Tyler Cowen: uncertainty

Transcript context

…Maybe actually, the use of tactical nuclear weapon by Russia against Ukraine. If you outline all these scenarios, I just do not anticipate the United States using the nuclear weapon. Think of all the military defeats that the United States had experienced over the decades, and they still did not use the nuclear weapon, be it Vietnam or Afghanistan or whatever kind of military endeavors they had. North Korea — I think that North Korea would not go for the nuclear weapon because the moment when they decide this, they will be annihilated not by one, but by two critically important players because the whole lifeline for North Korea is coming from China and, by extension, from Russia. Neither China nor Russia will actually allow a small player in international relations to use the nuclear weapon because there is a scalability in the international relations. You are allowed, as a smaller player, to do some steps to create some havoc in the regional environment if it’s in the interest of some of your supporters, as is the case right now in North Korea. Why is North Korea receiving all this technological transfer and the whole political and diplomatic support from countries like China and Russia? Well, it’s obvious, activating the North Korean card plays into the cards of Beijing and Moscow because North Korea creates tensions in the Indo-Pacific and overstretches the attention of the US leadership. It also complicates the situation with South Korea. South Korea, together with Japan, are the most important Indo-Pacific allies of the United States. So long as North Korea plays its card smartly and in its allowed, let’s say, scope of activities, things will be fine, but I just don’t see why North Korea would actually be eager to use a nuclear weapon. Maybe, just because we are at the level of speculation, right? If we are at the level of speculation, one region that would probably see nuclearization, will witness more nuclearization, is actually the Middle East because Iran has never been closer to getting the nuclear weapon. Given the most recent escalatory part between Israel and Iran — Israel has the nuclear weapon, Iran still doesn’t have the nuclear weapon — we may argue that this could be one such scenario. Again, I don’t consider it to be probable, but because you want me to speculate, I will do this with big pleasure just for the sake of intellectual exercise, to outline a scenario in which Israel would consider using the nuclear weapon for the sake of not allowing Iran to do so. Now a question about your work at FACE. We’re recording a day after the Iranian helicopter crash, and we don’t know what happened. It might have just been a helicopter crash because of bad weather and fog, but surely you have clients calling you, messaging you, pinging you, wanting to know what’s going on. What is it you do in the course of the day to be able to respond to them coherently? What concrete steps do you take to have a message that is more interesting or more informative than what they might see on Twitter? Well, first and foremost, what I post on Twitter is not what I actually discuss with my clients off the record. That’s very important because I have networks. I have 25 years of professional background, and I have networks of people who have a proven track record of analysis and assessment, and they are very often also on the ground. What I do is, of course, get as credible information as possible. My clients usually ask exactly these kinds of questions as you’re doing right now. In the example you gave, will there be an escalation between Israel and Iran? Will there be political turmoil in Iran following this helicopter crash? Will there be a next military episode between Israel and Iran? What will be the cascading effects beyond the region? Or the question that you asked about the military conflict and the possible military attack on Taiwan. These are questions that come out almost every day. Practically, what I post on Twitter is linked to information I read. These are open-source analyses and mostly assessments by other colleagues or articles being published. I just go through these sources, and I post and comment. That’s not the same as when you have to give an answer to a client, for instance, who has certain exposure in a particular region or has an investment portfolio and this investment portfolio is, for instance, affected by certain military conflicts, and so on and so forth. So it’s a very different way of consulting. Twitter, which is now X, is just for fun. This is my rescue from the day because the whole day I just read and read and read a lot of sources, a lot of information. I have a lot of chat rooms on various telecommunication platforms. Of course, with time, I can easily identify whether the source is credible or not. I use five different languages. It’s a very, very diverse way of getting information. I know, for instance, when it comes to a certain conflict or a certain region, which sources to use and which platforms are credible. That is a very, very different kind of approach if, for instance, a common user on Twitter will just check on Twitter and start reading through the sources. Thanks to this kind of long-term experience, it’s very easy for me to track and understand what is credible, what is not. This is only one of several pillars of my activities at FACE. Yes, I have private clients within FACE, but these are individuals from different backgrounds, different professions, who are mostly interested in this world of geopolitics and do not have the same amount of time to read and to go through all these sources. They just rely on my assessment for specific topics. Now, I must also highlight that the daily business of politics is not my main field. My main field is actually the long-term, 10- to 15-year macro perspective.…

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