

i think what’s going on is that lots of companies have collectively left on their own (not sanctions) and McDonalds is being “bullied” to leave too, possibly by their shareholders the case here might be that they don’t want to devalue their brand, which is worth far more than their business in Russia

aynyc 4y ago

It's about image. The most powerful weapon the west has isn't nuclear bomb but its culture and image. McDonald's business is a drop in the bucket in the tax revenue for the Putin regime. But if you (Putin) wants to claim that Russia is a powerful country, it needs to project an image of wealth, stability, etc.. McDonald, Starbucks, etc helps with that image.

Beltiras 4y ago
Playing word association the word that doesn't come to mind when you say "McDonalds patrons" is wealthy.
- rswail 4y ago
  Only a relatively wealthy population can afford fast food. The "convenience" of fast food is something that poor people (actually poor, not Western poverty) can't afford. So yes, in the US/EU etc, McDonalds is seen as "cheap" food, but in places like Asian countries like Thailand, McDonalds is considered "middle class".

twoquestions 4y ago

It's probably much simpler than that. If Putin's going to keep invading other countries for little or no reason, what's that nutbar going to do to your property? There's a $20 term for this but I forget what it is. In addition to the reasons others here have said, of course.

alaricus 4y ago

Sanctions don't work. The goal of sanctions is not to hurt Russia. The only thing sanctions accomplish is to give a feeling of self-righteousness.

rswail 4y ago
Sanctions when applied properly can work. They need to actually impact directly on those who are politically powerful, while also imposing difficulties day-to-day on the general population, which encourages unrest and internal disputes. Russia thought it had protected itself by having low foreign debt and large foreign reserves. What it didn't count on was that the US and EU reserve banks would freeze its foreign reserves, while also getting SWIFT and the MC/Visa payment networks to disconnect from the Russian banking system. There currently is no alternative for foreign currency exchange and Russia has had to engage in much less efficient and expensive (because they are being made to pay through the nose) foreign exchange through China's nascient payment systems, which means they are exchanging rubles for yuan, instead of USD/EUR.
- alaricus 4y ago
  India, Turkey, China and others are switching to alternative payments for Russian commodities. Europe is opening Ruble accounts with Gazprombank to keep the gas flowing. These sanctions hurt the monopoly of American financial system more than anyone else.

deleted 4y ago

[deleted]

boole1854 4y ago

Well, McDonalds, Inc. is not necessarily doing this to hurt the Russian economy. They are doing it to save money. The war and the Western sanctions have limited their ability to operate restaurants in Russia. Because of this, they have shut down their restaurants while continuing to pay staff, leases on their buildings, etc. This means they have a constant outflow of cash to Russia which they want to stop. Shutting down the business stops the bleeding. Perhaps the question is: why would public policy makers in the West want to impose such broad sanctions? Why not continue to allow Western companies to profit in Russia (i.e., "rip them off")? The answer is primarily that voluntary economic business transactions like this are generally win-win for both sides. Yes, McDonalds earns money selling branding, etc., but the Russians on the other side of the transaction also earn money through the use of the branding and so on. By cutting off Western companies' financial access to the Russian market, it does hurt the Western companies, but it also hurts the Russians because it deprives them of whatever benefits they were obtaining from the Western companies.

deleted 4y ago
[deleted]

mhb 4y ago

Is your premise that when two parties trade, the selling party "wins" and the buying party "loses"? Ignoring the specifics of McDonald's, in general, the reason to make a trade is that both parties believe they will be better off. By not trading, it hurts both parties.

Feriti 4y ago

I would not underestimate how critical influence is. Influence / knowledge how to operate big chains,.how to organize supplier how to do marketing etc. If you are a smart modern person speaking English also makes it easier for you to stay in your country when you have appropriate job opportunities and a ecosystem which feels adequate. It's not that I would miss McDonald's if it would disappear were I live bit if a lot more does, I would probably want to migrate away. I think this is a bad sign for Russia. And IF they are able to recreate what they already had, it will take time and be costly.

octodog 4y ago

The basic premise in market economies is that if a transaction occurs it is beneficial for both the buyer and the seller. This makes intuitive sense if you think about it - nobody forces you to buy McDonald's, you do so because you think a Quarter Pounder is worth the price you pay. Sanctions work by preventing this transaction from happening, which means both the buyer and the seller are worse off compared to when they are allowed to trade. The key point here is that although both the buyer and the seller are worse off, one party may be disproportionately impacted. This is the case with the Russian sanctions, as Western companies can usually find other markets (although less lucrative) but Russia is now having serious trouble sourcing certain components. McDonald's is likely doing this for image reasons or to appease stakeholders rather than doing it to punish Russia directly, but the outcome is that Russians are slightly worse off than before.

isleyaardvark 4y ago
It's also cumulative. It's only one market for each individual seller, but the buyer is deprived of many sellers.

LeifCarrotson 4y ago

The transaction can be mutually beneficial: We gain cash worth more to us than the licenses/branding/machines, they gain licenses/branding/machines worth more to them than the cash. For the classic example, see: https://en.wikipedia.org/wiki/Comparative_advantage#Ricardo's_example https://en.wikipedia.org/wiki/Comparative_advantage#Ricardo'... Cutting them off from the global economy does damage their economy. No, burgers aren't as important as banking or bullets, but it's something.

raxxorraxor 4y ago

Are you suggesting that countries that allowed McDonald's to operate are getting ripped off? Sounds entirely reasonable.

jccalhoun 4y ago

There are a few things: it looks bad if McDonalds is still doing business with them. also, for a lot of people having big brands makes you seem more legitimate - 20 years ago or so the small town near me got a McDonalds and it was a huge deal that made people think the town was more legitimate. there is also the fact that doing business in russia right now may be more trouble than it is worth and as far as hurting the economy, even though McDonalds corporate would make money from selling in Russia, they are paying the employees, distributors, utility companies and so on. So not getting that cut will hurt people. Yes, it probably won't hurt the rich or powerful but it may be part of death by a thousand cuts.

EVa5I7bHFq9mnYK 4y ago

There is a moral/reputational side to this too.

InCityDreams 4y ago

And I'll add "What changed here of course is that after Putin...." started getting his arse kicked, several western companies now dont wish to be seen as Russian-friendly (they still are, of course - they just don't wish to be seen as such). Had the Ruskies taken the ukraine in a few days, as predicted, you can bet there'd be golden arches all-the-fuck over Mariupol right now. *oh, and finland and sweden could get fucked, too. They didn't give a hoot until for quite several years. If any western company actually gave a crap, they would have been out on day 1, or 7 or even 30...not 3 months later. And, as for Renault being called out by Zelensky.....

rightbyte 4y ago

Closing McDonalds surely is a good for the general health of the populace. I'm against banning fast food but I see no downside. McDonalds is a symbolic offender in the sugar epidemic and the McPutin rippoff surely won't be as popular as the Big Mac.