Sunk-Cost Fallacy Redux

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 cost, 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 "staying 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.

Obviously, 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 wrong.

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.

April 21, 2006