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Business News/ Opinion / Some clues from game theory on what Putin might do next
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Some clues from game theory on what Putin might do next

The incentive logic of deterrence may fail if he’s solely after power

Putin is seen as a rational player but Nato may need to review its response (Photo: AP)Premium
Putin is seen as a rational player but Nato may need to review its response (Photo: AP)

As tensions heighten between Russia and Ukraine [with Moscow having amassed military forces on the Russian border with the smaller country amid a stand-off with the West, as defined by membership of the Nato alliance], so does the importance of understanding the mindset of Russian President Vladimir Putin. In this context, two major questions are of particular concern: Is he rational? And can he be deterred?

As I like to say sometimes, it’s time for some game theory. The answers to the two above posers, unfortunately, are: Yes and no. That is, the Russian leader is probably rational and cannot easily be deterred.

Economists typically define rationality as the effective use of means to achieve ends—spending your money for maximum enjoyment, for example. That is fine for some purposes, but it fails when it comes to understanding those political leaders, Putin included, who appear obsessed with power.

The economic framework of rationality doesn’t work well when power is the end itself. While no one can truly know what’s on the mind of Putin, he has ruled Russia for 22 years, a pretty good sign that he cares about power. Putin also grew up in an era—as a KGB agent behind the Iron Curtain of the Cold War era—when power was the currency of status.

So how does the quest for power make Putin difficult to deter?

Deterrence, by its nature, attempts to limit the power of the deterred person. If a person cares about many things, not just power, the individual will respond to deterrence by seeking less power and spending more on other things, such as quiet contemplation or time with one’s family. If a person cares mainly about power, however, the induced response to deterrence is to try seizing more of it.

In other words, trying to make power ‘more expensive’ for Putin is not guaranteed to work. The price of enjoying power might go up—say, because of threatened sanctions—but the thirst for renewed power goes up too, precisely because some power has been taken away.

Deterrence does not always work in international affairs, or in other situations with power-mad individuals. Napoleon and Hitler faced high costs from their blunders, but still they proceeded with ambitious and ultimately foolish military plans. Many revolutionaries try to seize power and die doing so.

An ideal method of deterrence would be to threaten Putin with heavy penalties for attacking Ukraine, while giving him a corresponding increase in power somewhere else. Where might that be? The US does not want trouble in the Baltics, nor does it want Russia to have a stronger military presence in Venezuela and Cuba, as Putin has threatened. Over time, there will be fewer and fewer acceptable ways of distracting Russia’s leader from larger and more dangerous prizes.

Threatening Putin with nuclear annihilation would, in principle, stop him. But that is not a credible punishment, given the collateral costs.

One implication of this understanding is that Putin is currently a threat to more than just Ukraine. He could boost his own power destructively any number of ways, for instance by creating trouble in the Baltics. Or Russia could try to assert itself in Kazakhstan instead of Ukraine. That would be good for some countries, with uncertain broader consequences.

Putin’s audience is often a domestic one, and it is no accident that over the last year the Russian government has done so much to crack down on dissent at home. With covid still an issue and Russian living standards either stagnant or falling, Putin needs a series of victories somewhere.

Another implication of this model of power is that Putin may look crazy to Western leaders when he is not. Many Western leaders may be obsessed with a certain feeling of power when, because of various systemic checks and balances, they cannot exercise much actual power at all. They may find Putin difficult to understand and predict.

It is probably also wrong to suggest that Putin cannot feel threatened by Nato because Nato would never invade Russia. A stronger Nato with more members, especially in the East, would make Putin look and feel more constrained, so Putin’s anti-Nato demands shouldn’t be seen as a sheer lie or manipulation. Maybe it is too late, but Nato could have signalled earlier that membership for Ukraine was unlikely.

It’s a common economic trope to insist that “incentives matter". While true, it does not necessarily follow that deterrence works. Putin isn’t looking to retire and spend more time on one of his luxurious yachts. The consequences of that fact are becoming clear.

Tyler Cowen is a professor of economics at George Mason University.

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Published: 25 Jan 2022, 10:14 PM IST
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