Sunday, August 14, 2016

Political science and craziness Part V: Demanding too much

In the Political science and craziness series, I have been examining the bargaining leverage that a person can get by appearing but not being crazy.  Someone who appears crazy can credibly threaten to do something that no sane person could credibly threaten to do, and thereby extract concessions, but if that person actually is crazy, eventually he will get his comeuppance.

When we left off in Part IV, we were talking about Donald Trump's willingness to carry out threats, even to the point of self-destructiveness.  His policy platform consists of threats in the international arena of, shall we say, excessive military force, withholding defense of our NATO allies, and instigating trade wars.  Each of these, if carried out, would be harmful, not just to the recipient of Trump's threats, but to the U.S., but Trump would carry them out, to the degree that he could, because his primary goal is that he be perceived as strong, which means never allowing his credibility to be challenged.  So, regardless of the blowback to the U.S., he would carry out his threats because to do otherwise would be to make him, personally, look weak.

The next question, then, is this: what could he extract based on his willingness to carry out these, frankly, insane threats?  There is no simple answer because it depends on the circumstance.  The real question is whether or not Trump could tell the difference.  So, let's go back to the crazy guy with the bomb scenario from Part I.  Crazy guy with a bomb walks up to me and demands my watch, or he'll detonate a bomb.  If I think he's crazy enough, I hand over my watch.  What if, instead of my watch, he demands my whole arm?  Um, I don't know how to detach that.  If he's totally committed to carrying out the threat, we're both screwed.  Even if he comes prepared with a machete, demanding that I do the deed myself, I'm not sure I have the physical capacity to do it, and I know I don't have the psychological capacity to do it.  We're still screwed.

The point, then, is that an unreasonable demand, backed up with a threat that would be self-destructive, if carried out, is a bad combination.  And this is where we really have to go back to Thomas Schelling's The Strategy of Conflict.  The argument is based on the distinction between appearing crazy and actually being crazy.  This is where the rubber hits the road.

Are Trump's threats credible?  Yup.  He is committed to perceptions of strength, which means he cannot back down.  That is why he never admits error, never apologizes, no matter how far he goes, etc.  That means he would have to carry out his threats, no matter how self-destructive they are.  In Schelling's terms, that's bargaining power!  The problem comes if he thoughtlessly makes threats associated with demands that cannot be met, only to find himself backed into a corner by his own impulsiveness.  How could this work?

Trump believes that having a trade deficit is "losing" at trade.  This is, um, idiotic. Trump's zero-sum view of the world is precisely what leads to that rigged election nonsense (see my zero-sum series).  Regardless, suppose Trump idly demands that Country X lower our trade deficit with them, or he'll do something stupid and self-destructive.  Since a trade deficit is the result of individual trades between private buyers and sellers, that is actually hard for a government to affect directly, making it difficult for the government of Country X to meet Trump's stupid demand.  Trump is then backed into a corner, and is forced to do the stupid, self-destructive thing he threatened to do because he made a demand that couldn't be met.

And even if the government of Country X institutes exactly the policy that Trump wants, what if it doesn't affect the trade deficit, which is the aggregation of private transactions?  Trump may still think he has to carry out his threat to maintain his credibility, which, as discussed in Part IV, matters more to him than the end goal anyway.

If you want to understand threats and their application, then, you really need to read Thomas Schelling's The Strategy of Conflict.  Self-destructive threats can be useful, but making them credible can be difficult.  They can be made credible, strangely, by convincing one's adversaries that one is...

The problem is that someone who is, like that asteroid, not entirely stable, will eventually undermine himself.  As questions continue to be asked, so to speak, about Donald Trump, it is worth thinking about him in Thomas Schelling's terms.  Trump makes a lot of threats, and his threats probably do have credibility, regardless of how self-destructive it would be for him to carry them out.  His campaign is, after all, self-destructing as I type.  Nevertheless, his impulsiveness could easily lead him to make threats based on demands that simply could not be met, and his commitment to credibility might lock him into carrying out self-destructive threats, to the degree that he could.

Predicting what Donald Trump would or would not do as president, though, is not only a hypothetical built around a 20% chance (based on PredictWise this morning), it is almost absurdly difficult given that recklessness and impulsiveness have been his defining features for the last year, and not in a Han Solo kind of way.

The point of this series, though, is to show the importance of Schelling, and why we study threats, credibility, and what is sometimes called the madman theory.  I would not dare to predict what a hypothetical President Trump would actually do.  But, I bet Schelling would sell a lot more books.

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