Haven't listened to the podcast, but
even a tiny chance of a war between the United States and Russia has a huge negative expected value.
seems like a version of the Pascal's wager. You (or Dan) fail to account for the potential higher-likelihood but moderate-utility benefits the US leaders have in mind which dominate the probability landscape.
The upside benefits to the U.S. seem thousands of times lower in magnitude to the harm of another cold war between the United States and Russia, and millions of times lower than the harm of a nuclear war.
The logic of Pascal's wager only (potentially) breaks down when you get to really, really small probabilities which we don't have here.
How do you estimate the probability of a nuclear incident resulting from the current US actions?
Ideally, use a betting prediction market. But since this is probably not what you meant here are my guesses:
The odds of Russian intervening militarily = 40%.
The odds of the Russians losing the conventional battle (perhaps because of NATO intervention) conditional on them entering = 30%.
The odds of the Russians resorting to nuclear weapons conditional on them losing the conventional battle = 20%.
Ah, I see, given these estimates, I can understand why this does not look like a Pascal's wager to you. It seems to me that the odds look so grave to you because you gloss over several steps during this potential escalation. For example, "Russians intervening militarily" could be anything from posturing to weapon shipments to a surgical strike to a Czechoslovakia-style tank-roll or Afghanistan invasion. My guess that the odds of the latter is below 5%, as it has not happened since (Chechnya was the closest case and that was a Russian territory actively hostile to Moscow). Similarly for every other case. Note that the scenario you describe (Soviets invading and losing) happened in a much more tense atmosphere in Afghanistan, and there isn't even a hint of the Soviet leaders at the time seriously considering nuclear escalation. So, the historical reference classes do not seem to bear out your estimates.
I will bet you $20 U.S. (mine) vs $100 (yours) that Russian tanks will be involved in combat in the Ukraine within 60 days. So in 60 days I will pay you $20 if I lose the bet, but you pay me $100 if I win. Agreed?
I'll agree to those terms. I'd also take a 1/5th chance of $100 in lieu of $20 (e.g. you pay $100 if no Russian tanks have been involved in combat in the Ukraine by April 28th and the first digit after the decimal of the S&P 500 is a 0 or 5 at close that day).
Agreed with the following two clarifications. (1) By first digit I assume we mean to the left of the decimal point so if the S&P 500 is 1864.33 at close the first digit is a 4 and (2) and by Russian tanks we mean tanks operated by Russian troops not a tank built in Russia.
I think it's a tie since tanks were not involved in combat (although they did invade) but the S&P 500 Index closed at 1,869.43 on April 28th.
To lessen transaction costs. Sending money to strangers over the internet is expensive, especially in terms of time. We're avoiding that cost most of the time I win the bet.
Perhaps I could have negotiated to capture some of the saved value, but (1) I'm nice, (2) I'm less well known than shminux and so come with a greater risk of default, (3) this method saves me time too.
I don't like variability in my income, but +-$100 is small enough that my utility function is pretty much linear.
http://jalopnik.com/this-helicopter-armada-in-ukraine-is-absolutely-terrify-1533287720
edit:
#Pentagon confirms massive (#Russian) sea&air push into #Crimea.Other sources:12 aircraft,up to 2000 airborne troops involved -@2kdei |PR
edit: thanks!
I have no interest in betting money on political developments, even though I think I'd likely win in this case. Just enter your prediction in http://predictionbook.com.
It seems to me that the odds look so grave to you because you gloss over several steps during this potential escalation.
Have a look at this: http://www.zerohedge.com/news/2014-02-28/ukraine-acting-president-says-russia-starts-aggression-against-country-russian-plane Original source: http://www.pravda.com.ua/rus/news/2014/02/28/7016674/
Posturing or not, if this info checks out then by existing treaties USA and UK are obliged to help Ukraine against Russia. You see, Ukraine gave up nukes in exchange for safety guarantees from Russia, UK and USA.
http://en.wikipedia.org/wiki/Nuclear_weapons_and_Ukraine
Before voting on accession, Ukraine demanded from Russia, the USA, France and the United Kingdom a written statement that these powers undertook to extend the security guarantees to Ukraine. Instead security assurances to Ukraine (Ukraine published the documents as guarantees given to Ukraine[5]) were given on 5 December 1994 at a formal ceremony in Budapest (known as the Budapest Memorandum on Security Assurances[6]), may be summarized as follows: Russia, the UK and the USA undertake to respect Ukraine's borders in accordance with the principles of the 1975 CSCE Final Act, to abstain from the use or threat of force against Ukraine, to support Ukraine where an attempt is made to place pressure on it by economic coercion, and to bring any incident of aggression by a nuclear power before the UN Security Council.
Of course more likely then not we'll find out once again that treaties and words aren't worth anything unless you have the upper hand... but this looks scary enough to me.
A Dan Carlin Podcast about how the United States is foolishly antagonizing the Russians over Ukraine. Carlin makes an analogy as to how the United States would feel if Russia helped overthrow the government of Mexico to install an anti-American government under conditions that might result in a Mexican civil war. Because of the Russian nuclear arsenal, even a tiny chance of a war between the United States and Russia has a huge negative expected value.