TCS Daily


Playing to Lose

By Stephen W. Stanton - March 31, 2003 12:00 AM

War is not a video game. However, it is becoming increasingly difficult to tell the difference.

One war game in particular is so graphic - that is, realistic - that the German government restricted its sale and outlawed its advertisement completely. Players of Command and Conquer Generals can command U.S. forces or even lead a terrorist organization.

Whether you play the good guys or the bad guys, money counts. According to the game's creators, "virtually everything the player does in the game can be equated to a monetary value". Of course, there are more important factors than money in the real world. But the basic lesson holds true: To win a war, gather as many resources as possible, and make the most out of what you have. (Destroy the competition while you're at it.)

It's the Economy, Stupid

This sounds an awful lot like economics. And it should. For centuries, war planners have used basic economic concepts to their advantage. American military superiority goes far beyond training and equipment. U.S. forces exploit the economic lessons learned in a capitalist society.

For example, an army (like a business) should take actions for which marginal gains exceed marginal cost. Dumb bombs cost just a dollar a pound. However, they miss their targets more often than not. It simply is not cost effective to fly a dozen sorties to hit a single target. Therefore, coalition forces apply W. Edwards Demming's lesson on quality: Get it right the first time, even if it costs a little extra to do so. While precision munitions cost more per unit, their effectiveness more than makes up for it. For just a few thousand dollars more than a single dumb bomb, one JDAM can reliably kill what could otherwise take a hundred bombing runs. In economic terms, precision munitions drive up productivity.

Productivity also benefits from the specialization and division of labor. American soldiers are trained to do one job at a world-class level. Pilots concentrate on flying. Riflemen practice marksmanship. Logistics personnel optimize the supply lines. As a result, Coalition forces function like a precision-engineered machine. In contrast, the Iraqi forces are not nearly as specialized. A motley assortment of generic soldiers simply cannot match the Coalition's capabilities, both on the front lines and behind them.

Allied forces are also much farther along the "learning curve". Through trial, error and common sense, bad ideas are weeded out and good ideas are reinforced. The modern military reflects decades of experience with respect to what works and what does not. For example, British troops now wear desert camouflage instead of garish red coats. Military tactics have also improved with time for those who pay attention.

Of course, having lost a million people in several unsuccessful wars of aggression, Saddam has proven he cannot learn from his mistakes. Nor can those still loyal to him. As a result, military casualties are more than twenty to one in the Coalition's favor, even with restrictive rules of engagement to protect civilians. The ratio for POW's is even more lopsided, with recent estimates topping two hundred to one.

The Coalition also benefits from economies of scale. All forces are subject to a single, unified command structure. General Franks can leverage the full power of the entire campaign in coordinated actions, operating like a wolf pack. Divisions complement each other, and air support can be flown where needed. As a whole, the Coalition is more effective and efficient than the sum of its units.

On the other side, Saddam's forces are scattered , with a redundant command structure. The Fedayeen irregulars cannot coordinate their actions with the Republican Guard or the regular army. These groups did not train together, and they seem to make battlefield decisions autonomously. As the U.S. pursues various "forces multipliers", Saddam has weakened his military by imposing structural "force dividers".

The U.S. army also benefits from economies of scope. For example, helicopters, tanks, and other vehicles all use the same type of fuel. All four military branches behind enemy lines can be served by a single fleet of fuel trucks. While complexity can be difficult to manage, our forces have used it to their advantage.

Similarly, Air Force surveillance and CIA operatives provide real time intelligence to the troops on the ground. Information also flows in the other direction as infantrymen provide bomb damage assessments and call in further air strikes. This information sharing exploits network externalities. As individual soldiers provide real-time feedback, all forces benefit from the informational advantage, striking enemy divisions when, where, and how they choose. (It's like playing hide-and-seek with Superman's X-ray vision.)

Saddam's forces gain no such advantage from their convoluted and fragmented structure. Complexity for its own sake is pure cost, no benefit. (No economies of scope) Divided loyalties and deep suspicions prevent Iraqi troops from sharing actionable information with other divisions. (No network externalities.)

Playing to Lose

While the analogy between economics and warfare is not perfect, it is instructive. On one of the few occasions Osama Bin Laden made sense, he called Saddam Hussein a socialist. Though Iraq sits atop trillions of dollars in oil wealth, Saddam's mismanagement has limited GDP per capita to less than a quarter of its nearest neighbors, Kuwait, Saudi Arabia and Qatar. Saddam's abysmal grasp of economics impairs Iraq's military capabilities as much as its finances.

To compensate for his military impotence, Saddam has resorted to Stalin's WWII "Dorito defense" ("Crunch all you want. We'll make more"). This strategy stands in diametric opposition to Donald Rumsfeld's Transformation initiative. Video gamers already know which is the better strategy.

A report leaked in 2000 accused Saddam of using thousands of Playstation 2 consoles to build weapon systems. Perhaps he should have hooked one up to a TV in his bunker. It just might make him a better general.

If this war were a video game, it would not even be interesting. Saddam is playing to lose.
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