Sunk-Cost Fallacy Redux

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Quite some
time ago, I read an article
by Barry Schwartz in MSN's online Slate Magazine that made
perfect, clear, logical, and rational sense. The piece was a good
lesson in defining sunk
, a term that applies readily to economics but also works
well when measuring non-financial investments. Briefly, sunk cost
refers to investments or expenditures made which essentially cannot
be recovered.

An example
of a sunk cost could be when you prepay for a ticket to an entertainment
event, such as a movie. That expenditure is a sunk cost. The money
given for the ticket is gone assuming you cannot return it for cash
or sell it to another person. It becomes a sunk cost fallacy if
you attended the movie for the sole reason that you had already
purchased the ticket. This, happening after you subsequently found
that the movie was terrible or the weather turned bad and forced
you to travel in a storm, or for any other reason you would not
have gone to the movie had you not already purchased the ticket.
The rational, logical thing to do would be to skip the movie and
limit your losses to the price of the ticket without adding the
aggravation of driving through a storm, or forcing yourself to view
a movie you knew was terrible.

When a soldier
pays the ultimate price in a war, his/her life is considered a sunk
cost. That is, no matter what the war's outcome, there is no way
to recover the loss of life. Nothing will ever bring it back and
nothing can grow from the loss as though it were an investment.
Our warring president, George Bush has stated that he will not "cut
and run"
from the Iraq mistake because that would be a
disservice to the lives of Americans that were given (or taken?)
for the cause. Bush has stated that "We
owe them something."
Supposedly, if we left the Iraq war,
we would be letting down those Americans who gave their lives. If
we did leave before accomplishing our alleged goals, their lives
would have been lost in vain.

So it becomes
easy to see a debate over the handling of our sunk costs in the
Iraq war. As suggested by the Schwartz article, the logical, prudent
move would be to stop further loss of life, admit the Iraq war is
not winnable, and pack up and leave. Admit that the lives lost are
exactly that — lost. In other words, the sunk costs of a war do
not present a valid reason to continue a war. But whether through
stubbornness, stupidity, or pride this president is committed to
the course."
And from his past behaviors, as evidenced
by his stubborn pursuit of Saddam Hussein and by his relentless
destruction of Iraq, it appears he will not change his mind.

There may be
some defective ingredient in our makeup that makes us susceptible
to the kind of reasoning George Bush is exhibiting. Perhaps there
is a sunk cost gene? How about sunk cost hormone deficiency (SCHD)?
I make this ludicrous suggestion because I have made some fallacious
decisions regarding sunk costs in my own life. My first bout with
this infirmity came in 1969. I was serving the cause for spreading
democracy in The Mekong Delta when the announcement was made that
President Nixon was starting a troop withdrawal from Vietnam. My
division, the Ninth Infantry was to be the first to begin pulling
out. You might think that the logical reaction to this information
for a person who had been drafted into the service, who hated the
war, who had yet to see his baby son would be elation over the news.
Stand by for the strange part: I was mostly confused and somewhat
saddened. The confusion came because it seemed that all the efforts
we had made to drive the enemy out and to "free" the Vietnamese
were being thrown away. The sadness came because the message was
clear that my sacrifice, along with the sacrifices of thousands
of other soldiers had been made for nothing. I had left a crying,
very pregnant wife standing in the cold Buffalo, NY airport just
before Christmas of 1968 to serve in the most unpopular war America
ever fought. Not one molecule of my body wanted to be in Vietnam.
In spite of my misgivings about war, my work ethic proved to be
the dominant force and I quickly evolved into a very effective soldier.
Almost all of the guys I served with were drafted and they also
gave outstanding service to the Army. We lived a contradictory life
of hating being there and hating what we did in spite of doing it
exceptionally well. I know this sounds strange, but war is strange.

One of my teammates
was thrilled to hear of the withdrawals. I argued with him saying
that as soon as we leave, the Viet Cong would take the area right
back. There had been no let-up of enemy contact. We were encountering
the enemy on practically every mission, so I knew we had not "won"
the war yet. His counter to my argument was that the whole thing
was a waste and was never something we could possibly win. He believed
that no matter what we did, the Communists were going to eventually
control Vietnam. He spelled out all the logical rationale for Vietnam
going Communist. It seems that he did not suffer from any sunken
cost-related syndromes.

Even when faced
with valid arguments for leaving the country I had difficulty accepting
the notion that America could not knock off the enemy in the tiny
country of Vietnam. It turned out that my teammate opted to go home
early in one of the phased withdrawals while I bargained to stay
and finish my tour as well as finish my Army obligation. I knew
that I would have struggled going back to America to play soldier
and be expected to shine my boots, polish my belt buckle, and salute
people for whom I had no respect. After a year of slugging it out
in the Mekong Delta mud, in a milieu devoid of most of the rules
of social order, the prospect of garrison life in the Army was incongruous.

At the time,
the acronym-loving Army offered two alternatives for leaving Vietnam
(not counting the body bag or the hospital pajamas options): DEROS,
or ETS. DEROS stood for Date of Expected Return from Over Seas,
meaning after one year of war service the soldier could return to
the states to finish the remainder of his (no girls were drafted)
two-year active duty military obligation. On average, about six
months more stateside duty remained for the lucky chap who had been
drafted. ETS stood for Expiration Term of Service, meaning if you
could ETS out of’Nam, you went back home as a civilian with no
further active duty military obligation. ETS provided soldiers the
prospect of being in war one day and returning to perfectly normal
civilian life the next. Yeah, right.

ETS was the best way out. To offer a carrot to the guys who wanted
to be finished with the Army following their fun-packed war adventures,
the Army presented the ETS option to any soldier who after completing
a year of war had 150 days or less remaining on his two-year stint.
Although that "early out" option may sound like a gift,
I suspect the Army was as happy to be rid of its war-ravaged draftees
as we were to be rid of the Army. In many cases, to get to that
magical total, the guys would extend their’Nam duty a few days
or weeks to break that 150-day requirement. My goal was to ETS out
of the whole military misadventure by extending my time in Vietnam
about two weeks. The plan to ETS right out of’Nam and break cleanly
from the military would have fallen apart if I had gone home early
in a troop reduction.

So I was essentially
driven by two strong, compelling forces to stay in the war: I felt
a need to complete the project we had initiated and at the same
time I wanted to be done with all things military. The two forces
contributed to my fallacious thinking. I chose to stay in the war
so I could ETS. I paid for that mistake by catching a bullet that
remains in my head to this day. I blame no one but myself for what
happened to me and I accept full responsibility for the outcome.
I could have evaded the draft by running to Canada but I let my
personal as well as my national pride control my decisions. I could
have bailed out of the war early but I let my work ethic and my
stubborn determination rule my life. Maybe our mistakes make us
who we are.

My second skirmish
with sunk cost fallacy came in 1975. I was sitting on my sofa watching
the news as the last troops leaving Vietnam were shown crowding
an aircraft carrier and helicopters costing $600,000 each were being
purposely scuttled into the ocean to make room on the deck of the
carrier. Saigon
had fallen
and many of the South Vietnamese who had supported
the US presence in Vietnam were shown trying to cling to the runners
of helicopters to escape with the last Americans. It was a national
disgrace to see the world's strongest super power running in defeat.
It was a personal disgrace for me because I had given so much and
tried so hard to achieve something in the war blunder.

It was the
first time I wept over the war. I felt the uncontrollable tears
burning like some strong battery acid on my face and I struggled
to understand. My (ex)wife saw my emotion and gave me her disapproving
reaction. She told me it was foolish to be upset because it was
never a war we could have won and that I should just move on and
get over it now that America was finally out of it. She did not
have the sunk cost fallacy disease that was controlling me.

If we can accept
that history repeats itself, my experiences with sunk cost fallacy
may shed some light onto today's confounding display of stubbornness
that keeps our country embroiled in the Iraq war. When we hear soldiers
claim that they do not want to "cut and run" from the
war, we need to understand that they have made a tremendous investment
in the effort and that in their view, simply leaving would prove
it was a waste. We can argue the fallaciousness of that view but
it will not change the engaged soldier. The guilt factor also enters
into the equation when we consider changing course and may explain
some of the resistance to changing a war policy. If we do change
course, we are admitting that the previous or current course is
in error. That is the same as saying we were (are) doing something

Now try to
imagine being a soldier who has been told all his or her life that
killing is wrong and that your soul will eternally rot in hell for
killing. Even the most irreligious of heathens generally frown on
killing. But to rationalize your war actions you accepted your nation's
interpretation that war changes the rules. If you kill in war, you
get promotions, medals, and approval. You see, killing in war is
right. See how contradictions arise? What was wrong is now right.
What is wrong, really wrong, is war! To survive the day-by-day
murder and mayhem, you tell yourself that the actions are justified
since it is war. If the course of action is changed, you must now
question your innocence. Deciding that changing course is wrong
is a choice that spares one from carrying the unbearable burden
of guilt and almost evades ownership of immoral actions. This may
offer an explanation for the so-called solid support Bush enjoys
from many veteran groups. The logical mind is not making the decisions
because the emotional mind is dominating and is in control. When
a stubborn president like George Bush hears a soldier say that he/she
wants to stay and finish the job, he assumes he is hearing support
for his war cause. What he is really hearing is the end product
of strong work ethic, pride, and determination. Take away those
three qualities and practically nothing would ever be accomplished.
Manipulate the same three qualities and you can keep a war running
as long as you want.

21, 2006

Woolley [send him mail]
is a disabled Vietnam veteran living in Miami, Florida. He served
with the 9th Infantry Division in The Mekong Delta in
a Ranger unit doing reconnaissance 1968–69 where he received
a gunshot wound to the head leaving one side severely paralyzed.
He is a father of four grown children and grandfather of seven,
including a set of triplets.

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