Iraq and the Sunk-Cost Fallacy

(Friday afternoon, whew! Have at it.
-exmearden – promoted by exmearden
)

Crossposted from Daily Kos

I am not an economist, but reading Jay Elias’s latest diary made me think of another problem with the way George Bush and his sycophants look at Iraq: they keep falling for the sunk-cost fallacy. Wikipedia defines the fallacy as follows:

Economics proposes that a rational actor does not let sunk costs influence one’s decisions, because doing so would not be assessing a decision exclusively on its own merits.

This strikes me as being pretty much exactly the mistake George Bush keeps making. What are the merits for staying in Iraq now? None that don’t have some basis in the cost we’ve already sunk.

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So I googled for Iraq and the Sunk-Cost Fallacy. It turns out that Barry Schwartz beat me by almost two years. That’s right, this problem has been apparent since at least 2005. In the event, Schwartz covers the problem well, and I encourage you to go back and read his column. Some choice excerpts:

How do we honor the sacrifices of those who have died or suffered serious injury in an American conflict? The best way to show how much we respect and value their lives is by refraining from sacrificing other lives in their name unless future prospects fully justify putting more people in harm’s way. The lives of those who died are a sunk cost-one that is much higher than any of our treasure. But their lives can not be reclaimed. Their injuries can not be undone. If our assessment of a military situation is that we are unlikely to be successful, or that the likely price of success in lost lives is too high, then we must change course. What we owe those who have already suffered is enough reverence for life that we won’t send others to suffer after them in order to justify their own suffering.

And:

[I]t is unacceptable to justify [our continued involvement in Iraq] on the grounds that we “owe” it to those who have already fallen. That is a justification that no one should be allowed to get away with. But it is a justification that is coming increasingly to the fore, usually implicitly but sometimes explicitly, as other arguments about staying the course in Iraq become less and less compelling. Whatever the differences may be between Iraq in 2005 and Vietnam in 1968, if we allow policy makers to use our “sunk costs”-our dead soldiers-to justify further conflict, we will have turned Iraq into another Vietnam. And if we do, we will be shamed by Iraq just as we were shamed by Vietnam.

I hope as much as I can hope (I don’t pray) that Congress takes all of this to heart when it considers whether and for how long to keep funding this debacle–and it seems clear to me that we should not.

  And what of our leaders in Congress? Will they see what we see, or will they continue falling for George Bush’s continued reliance on the sunk-cost fallacy? I think we will find out next month, and I do not feel good about the answer we’re likely to get.

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    • andgarden on September 7, 2007 at 3:38 pm
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    for your morning coffee break.

    • melvin on September 7, 2007 at 3:44 pm

    with lives than they are with money. Most rational people pity the gambler feeding the rent money into a slot machine, and if they are close enough may even intervene.

    But stir in a bunch of misplaced or freefloating “ideals” like honor, face, etc. and it’s Katie bar the door.

  1. you need to know what youre paying for…the goal.  and your assertion is absolutely true if an free and independent iraq is the goal…which i dont think anyone really believes, do they?

    spending OUR money and OUR lives to gain access to oil resources for a chosen few is a very shrewd economic decision for those it benefits.  morally repugnant and illegal…yes..but economically sound.

  2. which is the Money Pit.

    Smart investors don’t send good money after bad. They learn from their mistakes, and don’t keep putting their money in a bad investment. If Iraq is anything, it is a bad investment for America.

  3. It’s not his cost.  He’s staying in for political considerations:  Maybe something changes and we win, but most importantly we don’t lose on his watch and he can pretend that if we’d only stayed steadfast we would have won.  Now Johnson and Nixon in Vietnam, that was sunk cost.

    Republicans follow him out of similar political considerations, and Democrats because they’re afraid of the Dolchstoss.  It’s not hard to understand.

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