August 28, 2007

What's the opposite of the sunk cost fallacy?

The famous sunk cost fallacy is a particularly popular justification for throwing good money and blood after bad in a war like Iraq. But the U.S. abandonment of South Vietnam during Watergate and its aftermath is a clear example of of the lesser known converse to the sunk cost fallacy.

In 1974, it was clear that
South Vietnam's survival hadn't been worth the sunk cost we had expended during 1961-1973. Yet, sunk costs are sunk. What we needed to think about were marginal costs. The events of 1972, in which American airpower (finally made effective by the mass use of laser-guided smart bombs) and South Vietnamese manpower had turned back a massive North Vietnamese mechanized invasion (which, in itself, showed that we had finally largely defeated the indigenous guerilla movement) at the cost of only 300 Americans killed in action for all of 1972 would seem to show that the marginal cost to America of giving South Vietnam a fair shot at surviving the next North Vietnamese offensive. Yet, being sick of Vietnam, we failed to focus on the affordable marginal cost and got hung up emotionally on the catastrophic sunk cost.

The NVA tried a tentative offensive in December 1974, following the Democrats midterm election triumphs, found that the
US wouldn't provide air support, so launched a massive offensive in March 1975. The South Vietnamese collapsed about as quickly as France in 1940.

My published articles are archived at -- Steve Sailer


Anonymous said...

What's telling are the comments ten years later made by Assad of Syria and the President of Pakistan to the effect that America was a treacherous or unreliable ally and a harmless enemy.

The marginal cost was appearing weak and beatable by peoples for whom it was unhealthy to encourage that idea.

Successive Presidents only made it worse. Nixon allowed Arafat's murder of our Diplomats to the Sudan to go unanswered, Ford responded weakly to Mayaguez, Carter impotently to Khomeni's seizure and torture of our Embassy people. Reagan ran away in Beirut and traded arms for hostages, Bush stopped short of removing Saddam. Clinton did not respond at all to the Buenos Aires bombings (goodbye Monroe Doctrine!) or Khobar Towers or 1993 WTC bombing or the Cole or the 1998 Embassy bombings. Then 9/11.

The problem was that each act itself was in the US Administrations considered in isolation, while the rest of the world considered them in aggregation. It was for that reason that Osama genuinely thought that 9/11 would produce either outright US collapse or a counter-attack in Afghanistan that he could easily defeat and through the defeat destroy the US (as he thought he'd destroyed the "stronger" Superpower the USSR).

The marginal cost is not JUST the cost on the margins of each act, but what the act added on top of others does to destroy the US's ability to deter aggressive acts.

Anonymous said...

The worst in Anonymous 7:30's parade of horribles was Carter's response to the Iran embassy takeover. It was an act of war pure and simple and Carter should have asked for a declaration of war as soon it happened.

The hostage crisis made us look absolutely ridiculous. Carter's concern for the hostages' lives was nice and all but the very basis for our nuclear deterrence was a president willing to sacrifice all of us if necessary to protect our vital interests. The ethics of Mutual Assured Destructions were like the scene in The Usual Suspects where Kaiser Soze kills his own family before he killed their captors, to show "these men of will what will truly was".

President Carter revealing his absolute lack of will against the Iranians was the worst possible thing a Cold War president could do.

Anonymous said...

Sunk costs?

Reminds me of an incident when I was in middle school. It was lunchtime and I wanted a bag of potato chips. So I went to the vending machine to buy some, only to see that 3 kids before me had wanted the same thing, and 3 bags were all stuck behind the arm. It occurred to me that some kid would get really lucky and get his own bag plus 3 more. So I put in my last 50 cents and pressed the button and....

No luck. My bag was stuck, too. So I wander off to ask a friend to borrow 50 cents, and when I come back I find that all 4 bags were gone. The kid after me was the lucky kid who got four bags for free.

Sunk costs. The first $2 was wasted. All some kid needed to do was spend an extra 50 cents to recover all the lost money.

In 1974 we failed to do that.

Ali said...

Vietnam has very little to do with Pakistan's perception of the US. That was formed more by the refusal of America to support it against India in the '65 and '71 wars, the Pressler Amendment and the Indian nuclear co-op deal.

Michael Carr - Veritas Literary said...

The weird end result is that 30 years later, we have the exact result we had been shooting for: a moderate, capitalist dictatorship. Had we won, we'd probably see a wealthier south and an isolated, anti-American holdout a la North Korea.

The only stalemate that turned out well for us was the biggie with the Soviets. The others: Iran, Cuba, and North Korea, have all been a disaster. We'd be better of admitting these guys "won" and engaging them in the same way we have the Chinese.

Anonymous said...

Yes, many people in 1975 confused two very different questions: was it a good idea for Johnson to commit ground troops to Vietnam in 1965 (probably not) as opposed to, was it worth continuing to support South Vietnam with supplies and air support in 1974-75?(almost certainly) And of course, that not-inconsiderable faction of Americans who just flat-out wanted a Communist victory did their best to confuse these issues.


Anonymous said...

The marginal cost is determinate (as is almost everything) in hindsight.

What would be the marginal cost of achieving "victory" in Iraq now? Do you know?

What is the definition of "victory" in Iraq now? Does anyone know?

Another concept sorely needing consideration is "diminishing returns." In Iraq, we smashed the country, killed Saddam, and liquidated the government. We won the military victory hands down. Since then, we've been engaged in trying to...what? Stabilize it. Get a good government in there - and currently, get a BETTER government in there. Secure the place. Get electricity going more steadily - and then, more steadily still. Have elections - then, have BETTER elections. No wonder they say we'll be in Iraq for decades, or perhaps forever.

It's called Mission Creep, and represents the reification of diminishing returns. (Aka open-ended "marginal" costs.)

We're done. Let's get out already.

Anonymous said...

What we need to think about is the morality of invading a Vietnam in 1963.

Vietnam was not a threat to the United States.

Why is it unhealthy to encourage people in other nations to defend themselves from an invasion from the US?

Henry Kissinger has to be very carefull these days when he lands in foreign airports. If he lands in the wrong airport, he will be arrested,sent to the Hague to stand trial for crimes against humanity and then hung.

Rumor has it that in Europe war crime charges are already in the process of being written up in the event that George W Bush nukes Iran.

I have no doubt that there are eighty year old Nazis in Germany who feel the cost of the war wasn't worth it. This this make him any less of a moral degenrate? Obviously no.

Same moral principle applies in 2007 to people who oppose the invasion and destruction of Vietnam for pragramtic reasons.

Anonymous said...

I just don't buy it.

Even if we achieved a "military" victory in Vietnam, we would still have have years and years of resistance. Maybe it would have been like Iraq or maybe like Central America, Cuba or Korea, but it could never have been "clean".

By leaving, Vietnam is coming around at its own pace and in the end it will be built on a much more solid foundation.

Unless the country poses a direct threat, which Iraq does not and neither does Iran, then it is very stupid to engage then militarily.

Even Israel knows this, as some 25% of their population is avioding the draft. They know that the GWOT is BS.

Anonymous said...

Fascinating point, Mr Sailer. P.S. why are people still blaming Johnson for Kennedy's war?

Anonymous said...

Not only was there none of the promised air support but Congress also slashed military aid radically. When the NVA invasion came, the ARVN forces were out of ammunition and fuel.

Anonymous said...

Anon 12:44 --

So what if Europe issues toothless arrest warrants? They tried that with Rumsfeld and Bush and were smacked down (because the truth is that Europe is completely defenseless against any outside threat: Russians, North Africans, etc) absent the US defense shield. There is also a trial in the Hague against Dutch "peacekeepers" who handed over their weapons to Ratko Miladecs militias at Srebenica ("Sanctuary City") and let the people there who had fled under promises of Dutch/NATO protection be massacred.

Witness the mighty soft power of Europe. Well, it's soft alright. Power? That's a good laugh.

[You must have missed the Sarkozy threat to Bomb Iran if all else fails, or CHIRAC threatening "unspecified enemies" with France's nukes. Iranian nukes if they follow Chinese/Pakistani designs can fit on missiles that can already reach Southern Europe. Yes including parts of France and Iran has ALREADY made noises about being the "Protector" of Europe's Muslims and taking military action against nations that don't respond to their demands. Like say killing a Swedish Artist who draws a picture of Mohammed as a Dog. The only power left to France and Britain is their own small nuclear arsenals and ICBMs and nuke submarines. The rest of Europe doesn't even have that, witness the gutless Dutch on trial.]

More Lefty moralizing: we didn't "invade" Vietnam in 1963. We sent our advisors to counter Russia and China's advisors in the usual game of Superpower influence building. Was it wise? I doubt anyone can tell one way or another. Staying in Vietnam certainly signalled the USSR that we were serious people and could and would respond to attacks with MAD. Pulling out weakened that perception. By how much and with what consequences are hard to say. Rolling over to Russian/Chinese attempts to push us out of our sphere of influence (SE Asia) certainly WAS a threat to the US, if for nothing else than encouraging unhealthy ambitions elsewhere (could the US be pushed out of West Germany? How about France and Italy?).

What's interesting in Iraq is the total failure of the Top-Down political process. The UN, State Dept. and NGOs either didn't bother to show up, got chased out by violence, or were uninterested in sitting down in dusty, unglamorous towns like Diyala to do things like negotiate local power sharing agreements. Result? The US Military has had to it ALL. Including concluding that the Iraqi top political leadership is useless (under the UN-mandated proportional voting system) and working bottom-up. Terrorists blow up grids and provinces don't share anyway. So local generators rule, and local agreements build safe-zones region by region. Not very sexy but possibly a solution: a relatively stable Iraq not under Iranian control nor fought over by Turkey, Iran, and Saudi.

What is the marginal cost of withdrawing and encouraging not just AQ but those on the fence: the Pakistani military controlling their nukes, Iran's mullahs, the Chinese, and Russians that the US can be pushed around with impunity? It's totally unknown and therefore possibly quite risky. What is known about these people is that they respect strength and despise weakness.

Anonymous said...

Anon 8:52

Every nation has a right to defend itself from invasion from the United States. The Vietnamese were justified doing whatever it took repel and expel the US out of Vietnam. This includes acccepting weaponry, Russian and Chinese military advisors and inflicting very high causualites on the US military. During the American Relutionary war, there were Prussian and Polish miltary advisors to the Washingtons Colonial army along with massive French aid.

Several years ago, Henry Kisinger was picked up by British authorities for questioning about his role in the illegal overthrow and murder of Salvador Allende. If Tony Blair had not intervened, there was a good chance that Henry Kissinger would have been sitting in a prison sell in the Hague awaiting to stand trial for crimes against humanity.

I don't subscribe to the moral principle that might makes right. The fact that the US was powerfull enough to invade,occupy and completly destroy Vietnam does make the invasion,occupation and murder of three million South Vietnamese a morally noble endeavor.

What we are witnessing today in Iraq is for the most part an exact replay of the Vietnam war:invasion,occuaption an destruction of a nation and its people.

George W Bush should be hung for war crimes. Hopefully, one day soon, George W Bush and Henry Kissinger will occupy adjacent cells in a prison in the Hague.

Anonymous said...

Who are all the neocon warhawks that creep out of the woodwork when the issue of Iraq comes up? No amount of empirical evidence will ever prove their policies a total failure – one just needs to pound their head against the wall harder to make the bleeding and headaches disappear.

The most frustrating part is neocons passionately, freely and copiously mix facts and commonsense with outright lies and logical fallacies to take propaganda back to the age of Trotsky and Stalin.

Anon 7:30pm –

(1) Nixon appears not to have known at the time that Arafat was directly tied to the Khartoum incident where 2 US diplomats were killed and the rest released. Besides, the US has long been unquestioning supporters of Israel in part because Israel deals with such Anti-US in ways American voters will not support.

You seem to suggest the US always respond militarily against every country where a terrorist event occurs. This gives terrorist a lot of knee-jerk control over our foreign policy and the ability to overextend and ruin our global.

(2) Ford responded quickly (<3days) and in force to the Mayaguez incident with a coordinated air, sea and land rescue. In the first wave over 200 marines of the 600 planned were landed and 57 others retook the empty Mayaguez vessel. Even the crazy Khmer Rouge realized what hell hath wrought and quickly freed the entire crew unhurt and without demands before the US rescue operation began.

(3) The Iranians did not torture our embassy people. It took Carter and his military over 6 embarrassing months to mount an even more embarrassing failed rescue attempt and months more to plan another one. This is the only legitimate point you make. What was more surprising was the complete lack of retaliation once our hostages were freed 6mins after Regan was inaugurated (combined with the Iran-Contra scandal) fueling conspiracies.

(4) Regan evacuated Beirut because the US was simply an easy common target for various warring factions in the Lebanese civil war without any clear and finite mission (sound familiar today?). Trading arms for hostages is disputed, but shows the treachery of imperial politics more than any weakness of will if true. It also shows strength in that we’re not threatened even arming our enemies.

(5) Bush stopped short of removing Saddam because, as former CIA head, he knew Saddam was the only thing holding Iraq together and didn’t want to destabilize the world’s biggest oil region. As evil as Saddam is portrayed today, he was secular, rational, pro-Western ally and ruthlessly suppressed religious fanatics as well as Iranian and other foreign 5th columnists. Current events prove Bush I was much wiser than Bush II.

(6) What does the terrorist bombing of the Israeli embassy in Buenos Aires have to do with protecting American interests abroad via the Monroe Doctrine? Israel promptly attacked the alleged perpetrators to protect her citizens and interests. What did you expect Clinton to do in response to various terrorist acts like Khobar Towers, 1993 WTC and the USS Cole – invade Saudi Arabia where many terrorist have links? The nature of terrorism is that there is no easily identified state we can attack as a hard target. Did you think the US under-reacted to 9/11 by invading two countries, one of which was completely uninvolved? Should we also have attacked Saudi Arabia where most of these fanatic terrorists are born, brainwashed and financed?

Anon 8:52 (same/different person)

You lose all credibility repeatedly claiming Europe is defenseless against invasion by N. Africa without US protection. What does the surrender of 370 lightly armed and unsupported Dutch peacekeepers with orders to only shoot above the heads of thousands of battle hardened Serbs fighting a civil war on their own homeland prove?

Please cite non-fringe quote from legitimate high-ranking Iranian government official stating they are the protectorate of European Muslims and what demands they are making of whom backed with military threats. What do death threats against a Swedish artists have to do with purported growing Iranian militancy? All this smells like more hysterical neocon disinformation BS.

South Vietnam pulled out of general elections because Ho Chi Minh was a national hero and would’ve united the country under Northern leadership. The US intervened to stabilize the South and help prevent this from happening despite recognized the South was a corrupt regime. The US had little strategic interest in Vietnam whose natural enemy is China against which they briefly went to war with afterwards. China was in no position to expand into SE Asian and no Russian leader was about to read any equivalence of will between defending Mainstreet USA, Berlin/Europe and walking away from humid rice paddies in Vietnam – that’s simply a red herring.

The top down failure was with the entire neocon fantasy about how the war would go. Remember the people welcoming our troops with flowers in the streets of Baghdad? Democracy blooming in the desert and spreading throughout the Middle East like a new domino theory? The neocons didn’t plan for any post-Saddam stability or control because they viewed Iraqis are naturally individualist, freedom loving, secular, American consumers who only needed to be freed from the tyranny of Saddam. Funny how neocons planned, controlled and overruled this entire campaign and now point fingers at the very people who pointed out the fatal flaws in it like the State Department, CIA and the US Military.

If we pull out of Iraq the locals will kill and drive out AQ – this is not the no-mans land of Afghanistan. They have already started to do so in an unholy alliance with even the US. The place will break into inevitable Kurd, Sunni and Shia sections one way or the other (via a loose federation or a complete break). The US would have more control over Pakistan if we pulled out the majority of our forces tied down in Iraq and put some in Afghanistan to seriously hunt down the real religious terrorists in their home base. We’ll save thousands of lives, billions of dollars and begin to restore soft power that is important in winning international cooperation needed to help root out amorphous terrorism. That we don’t future so we can’t make any new decisions today is another oft-repeated asinine neocon argument.

Every nation state is understandably scared shitless of the US as our military has demonstrated overwhelming dominance in conventional warfare. Our best interest is in building and supporting such nations we can then dominate. It makes no sense to shatter them creating chaotic proving grounds, operational bases and recruitment videos for fatalistic terrorists like neocons have done in Iraq and want to do in Iran, Syria, etc. Everyone respects strength, but no one fears self-defeating ignorance.

Anonymous said...

Oh dear. Those mad mullahs are gonna git us!

You'd be "mad" too if someone were camping out in your backyard and killing your children.

The moral is the practical. Countries that are of no threat to the territory of the United States proper should not be attacked or occupied. It's morally evil to do so, and it leads to innumerable practical evils in consequence. (If you're worried about nukes, the solution is not to make or sell them. They can't be feasibly constructed in a kitchen by a bunch of third-worlders; they exist only through heavy first-world industry, science, and technical assistance operating together at high levels.)

Why plunge the world into WWIII to ward off the possibility that 20 or so people might be killed in Haifa by a conventional bomb? That's the only realistic threat involved. Which can be taken care of by Israel, not the rest of the world.

Anonymous said...

"George W Bush should be hung"

Hanged, sir. Not hung.

Thanks a lot. You created a bad image which will require numerous brandies to wash out of my mind.

Anonymous said...


India, Pakistan, and North Korea are all genuine third-world countries with real, live nukes. So it does appear that third-world countries can develop them. Further, without various kinds of intervention, probably quite a few more countries would have them openly.

I have no idea what to do about this. The whole invade-the-world strategy of the neocons seems to me absolutely nuts. But it would be really nice if we could avoid leaving our kids a world with 40 countries with nuclear arsenals, because that's going to be a world where a lot more nasty stuff can happen.

I would love to know what fraction of the first-tier industrial powers that aren't officialy nuclear powers have them informally. It's not like Japan or Switzerland or South Korea or Australia would have any particular trouble developing nukes, if they decided they needed them.