Iraq Cost-Benefit Analysis and Net Present Value: The Only Reason to Be For or Against Continuing the War
I’ve been watching the PBS series Carrier, which follows the USS Nimitz through a Persian Gulf deployment in 2005 (note: this post was written a while back). One of the things that’s most striking is how the crew splits up in terms of their views on the war. Also striking is how neither side’s opinion is based on the only thing that matters: whether the benefit of the war is worth the cost. Unsurprisingly, their opinion bases seem to echo everything that’s heard among people with mouths who aren’t in the military.
Stated Reasons for Continuing the War:
- Because “The Surge” is working. (Seriously, this was presented as an actual reason to continue the war in a Wall Street Journal opinion article.)
- In order to spread democracy to Iraq. (So how come we’re not invading Russia and spreading democracy there? Oh, right, because they’re already democratic — sort of like the German Democratic Republic was, I guess.)
- Because of 9/11. (?)
- To stop the terrorists.
- To establish a strong relationship with another oil-rich nation.
Stated reasons for ending the war:
- Because it’s an imperialist, racist war.
- Because too many Americans and Iraqi civilians have died.
- Blood-for-oil is wrong.
- Because we’re just encouraging the terrorists and ruining our international reputation.
- Because it’s illegal.
The problem with all of these reasons is that none of them get down to the details that matter. Instead, they’re all just bumper sticker-quality sound bites that seem to serve only to unite the masses within their respective teams. Ugh: humanity. It’s not about your team, it’s about good decision-making.
The only valid reason for continuing the war in Iraq is the belief that, from this point forward, the benefit to waging the war outweighs its cost. The only valid reason for pulling out of Iraq is the belief that, from this point forward, the cost of waging the war outweighs the benefit. While many of the above reasons hint at benefits and costs, none of them glance at the other side of the balance or are considered to the point of actually understanding the details from which to derive an actual value. If we’re going to argue mindlessly with opinions rooted only in our environmental and cultural biases, at least we could argue to those specifications.
Or, better yet, we could seek rational figures and probabilities that would help us determine the best course of action. It’s not hard to reduce the value of the Iraq war from this point forward to a mathematical equation in order to weigh the benefit against the cost: it’s just a net present value (NPV) evaluation. All we need to do is understand and quantify the costs (from this point forward) and then understand and quantify the benefits (form this point forward).
“From this point forward” because everything that’s already happened is a sunk cost and can’t be changed at this point.
(Re-read this after doing the thing about posts I hadn’t posted yet and there-during impressed myself. It’s still relevant enough, I guess — and there’s always Afghanistan.)