Iraq and the Chain-Store Paradox of Power

A Chain-Store paradox is the game theory result for an incumbent firm has a series of branches in different towns. In each of these towns there is a potential competitor. If this competitor chooses to enter the market the incumbent can either opt to behave cooperatively or behave aggresively, for example by attempting to start a price war with the entrant. The incumbent is best off if the potential competitor does not enter his market but if they do then he will be better off cooperating rather than behaving aggresively.

This scenario can play out only one way if all the parties are behaving rationally. The entrants all, via backwards induction, know that if they enter it will not be in the interests of the incumbent to challenge them. As a result, they will all enter. The only way for the incumbent to win is if he can establish credibly that he is irrational; establish that he will behave aggresively in response to market entry regardless of the result in that particular case. If this can be established then the potential entrants will stay away from his markets and he will be far better off.

Connecting this to the dynamics of geo-political power is easily done through a historical example: The Byzantine Empire faced threats from various Turkish border warlords to its borders who gradually chipped away at its territory. It possessed a powerful Imperial Army which had crushed its enemies in the past but did not deploy it on any significant scale to stop the rot. Each of the individual warlords would advance a little and, given that the Byzantine military power was occupied in other conflicts and a waning force, it would never be rational of the Empire to stop them. In the end it lost its Anatolian breadbasket and, when the conquerors came for Constantinople, was such a depleted force that it could not resist its enemies.

The Iraq war could have been the perfect chance to establish the credibility that we would destroy those who behave as our enemies. While the ten year gap between the major abuses of the Saddam regime and its destruction may have infuriated those who opposed the war they only increased its value as a deterrent as it established that even if you thought you could avoid American retribution in the short term you would always have to fear it as a sword of Damocles waiting to punish you for your temerity. This would have given the most lunatic of dictators pause when considering whether to infringe upon the interests of the US in the future; they usually possess something of an instict for self-preservation. Equally, it should have appeared clear from the frequent newsreports filed while wearing chemical warfare gear that the coalition of the willing was even willing to charge down weapons of mass destruction.

The Iraq War has clearly not had a deterrent effect. If it had Iran and North Korea wouldn't be playing us for fools as they now are. What went wrong?

I do not think that it was actually the most obvious failing, the human cost of chaos and violence in Iraq today, that was most important. It is of great humanitarian interest whether we can make the state of Iraq work but is probably not terribly relevant to our national interest. The idea that we would be loved for our actions in Iraq was never particularly credible; even when Iraqis were dancing on statues of their reviled dictator we were still considered out of line. That the 9/11 bombers were recruited by shocking them with offences committed against Muslims in Bosnia, where the US and Europe fought on their side, should be enough to demonstrate that these sentiments are fickle; whether we are feared is more important than whether we are loved.

Equally, Iraq has not militarily weakened us enough to make future action impossible and those who say that it has are being narrow minded. If we were to want to invade Iran tomorrow we could certainly find the troops, we could even take them from Iraq with the damage being to the people of Iraq rather than ourselves. While Iran might be able to raise hell in Iraq in response to our attack again this would hurt the humanitarian situation in Iraq which could be separated from our own interests if we were hard headed.

I think the greater problem that has emerged from Iraq, and postwar incompetence, is that it exhausted the political will for military action. Michael Gove, one of the most articulate and hawkish voices in contemporary British politics, has admitted that this is true for the UK and for all the bluster about keeping the option of military action on the table I think it is probably true of the US too. The main effect of post war chaos has been to further diminish the political will to act in future crises. I may be proved wrong on Iran, particularly with a new US president without the stink of the troubles in Iraq on his clothing. However, even if we do wind up taking action in that case it must now be clear to everyone, including our enemies, that the West as a whole, and not just Old Europe, has an extremely limited will to defend its interests relative to its military and economic might.

As such, while we might have hoped that Iraq would demonstrate our strength in fact it demonstrated our weakness.

This is unfortunate as Western power is emphatically a good thing for human progress. Those who focus on the misdeeds of the West in deposing Latin American socialists or funding vicious Arabs to fight the Soviet Empire miss the bigger picture of what Western power means. Western power is what defends that body of countries, making up a decent proportion of the worlds population nowadays, who have escaped the cycle of political power as an extension of murderous family politics, established economies which can protect their people from Malthusian crisis and widen their people's horizons with education and pervasive information. Getting rich and stable without the strength of the West to keep order just makes you a better target, the unfortunate fate of Kuwait. That some states get caught in the crossfire of our struggles with our enemies is regrettable but does not make that struggle less worthwhile.

However, it is, to a certain extent, dependent upon a bluff. Comfortable Western societies have the military power and the expertise but they lack the demographic growth and have too much to lose to defend the international order through force of arms alone; they will not lightly sacrifice the comfort of a peace time economy. Convincing our enemies that opposing us is not worth the risk is what allows us to avoid serious guns versus butter questions.

That bluff has now been exposed and is being called by Iran and North Korea. While we have the military power to remove just about any regime on Earth in a month we lack the will to exert that power. Now, thanks to the war in Iraq, everyone knows it.