Dear John,
For deciding strategy in an adversarial situations, the branch of mathematics known as game theory always gives better results than "hunch theory." Today a game is afoot over Iran’s nuclear aspirations, and hunch theorists by and large have concluded that confrontation is the appropriate strategy for the west. However, applying game theory to the problem shows that under all scenarios, a properly-conceived strategy of “consorting” with Iran beats any strategy of confrontation.
Hunch theory approaches Iran's nuclear program from the premise that if Iran's leaders are telling the truth when they say they are only interested in uranium enrichment for electricity, co-operation is a better strategy than confrontation. And vice-versa. Since hunch theory judges the cost and the probability of wrongly guessing "telling the truth" to be greater than the cost and probability of wrongly guessing "lying," co-operation must be the wrong strategy.
I think this analysis is wrong. Whether the Iranian leadership is lying or telling the truth, the consortium strategy trumps any strategy of confrontation, whether by sanctions, intimidation, Elizabeth Cheney's "democracy promotion" (subversion) or Richard Perle riding astride Boeing's Massive Ordnance Penetrator (aka "Big BLU") to its target at Natanz.
How A Consortium Would Work
The core concept in a "properly-conceived policy of consortium" is the idea proposed by Iranian president Ahmadinejad at the UN in September 2005, whereby an industrial-scale uranium enrichment facility would be built and operated in Iran by an international consortium including Iran as a member. However, I would accept Ahmadinejad's proposal but with four conditions attached: 1) the IAEA must be allowed to conduct an "intrusive" inspections program; 2) the consortium must not use any technology not already in Iran's possession; 3) the consortium's facility must be easily destructible from the air; and 4) Iran must acknowledge our right to destroy the facility if Iran breaches the agreement, for example by seizing control of the facility, or by engaging in separate, secret activities to manufacture weapons-grade uranium.
Telling the Truth
If Iran's leaders intentions are truly peaceful and they accept these conditions, the consortium strategy clearly beats any confrontation strategy. Iran gets the reactor-fuel fabrication program it wants, we begin a positive engagement with Iran for the first time in 27 years, and we open eyes and ears on Iranian soil to gather real intelligence (the absence of which in Iraq after 1998, when we blinded ourselves by withdrawing inspectors, contributed mightily to the current disaster in that country.) As a dividend, the $15/bbl Strait-of-Hormuz-conflagration premium on the NYMEX futures market will evaporate.
But even if Iran's intentions are peaceful, the destructibility condition may offend their pride or put them in a position of vulnerability they are unwilling to accept, in which case they may reject the offer. However if they do, the result of the consortium strategy compares favorably with the result if we had pursued confrontation. All confrontation options would remain available, and we would have gained legitimacy by showing a willingness to cooperate, while Iran would have lost legitimacy for allowing pride or paranoia to block a win-win solution. The internal position of Ahmadinejad and his fellow hard-liners may be weakened as well, as he is already being challenged on grounds that he is over-playing Iran's hand.
Some will say that legitimacy in the eyes of the rest of the world is irrelevant in determining how a nation secures its own interests. While I disagree, the disagreement is irrelevant to the argument I am making here. If you don't believe that legitimacy matters, we will call this a draw. Co-operation and confrontation lead to equally good or bad outcomes if Iran's leaders are telling the truth but reject our offer.
But those who believe that legitimacy matters will note that if Iran rejects our offer, the balance of legitimacy will tilt in our favour in an important way. Not many people around the world argue that Iran should simply be trusted, but hardly anyone outside of what Condi Rice refers to as the "international community" (professional politicians, diplomats and international relations experts in the USA and Europe) accepts the legitimacy of our current posture of saying, "Iran is lying about its true nuclear intentions, and cannot be trusted to enrich its own uranium. If Iran admits that it is lying and cannot be trusted, then diplomacy can begin." Rice's "international community" takes Iran's defiant reaction to this as further proof of the premise that Iran can't be trusted. Most of the rest of us are shaking our heads in bewilderment as to how the "international community" can call this a form of diplomacy, or expect to it to lead to anything but a nuclear-armed Iran.
Lying
The crux of my argument is that even if Iran's leaders are lying, consortium-with-conditions leads to better outcomes in some scenarios, and no worse outcomes in any other.
First consider what happens if Iran is lying about its intentions and rejects the offer of consortium-with-conditions. As discussed, we cannot be worse off than if we had pursued confrontation because confrontation would remain an option. The balance of legitimacy both outside and inside Iran will likely have tilted in our favour, giving greater weight and credibility to confrontation strategies than if we had not first tried the consortium. At best, therefore, consortium gives a better outcome than confrontation in this scenario. At worst its outcome is no worse.
Now consider what happens if Iran is lying and accepts our offer.
Clearly there is a risk that Iran will succeed in fooling IAEA inspectors and setting up secret centrifuge fabrication and uranium enrichment facilities that will go undetected. This risk is greater than zero, but not as great as VP Cheney suggested in the fall of 2002 when he declared with respect to Iraq that "inspections don't work." Indeed no reputable analyst has warned that Iraq, Iran or any other nation could successfully conceal a centrifuge fabrication and uranium enrichment program from an adequately-resourced IAEA inspections team with intrusive rights.
However, while the risk of a successful secret weapons program under the nose of intrusive inspectors is greater than zero, the risk of a successful weapons program conducted in the open and with no inspectors to worry about is surely greater still. If Iran wants weapons, any confrontation policy short of Big BLU ( i.e. sanctions, intimidation or subversion) will make it easier for them to reach the goal than if Iran accepted our offer and then cheated successfully. Even if they lie and cheat, if Iran accepts our consortium offer we are better off than under any confrontation strategy except for Big BLU. And Big BLU only beats consortium in a scenario where Iran successfully conceals weapons-grade enrichment from intrusive inspections -- a scenario that only VP Cheney finds credible.
Next there is the "break-out problem" -- the concern that an enrichment consortium will transfer knowledge and technology that would enable Iran to accelerate its weapons program after expelling the consortium partners.
This problem is not a problem so long as the consortium teaches Iran nothing new and builds nothing they don't already know how to build. Hence the "no new technology" condition. The purpose of the consortium is to build and operate an enrichment plant that can support the annual 3.5%-enriched U-235 requirement of 1,000 MW and 10,000 MW of nuclear power plant capacity. Last week Iran demonstrated that it has achieved this for 1.0 MW of power plant capacity using P-1 centrifuge technology. If the consortium uses the P-1, it will contribute no new knowledge or technology, but rather set up a many-times replication of what Iran already has and knows. (If Iran asks that the consortium be allowed to use the five-times faster P-2 centrifuge technology, it should be up to the IAEA to decide if allowing this will give Iran new knowledge. Iran has reportedly obtained P-2 prototypes from AQ Khan, but the cascade that has produced 3.5% U-235 at Natanz uses P-1.)
Finally, there is the concern that a massively-replicated low-enrichment facility built by the consortium could be seized by Iran and converted to a high-enrichment facility capable of fueling a weapons program. Hence the condition that the consortium's facility must be readily destructible from the air. Not only this, but it must be possible to make and carry out the decision to destroy quickly, without the fuss witnessed when the USA and UK sought UN approval for the invasion of Iraq in the winter of 2002-3. If the consortium's foreign personnel show up for work one morning to find that the Republican Guards have seized the facility and begun loading centrifuges onto trucks, it must not be necessary to persuade Dominique de Villepin or Vladimir Putin to agree before Big BLU can do what is necessary.
One way to achieve this is for the Security Council to pass the following resolutions:
1. The Director General of the IAEA must notify the Security Council immediately on finding evidence that Iran is in material breach of the consortium agreement. "Material breach" includes:
Ø Discovery by inspectors of nuclear fuel manufacturing facilities not previously disclosed, including uranium conversion, centrifuge fabrication and uranium enrichment facilities;
Ø Actions by any agency of the Iranian government or by any Iranian citizen that impede the consortium or the IAEA inspectors from carrying out their mandated activities.
2. Unless the Security Council votes otherwise (and unanimously, as is the rule), the air forces of any NATO member country are authorized to attack and destroy the consortium's facility after 24 hours have elapsed from the time when the Security Council receives such notification from the IAEA DG.
If Iran attempts a “break-out,” the facility will be destroyed in accordance with UN Security Council resolutions, and those who would challenge the legitimacy of such action are in a weaker position. “Consortium now” puts us in a better position to pursue confrontation if it becomes necessary than “confrontation now” (when it is not necessary).
Conclusion
In case you hadn't noticed, this essay is organized loosely around a 2 x 2 x 2 x 2 matrix (being mathematicians, game theorists don’t find this strange) with rows headed "consort" and "confront," (our strategy choices), columns headed “telling the truth" and "lying," (Iran’s strategy choices), columns in the z-axis headed “accept” and “reject” (more strategy choices for Iran), and columns in the zz-axis headed “play by the rules” and “cheat” (also Iran’s strategy choices).
Working through the analysis of each cell of the matrix shows that the “consort” row is what game theory would call a "dominant" strategy. Whether Iran is lying or telling the truth, whether they accept or reject our offer, whether they play by the rules or cheat, the consortium strategy proposed here leads to no worse results than any confrontation strategy under any scenario, and leads to better outcomes under many scenarios.
Readers will find many problems with the strategy I propose. But I leave them with this question: compared to what?
Dan Badger
London
May 1, 2006
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