Friday, 2 March 2018

Why Russia public display of nuclear strength is paradoxically comforting

In his recent state-of-the-nation address, Russian president Vladimir Putin demonstrated new nuclear capabilities the nation has been developing, including a fleet of missiles capable of evading the US's anti-ballistic-missile defenses. This is not brinkmanship of the reckless North Korean variety, but is nonetheless a public display of nuclear force and ambition that has alarmed many observers. Some have concluded that that the world might be quickly heading towards a nuclear confrontation.

While such fears may at first appear well founded, if one stops and thinks about it for a moment, and brings a game theoretic mental model to bear on the problem, there is actually a paradoxical comfort we can derive from the very public displays of nuclear force Russia (and even North Korea) are undertaking; indeed, it can be readily inferred from the existence of the public displays themselves that these nations have no intention of actually using the weapons.

Think about it for a moment, in the manner a poker player might. If a state actually wished to undertake a nuclear first strike against the US, what would be the best strategy? The best strategy would be to keep one's nuclear development program - including new state-of-the-art missile-defense-evasion capabilities - top secret, because providing your adversaries with forewarning of your newly-developing capabilities would grant them the time and opportunity to prepare a response/defense. In the years leading up to the bombing of Pearl Harbour, the Japanese did not carefully and deliberately telegraph to the world/US the fact that it's airforce had the capacity to wipe out Hawaii's naval fleet in a matter of hours. Why would they? It would be foolish to do so, as it would relinquish the element of surprise.

Putin is not stupid, and we can therefore infer from the very existence of his public displays of nuclear strength (and indeed North Korea's for that matter) that he has no actual intention of using the weapons. So what is Putin's motivation then?

There are two. The first is for it to act as a geopolitical deterrent. It sends a clear message - 'do not interfere in our domestic affairs (e.g. try to topple its dictatorial leader) or consider invading us, because we have a credible threat of nuclear retaliation'.

The second motivation is one that is more frequently overlooked - domestic politics. 2018 is an election year in Russia, and we often forget that Putin's strategic rivals are not just other nation states, but also his own domestic political opponents. Although Russia's democracy is 'managed', he still needs to maintain high levels of domestic popularity/legitimacy in order to avert the risk of a domestic insurgency/coup. The domestic electorate and establishment alike in Russia are impressed with these kinds of displays of strength - it telegraphs to the local electorate 'I am a strong leader; I am capable of standing up to Western influence and making sure Russia is not bossed around; and I am capable of demanding Russia be accorded the proper respect it deserves'.

This display of strength appeals to the egos and sense of national identity of the average Russian - something a lot of Western observers struggle to empathise with (Russia used to be a superpower, and has struggled since the collapse of the Soviet Union to take a humility pill and accept a lessor station in life as merely a 'former' superpower). Russians want respect and feel they are not sufficiently accorded it, so displays of strength are popular. In short, this display of nuclear capability is good politics, and the fact that these demonstrations are occurring in an election year is not a coincidence.

It is also important for Putin that he keep the military onside. When dictators fall, it is quite often at the hands of a military coup. It is therefore important the military be (1) well funded (with high levels of corruption tolerated); (2) accorded significant influence and respect in society; and (3) given things to do that make it feel needed/important. It reduces the likelihood this well-organised machine could become disaffected and attempt to seize power. This is likely an important contributor to Putin's geopolitical posturings and seemingly-bizarre appetite for war-mongering. It is likely to satisfy the military. However, Putin has little desire to go to war for its own sake - let alone nuclear war. His motivations are merely to secure his political power - something he has now succeeded in doing with ruthless efficiency for almost two decades.

Putin is smart and rational. We therefore need not fear him from a nuclear point of view. It is irrational leaders with nuclear weapons we need to worry about (e.g. Islamic extremists). Furthermore, the nuclear nations we should really be afraid of are clandestine ones attempting to develop nuclear capabilities in secret. They are the nations to be feared. Russia is certainly not one of these, and quite likely, nor is North Korea.



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  2. Hey LT,

    Have you read Bill Browder's book Red Notice? It's hard to trust people like Putin when they are stealing money right out from under companies. It seems like a very corrupt state to me.

    1. Hi Tony,

      Yes I have. I've listened to Browder's talks etc also. My takeaway was actually that I was surprised how much he was able to get away with, and for how long. He was very naive to think he could just waltz in as a foreigner into a place like Russia and call out fraud and corruption left right & center in the media.

      It takes a long time for countries to develop strong institutions. It doesn't happen over night. This is par for the course in developing countries. The question is not, is there corruption? Of course there is. It's a question of the trajectory. There is a process to economic development & institution building. It takes generations.

      The other thing is that context is often lost. Most of the oligarchs in Russia accumulated their wealth through corrupt/questionable means in early 1990s privatisations. Putin basically said, we have a file on all you guys. We know you got your wealth through corrupt means and can prove it. So stay out of politics, or we will dust off the file and take you down. Most have complied and have done well. A few, like Khodorkovsky, took him on regardless, and failed.

      It's not a question of 'are things good or bad'. It's a question of whether the odds are mispriced. Russia's economy is very capitalist and highly competitive, and growing. The country is also fiscally, very well managed. Corruption exists and its political institutions are not liberal. Those latter points are a negative but are far from a deal breaker from an investment point of view. If you stay out of politics, you can make a lot of money in Russia.

      China is no different. Have you read that book 'Mr China'? Tale of a westerner trying to do business in China in the 1990s. He we naive and got royally f*cked.

      Russia has also changed a lot in the past 20yrs. It's still corrupt, but much less so than in the 1990s. Corporate governance has improved a lot as well.