Friday, March 4, 2022

Putin in Ukraine: The Mouse that Roared


Putin's invasion of Ukraine seems to defy logic. From The Long View perspective, based on analyzing societal performance over time, it is a crystal-clear example of perverse incentives at work. Putin got a 620 billion USD war chest from the hikes in oil price provoked by his previous military invasions of Crimea and Georgia. Those billions went to his war chest to cover military expenses, further military buildup, cover the finances of his failing economy, and feed a corrupt oligarchy that includes Putin himself.

Armchair psychologists' analyses about Putin's personality or madness are both puerile and irrelevant. If anything, Putin's behavior and decisions are perfectly rational responses to a perverse incentives system that reminds that of the old Peter Sellers film The Mouse that Roared. In the film, a small Andorra-like European country declares war on the US, seeking to be occupied and rebuilt with American aid.

Putin is doing exactly the same calculation: war pays in higher oil revenues and increased bargaining power with an oil-dependent EU. 

Iran builds nuclear armament for the same reason. Sanctions are compensated with higher oil prices and bargaining power. Pakistan built and supports the Taliban and fundamentalist terrorism to get US aid to... fight them -not too hard-

Let's remember a simple principle of human and societal performance:

behavior is a function of consequences

And ask two fundamental questions:
  1. Are there rewards for bad behavior?
  2. Are there punishments for good behavior?
Obviously, Putin received 620 billion dollars for 1. and complains about 2, explaining that if he does nothing, NATO enrolls former allies around Russia, turning them into viable threats and rivals.

It doesn't take a Nobel laureate to figure this out. Just looking from The Long View perspective and using a little societal performance analysis.

How can you stop Putin?

Just put a real punishment or disincentive to his military adventures. Not sanctions, but cheap oil. If the US opens its shale spigot as it did before, oil prices can go down fast enough to paralyze the Russian tanks on their tracks. Just a credible announcement from POTUS would change Putin's personality on a dime (or a few billions more)


Why is it so hard, then?

The answer is simple: domestic   US and EU politics.

US: 
Biden has outsourced his energy policy to his Left, putting dogma before results. Shale is bad, green is good, and Putin knows it and exploits that weakness.

EU
Here green dogma has been the law for years and special interests pushing wind, solar and other green industries blocked shale long ago, More dramatically, outsourced energy to... Putin, who has now control over the gas spigots to force the EU into a quick surrender,  toasting with Vichy water.

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