Tyranny of numbers

Thomas Schelling (1921-2016) and the Iran nuclear deal

Posted in General, Sanctions by Djavad on December 21, 2016

Thomas Schooling, who died last week at the ripe age of 95, was the winner of the Nobel Economics prize in 2005 and the economist who “saved the world,” as fellow Nobelist Roger Myerson put it.  In his essay honoring Schelling, Myerson wrote that his classic book, Strategy of Conflict (Harvard University Press, 1960), “should be recognized as one of the most important and influential books in history of social science.”

Schelling came to Harvard’s economics department in 1960, and later helped found the Harvard Kennedy School (where I am visiting this academic year).  He is also credited with the establishment of public policy as a legitimate and rigorous field of study, one that Iran’s education system undervalues.

When I was in graduate school here, in the 1970s, he was one of several residents of Littauer (the building that then housed the economics department and the School of Government, before the latter became HKS) who whisked about the building wearing bow ties and shuttled back and forth to Washington to give advice.  Although he liked to think of his role in government as helping decision-makers learn about choices and understand their consequences, he has been criticized for his role in the Vietnam war.  He had supported the bombing of North Vietnam based on the theory (in the hope?) that Ho Chi Min would see it as a signal and would thus deter his further actions. In the event, the North Vietnamese saw it as the American desire to destroy their country and fought harder.

Which takes me to Schelling’s connection to Iran and his advice for how the US should approach negotiations with Iran, in particular avoiding humiliation and overuse of threats.

 

In January 2008, he visited Iran at the invitation of Sharif University’s School of Management and Economics, at the height of the nuclear standoff.  You see him here gracefully accepting an honorary PhD from Sharif.

schelling

At the time it was reported in the Iranian press that he was critical of the US sanctions against Iran, but as far as I can tell this is not a policy implication the models of conflict for which he is famous (I cannot find any references in English to this effect).  Sanctions were quite mild in 2008 compared to what they morphed into a few years later.  He learned from his trip that foreign policy decisions in Iran are made by Ayatollah Khamenei, the supreme leader, and not by the firebrand Mahmoud Ahmadinejad.   He knew that in any conflict, identifying the actual decision makers was critical to its resolution or at least peaceful coexistence.

There were more important ways in which Schelling’s thinking was relevant for the Iran nuclear dispute.  Having learned a lesson from his Vietnam intervention, he offered more tempered counsel on how a powerful county like the US confronts a smaller adversary like Iran.   He criticized those threatening war to stop Iran’s nuclear program and considered the US refrain of “All options are on the table” unwise, preferring to say, ‘No – we’re negotiating through the U.N.; we’re not going to do anything unilaterally.”  As the talk of regime change is returning to the highest levels of US foreign policy making, thanks to Trump’s cabinet appointments, Schelling’s counsel is worth remembering.

One of the ideas for which Schelling is famous is coordination without communication and how people with opposing interest find ways to cooperate.  For example, people who lose each other in a large city can nevertheless find each other by converging on a place each expects the others to think of as a likely point of default, the “Schelling point.” In disputes between nations, his model showed how adversaries communicate by threats without having to talk directly to each other.  Nevertheless, to avoid accidents, his policy advice was for direct communications, as in the famous Hotline between Moscow and Washington.

Iran is not a nuclear power, but misunderstandings and accidents threaten the nuclear deal reached in July 2014 daily.   Direct communication between top US and Iran nuclear negotiators, thanks to personal rapport between Kerry and Zarif and Muniz and Salehi, has been credited with not only reaching the nuclear accord, but also of keeping it from unraveling due to small but inevitable mishaps. For example, the overproduction of heavy water reported by the IAEA in November could have triggered punitive action on the part of the US and escalated into the full blown crisis had it not been for the ability of the parties to talk and settle the issue before it got out of hand.  The loss of such communication will be one of the many casualties of the US presidential election, as the creators of the JCPOA are replaced with its adversaries.  This will be a serious threat to the nuclear deal even if Trump does not follow through with his election promise to tear it up.

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