Credible Commitments End Wars.

Credible commitments obviate war, too. If Japan, Britain, and America could have committed to free navigation in the Pacific, there would have been no Pacific War.

Here’s a tale of credible commitment.

Billy Bathgate is the protagonist of E.L. Doctorow’s Billy Bathgate (1989).  Billy is an Irish kid in the Bronx of the 1930’s; he gets swept up in the romance of being a gangster.  Being an enterprising, capable young fellow, he insinuates his way into the service of Dutch Schultz, a legendary figure in the Jewish Mafia.  Along the way Billy gets mixed up in some fraught transactions involving the people who invented the term “mafia,” the Italian Mafia.  Long story short: Billy witnesses the murder of Dutch Schultz and his most trusted lieutenants at the hands of “Lucky” Luciano and his lieutenants.  Luciano discovers the fact that Billy witnessed the “hit”.  Billy is now a threat to Luciano, because Billy “knows too much”.  Luciano can neutralize the threat by having his people execute Billy.  But, is there any way that Billy could credibly commit to keeping his knowledge of the hit forever secret?  If so, could Luciano be induced to let Billy go?

“I’m sorry, kid, but you know too much.”  Luciano exclaims something to that effect, but Billy cajoles Luciano into letting him go.  That may strike the reader as a non-credible plot point, but Luciano does go on to observe that “We know where you live …  We know where your mother works … We will be checking up on you.”  Something to that effect.  Presumably, the threat of harm to his family or to himself enables Billy to credibly commit to forever keeping his knowledge of the hit secret.

Again, the reader might wonder, why not just make Billy disappear and be done with it?  Would that not constitute the more conservative, lower cost, secure option?  But, this tale has a happy ending.

It is difficult to imagine the war in Ukraine yielding a happy ending for a lot of people, but could the Ukrainians and Russians credibly commit to forebear from taking certain actions going forward, and could such commitments enable them to disengage, save face, and secure a durable, if not friendly, peace?

What might such commitments look like?  Could the Ukrainians commit to carrying on as a neutral buffer zone between the NATO/EU bloc in the West and Russia in the East?  For their part, could the Russians commit to leaving Ukraine and Ukrainians alone?  We can further ask: If both parties had already been situated to make such commitments, why had they not done so and thus have avoided war in the first place?

One answer to all of these questions is that one or both parties have serious credibility problems.  Does anyone, for example, trust the Russians?  Every time oil prices go up, they seem intent on financing ventures to chip away at the countries on their borders.  They’ve only been quiet when their finances could not support such adventurism.  And dressing these ventures up in excuses that “Russia is a proud nation” with an imperial heritage and therefore—what?—is entitled to impose empire on unwilling parties?  That does not inspire confidence.  It merely inspires more distrust.  What are they thinking?

Then there is the EU/US/NATO bloc.  Why has NATO remained in business after the disintegration of the “Eastern Bloc”?  But it has remained in business for 30 years, and the Bloc has extended NATO membership to many former members of the Eastern Bloc.  Was that a good idea?  What threats does NATO contemplate?  Revanchist Russian Empire?

Suffice to say that it is not obvious that any parties have built up capacity to credibly commit to anything.  The United States has certainly expended its capital of good will and trust in Iraq, Afghanistan, Libya and elsewhere.  It has expended much its capital within the United States itself.  Who trusts the security services – the CIA, the FBI, the NSA and the myriad agencies we’ve hardly heard of?  Do we really require all of these agencies, especially when the Administration sets them off on harassing citizens?  Then there is the military.  Does anyone trust its leadership?

Let me pose this proposition: The United States has failed to set itself up as a credible peace broker in the decades following the fall of the Soviet Union.  And it would not be the first time that it failed to broker peace and mutual gain in global relations.  Let me point to the great tragedy of the Pacific War—the war with Japan in the Second World War—and to suggest that credible commitments on the parts of Japan, Britain and the United States to preserve free navigation on the seas could have preserved peace.

Since at least the 1890’s an industrializing Japan had been mucking around in Korea and then in Manchuria.  It even fought a war with the Russians (with spectacular success) over access to these places.  Japan went so far as to annex Korea in 1911.  Why?  Surely a big part of it has to have been the fact that an island nation had to secure access to mineral resources and other commodities in order to maintain its industrialization; it is no surprise that, like Britain, the island nation of Japan committed to developing potent naval power. 

The amazing thing is that Japan did proceed to become a potent naval power, for, in 1852, Japan under the Tokugawa Shogunate remained virtually what it had been in 1603 when Tokugawa Ieyasu secured the title of Shogun.  The Japanese of 1852 could see what had come of the failure of the Chinese to adapt in an industrializing world.  It set itself off on a successful program of industrialization within the span of a few generations.

The great puzzle from the perspective of the naïve economist would be: Why would Japan have to develop itself into a potent naval power in the Pacific?  Why not just acquire mineral resources and other commodities in markets?  What’s wrong with trade?  Do you really need to annex whole other countries in order to secure access to resources not abundantly available in your own country?

Perhaps.  But was there concern that making the country dependent on the openness of overseas trade routes would make the country vulnerable to being cut off by antagonistic naval powers?  The Russians had been antagonistic.  Meanwhile, the British and the Americans—especially the Americans—maintained perches along the trade routes from which they could venture out and shut down sea-borne traffic.  The British, for example, were comfortably ensconced in Singapore.  More importantly, the Americans occupied the largest of the islands in the “First Island Chain” other than the islands of Japan itself.  Those would have been the Philippines.  From the Philippines the Americans could venture out and cut off Japanese access to oil in the Dutch East Indies.  From there the Americans could intercept any traffic coming up from the Indian Ocean or the East Indies.

These facts motivated a naval arms race between Britain, America and Japan.  The Japanese set about establishing contingency plans to neutralize the British presence in Southeast Asia and to take on the US Navy.  One can only wonder, however, that if all three parties could have committed to not cutting each other off from trade, then war could have been avoided.  But, war did break out, and one can see what the Japanese endeavored to do.  The Japanese quickly seized the oil fields in the Dutch East Indies, and they swept the British out of their fortified naval base of Singapore.  They crippled the American fleet of battleships and cruisers stationed at Pearl Harbor, and, more importantly, they seized the Philippines.  Would the Americans and the British then be amenable to cutting a deal that would end hostilities quickly and allow the Japanese to maintain their hold these newly captured territories?  That was Japan’s bet: Cripple American and British capacity to strike back in the near term and raise the costs of striking back at all; hope they beg off fighting back and cut a deal.

The reality, of course, is that neither the Americans nor the British were in any mood to cut deals, and within six months to the day of Japan’s spectacular raid on Pearl Harbor, the tide of war started to turn against Japan.  The Battle of Midway (June 4-7, 1942) should probably qualify, in the words of the Duke of Wellington after the Battle of Waterloo, as “a close run thing”.  Some excellent intelligence work and some very good luck after opening the battle with some very poorly coordinated attacks on the Japanese fleet yielded spectacular success.  American dive bombers descended almost undetected on the decks of Japanese aircraft carriers that were choked with bombs, planes and fuel.  Three of four Japanese carriers were devastated in a single strike.  One carrier escaped the first strike, because it had been obscured by clouds.

Midway may have blunted Japanese offensives in the Pacific, but it was really the months-long battle for Guadalcanal soon after that affirmatively destroyed Japan’s capacity to mount offense and put it thereafter on continuous defense.  Japan never recovered after losing Guadalcanal.  Japanese Empire was then whittled away, island by island.

In my mind, the fight for Guadalcanal involved a naval engagement between a fiercely competent and resourceful Japanese navy and a spectacularly incompetent American navy as well as an engagement in the jungles between a spectacularly incompetent Japanese army and a surprising competent and resourceful contingent of green American marines.  That said, the Americans at sea did show up to fight, and the combination of the American navy and the informal, shoe-string “Cactus Airforce” on Guadalcanal took out both the greater part of Japan’s skilled flyers and much of its skilled navy personnel.  Japan never recovered from these losses.  Moreover, the Cactus Airforce inflicted grievous losses on the Japanese Imperial Army and marines.  Many of them never even made it to shore.

On my bookshelf I have tucked James D. Hornfischer, Neptune’s Inferno: The U.S. Navy at Guadalcanal (2012) next to James Q. Wilson’s classic book Bureaucracy (1989), because both are about organizational failure and success.  I would also refer the reader to Challenge for the Pacific (1965), an account by Guadalcanal veteran Robert Leckie, that concentrates more on the land battle.  Both Neptune’s Inferno and Challenge are engaging.

The Japanese plan to secure access to resources and to fortify its position in the western Pacific unfolded at lower cost and ahead of schedule through the first half of 1942.  The Germans, meanwhile, had shocked the Russians and had made spectacular progress in Eastern Europe.  The “axis powers” seemed unstoppable.  But for that business of weathering “The Blitz” over Britain in late 1940, Britain’s “finest hour,” the allied powers seemed incapable of doing anything about German and Japanese advances.  Until they did.  All those advances were rolled back. Cities were leveled.  Tens of millions perished.

The American president, Franklin D. Roosevelt, died before the wars in Europe or Japan were over, but his administration had already set about establishing the foundations for a regime of free navigation.  The administration committed the United States navy and its allies to keeping sea channels open.  Oil had already been coming out of the Middle East for some time—mostly from Iran—but a prodigious stream of Saudi oil would soon be coming online.  Getting that oil online would fuel the industrial and industrializing countries of the world at lower cost than would otherwise obtain.  Those countries included Japan.

So, when all the warring was over, Japan ended up getting what it wanted after all: unencumbered access to resources and markets.  Everyone got access to these things.  Maybe the naïve economist was on to something: Peace and prosperity for all through voluntary exchange in markets.

It is not obvious that the Soviets ever got the Naïve Economist’s memorandum, and the Soviet Union itself dissolved by 1991.  A US Senator complained something to the effect of, “The Soviets lost the Cold War, and Japan won!”

Right now “a 40-mile long Russian column” is descending on Kyiv.  The Ukrainians have weathered the initial shock-and-awe of the Russian invasion.  The Russians flew tight formations of fighters and bombers over Kyiv to awe the populace and its government into submission.  “Look at us!” they seemed say.  “We fly with impunity over your capital.  We could destroy you at will.  You should surrender now.”

The Ukrainians, of course, have not given up.  Even the Russians must be surprised.  But even the Russians must have contemplated the prospect of getting bogged down and finding themselves having to decide whether or not to bring greater force to bear.  We wait, and all parties, the Russians included, contemplate ways of allowing combatants to disengage and save face.

One can imagine combatants might disengage were they capable of credibly committing to a deal that would satisfy all of those same combatants.  One can imagine the outlines of such a deal: Russia formally absorbs the Crimea and some provinces in the east; Ukraine gives up on joining the NATO/EU/US bloc.  But, can Ukraine credibly commit to that, and, going forward, can the Russians commit to respecting the integrity of countries on its borders?