The Sunk Cost Fallacy
On the Ukraine War - Written Februari 2022
Swallowing losses while avoiding loss of face on both sides so that the result of a negotiated peace can be sold to the home base as a victory. That, in a nutshell, is the challenge for the two Vladimirs; Putin and Zelensky. Russia will get to keep Crimea and the Donbass and Ukraine and the Nato countries will have to morosely accept a new eastern border and a nuclear weapons-free zone if this war started by Russia is not to degenerate further into a bloodbath. In return, Ukraine will get less in return than they had before, but avoid a war of attrition that will claim countless human lives and material and economic losses. A week after Russia's invasion, it is clear that Putin has choked on his borscht considerably and that his rhetoric that he was going to liberate the "Ukrainian brothers" from the neo-Nazis is in stark contrast to the fierce and unexpected opposition from Ukrainians who can think of something better than returning to the days of yore. And so Putin tries to convince his "brothers" of his good will with bombings, like a vengeful god punishing the disobedient. He has already lost his blitzkrieg that wasn't one and the toll he is paying on the battlefield and economically is enormous. Also don't underestimate the influence of the grumbling coming meanwhile from the corner of the oligarchs and the new Russian rich who from their villas in Marbella, Cyprus, Malta and the Black Sea watch their wealth melt away daily while their bank balances are blocked. Putin lived too much in the shell of Red Square and the Kremlin and listened to his own echo chamber while losing sight of the evolution of his own economic elite; they too do not want to trade their acquired jet-set life again for the tristesse of an isolated Russian state with empty stores in Moscow and St. Petersburg.
The concept of the Sunk Cost Fallacy explains many of history's greatest catastrophes, including World War I, communism and now, closer to home, the Covid19 policy and Russia's invasion of Ukraine.
The Sunk Cost Fallacy is a behavior that, despite the losses involved, continues to be repeated for the sake of previously invested resources. As such, it is the opposite of "taking your losses." Factors that fuel the sunk cost fallacy are fear of financial loss, but also loss of face, loss of tradition, of patriotism, of ideology, of loyalty to institutions or people and history.
The most poignant example of this is certainly World War I, in which more than 20 million people lost their lives and more than 20 million more were seriously injured. This while it was clear as early as 1915 that none of the belligerent powers could win this anytime soon because they were stuck in the trenches and so they had better swallow their losses. The bizarre thing is that just about the entire population of the warring camps supported and continued to support the war despite the great losses. For every soldier killed, the fighting sides invested more people in the war. The higher the death toll, the more support the war found. Most people supported the war effort because a negotiated peace would make the deaths of the fallen meaningless. Only exceptions like Albert Einstein could resist the Sunk Cost Fallacy and warn of the loss of countless lives in exchange for a few meager yards of profit in trench warfare, where the poppies bloomed . Incidentally, this had happened before in the Crimean War, where the futile charge of the British light brigade led to the phrase "cannon fodder. Do we never learn anything from history? Apparently not. Against our better judgment, let us hope that rationality does prevail this time, although it seems to be far from it with Putin. The question is whether both Putin and Zelensky can and dare swallow their losses.