On rising tensions between Russia and Ukraine [with Moscow having amassed military forces on the Russian border with the smaller country amid a stand-off with the West, as defined by membership of the Nato alliance], so there is also the importance of understanding the mindset of Russian President Vladimir Putin. In this context, two major questions are of particular concern: is that rational? And can it be stopped?
As I like to say sometimes, it’s time for some game theory. Unfortunately, the answers to the two presenters above are: yes and no. That is, Russian leaders are probably rational and cannot be easily distracted.
Economists commonly define rationality as the effective use of means to achieve a goal—for example, to spend one’s money for maximum pleasure. That’s fine for some purposes, but it fails to understand political leaders, including Putin, who appear to be obsessed with power.
The economic framework of rationality doesn’t work well when power is the end. While no one can really know what Putin has in mind, he has ruled Russia for 22 years, a pretty good sign that he cares about power. Putin also grew up in an era – as the KGB agent behind the Iron Curtain of the Cold War era – when power was the currency of the situation.
So how is it difficult to stop Putin in his quest for power?
Detention, by its very nature, seeks to limit the power of the fearless person. If a person cares about many things, not just power, the person will respond to resistance by seeking less power and spending more on other things, such as quiet contemplation or time with their family. If a person cares primarily about power, however, the induced response to resistance is to try to seize more of it.
In other words, trying to make electricity ‘more expensive’ for Putin is not guaranteed to work. The price of enjoying power may increase – eg, because of threatened sanctions – but there is also a renewed thirst for power, precisely because some of the power has been taken away.
Resistance does not always work with power-crazy individuals in international affairs, or in other situations. Napoleon and Hitler faced their blunders, but still went ahead with ambitious and ultimately foolish military plans. Many revolutionaries try to grab power and die in doing so.
An ideal method of deterrence would be to threaten Putin with heavy punishment for attacking Ukraine, while giving him a rise to power elsewhere. where could that be? As Putin has threatened, the US does not want trouble in the Baltics, nor does it want Russia to strengthen its military presence in Venezuela and Cuba. Over time, there will be less and less acceptable ways to distract Russia’s leader from bigger and more dangerous rewards.
Threatening Putin with nuclear destruction would, in theory, stop him. But given the collateral costs, this is not a credible punishment.
One implication of this understanding is that currently Putin is a threat to more than just Ukraine. For example, by causing trouble in the Baltics, he can catastrophically increase his power in any number of ways. Or Russia could try to establish itself in Kazakhstan instead of Ukraine. This will bode well for some countries with uncertain broad outcomes.
Putin’s audience is often domestic, and it is no coincidence that over the past year the Russian government has done much to crack down on domestic dissent. With Covid still an issue and Russian living standards either stagnant or falling, Putin needs a series of victories somewhere.
Another implication of this model of power is that Putin can seem insane to Western leaders when he is not. Many Western leaders can suffer from a certain sense of power when, due to various systemic checks and balances, they cannot exercise real power at all. They may find Putin difficult to understand and predict.
Perhaps it is also wrong to say that Putin cannot feel threatened by NATO because NATO will never attack Russia. A stronger NATO with more members, especially in the East, would make Putin feel more constrained, so Putin’s anti-NATO demands should not be seen as outright lies or manipulation. It may have been too late, but NATO may have indicated earlier that membership for Ukraine is unlikely.
It’s a common economic trope to emphasize that “stimulus matters. While true, it doesn’t necessarily work as a deterrent. Putin isn’t looking to retire and spend more time on one of his luxurious yachts.” The consequences of that fact are becoming clear.
Tyler Cowen is Professor of Economics at George Mason University.
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