It is still instructive, however, to consider foxes’ integrative tactics up close. Foxes thought that the propensity of hedgehogs to stake out strong positions on “unresolvable foundational issues”—such as the role of human agency in history or the rationality of decision making—was silly. They gravitated instead toward split-the-difference judgments. As the next series of examples underscore, these split judgments were not always right but few were totally wrong and many were spookily prescient.
INTEGRATIVE RESOLUTIONS TO “WHEN DO LEADERS MATTER?”
Although there was wide consensus that leaders are constrained by powerful societal forces, foxes usually balked at the “actor dispensability thesis” that treats leaders as mere conveyor belts. They insisted that sometimes it matters who is in charge and that we should not fall into the trap of either idolizing or demonizing leaders. Good judges are attuned to the power of their own personal predilections to bias their assessments. They recognize that whether leaders ascend to greatness or descend into pettiness depends on complicated match-ups between the inner machinations of leaders’ minds and the external machinations of the social system.34
USSR (1988). The greater emotional detachment of foxes proved helpful during the endgame phase of the glasnost and perestroika period. Some foxes had a remarkable flair for piecing together discordant arguments that deeply divided the academic and intelligence communities. On the one hand were liberal Sovietologists, who quickly picked up on the significance of Gorbachev (indeed, consistent with the broken-clock theory of forecasting, a few had been predicting the “Moscow spring” that arrived in 1985 for decades). These observers felt that the Soviet system could be both reformable and viable. On the other hand were conservatives, who worked with an “essentialist” view of the Soviet Union and who had a visceral dislike for “Steve Cohen pluralistic Communism” scenarios. Some subscribed—right through the 1980s—to peredyshka or breathing-spell arguments that portrayed Gorbachev “as a neo-Stalinist in Gucci garb.”
Certain foxes were well positioned to integrate these contradictory assessments. They agreed with the left that Gorbachev was an earnest reformer and with the right that the Soviet Union was an old-fashioned empire with virtually no legitimacy outside Russia and dubious legitimacy inside Russia. These observers in 1988 foresaw that liberalization would release pent-up forces that would eventually tear apart the Soviet Union (or lead to a desperate coup by orthodox Communists to stave off disintegration). Great improvement though Gorbachev was over his predecessors, he was doomed to fail. Now that the genie of liberalization had been unbottled, it would be impossible for the top-down liberators in the Kremlin to achieve legitimacy in the eyes of populations that had for decades felt like prisoners of the Soviet Union. Gorbachev was trying, in Yeltsin’s words, to square the circle. One farsighted fox opined that perhaps, if Andropov had possessed stronger kidneys, “he might have been able—like Deng—to pull off economic reform and keep the political lid on. But if you wanted to dismantle the Soviet Union cleanly and quickly, you could not have found a better General Secretary than Gorby if you had called up central casting in Langley (CIA headquarters). Small wonder that the Kryuchkov gang thought he was a spy.”35
Overall, foxes were more open than hedgehogs to psychological analyses of leaders. They felt most leaders had considerable wiggle room. Preferring explanatory closure, hedgehogs found this insistence cloying. It opens the door to butterfly effects—cancerous tumors, love affairs, and assassins’ bullets—likely to trick ordinary folks who know firsthand the power of tiny causes to alter the courses of human lives, but who do not possess the professionals’ bag of theoretical tricks for bringing history back on track with higher-order what-ifs (see chapter 5).
South Africa (1988). Many foxes wove optimistic and pessimistic themes into their assessments of South Africa. They mostly concurred with optimists that white-minority rule was doomed. The new generation of Afrikaner leadership—the “verligte” (enlightened) faction within the National Party—was not nearly as prickly and combative as the old P. W. Botha generation. The new generation could read the writing on the wall: the differential growth rates of the white and black populations, the burgeoning black townships brimming with resentment, and the mounting international pressures for an end to minority rule.
Foxes discounted—although they did not assign zero likelihood to—then influential forecasts of a white backlash that declared: “As soon as de Klerk comes close to an agreement with the African National Congress [ANC], hardliners will stonewall and raise the specter of black Bolsheviks establishing another banana republic.” The backlash pessimists foresaw an impasse, with a gradual partitioning of the country into zones of influence accompanied by violence, “the kind of low-grade civil war all too common in sub-Saharan Africa.”
Foxes assigned less likelihood to the bleakest scenarios because they had reasons for thinking that moderates in both the ANC and National Party had the political clout to prevent events from sliding into the Hobbesian abyss. Some reasons were structural: the end of the cold war and the waning of Soviet strength made concerns about “black Bolsheviks” sound shrilly anachronistic. Other reasons were interpersonal: the can-do technocrats in the National Party would strike a deal with the Mandela wing of the ANC that would contain enough constitutionally mandated assurances to the white community to marginalize the extremists.
Seeing through the endgame of white-minority rule, in rough outline, was an achievement.36 In passing, it is worth noting though that the foxes’ optimism was characteristically tentative: they shared some of the pessimists’ fears about the future—fears that, in contrarian fashion, they expressed even in the happy transitional year of 1994. One fox opined: “If Nelson had Winnie’s personality, South Africa under ANC rule would look like Nigeria in fifteen years, maybe less.” The foxes worried that, after Mandela, corruption would deepen, white flight would ramp up from trickle to flood, business confidence would erode, and the ANC would resort to “Mugabean” demagoguery to solidify its base. These foxes also worried about the fraying of law and order and about public health collapsing under the AIDS epidemic.
Sharp regime changes are rare events. Although foxes were more open to the potential for transformational leadership to produce sharp change in the Soviet Union and South Africa, they were not clairvoyant: they did not always assign high probabilities to what happened, just higher than many others assigned. It also merits note that in other contexts, such as Japan and Nigeria, foxes shifted toward the other side of the opinion continuum and stressed the risks of “more of the same,” of policy drift in leadership vacuums.
Japan (1992–1993). The big question was whether the stock market collapse and recession marked the end of the Japanese miracle. The modal answer was no. Most experts expected that Japan would recover, but the majority was thin and it should not mask deep divisions between optimistic and pessimistic hedgehogs, or the more subtle distinctions among foxes who occupied their customary centrist positions.
Pessimists insisted that Japan had reached a turning point. From 1950 to 1990, it had grown richer at a 7.6 percent annual average rate, a record still unsurpassed in the economic history of the world. Slowing growth was to be expected with the narrowing income gap between Japan and other rich countries. One respondent observed: “Japan is no longer playing catch-up: it faces the challenges of economic maturity…. Adaptation of foreign technology can no longer be the principal engine of growth. There are too many low-cost competitors, and things are only going to get worse.” This pessimist argued that politicians would soon start meddling with policy prerogatives of the technocrats in the hallowed Ministry of International Trade and Industry. “The politicians acquiesced when the technocrats delivered the goods. But this arrangement will unravel as growth slows and the population ages.” A blunter observer announced: “The special-interest pigs are jostling at the budgetary trough. The competition for scraps will get nasty.”
The ultra-pessimists fear
ed that the real estate and equity bubbles were far from deflated and that bad debts would drive the banking system into bankruptcy, Japan into depression, and the world into recession. They foresaw policy paralysis. “The Liberal Democratic Party [LDP] will be held responsible for this debacle. But no other party will be strong enough to pick up the pieces.”
Optimists countered that the secrets of Japan’s success were cultural. Japan would not grow as quickly as before, but it would still outperform big industrial economies over the long term. The optimists also believed that Japanese policy makers had “deflated the speculative bubble that had enveloped its financial markets.” In 1990, the land prices in Tokyo were reputedly so high that the grounds of the Imperial Palace were worth more than all the real estate in Los Angeles. By 1992, these prices began falling, although even optimists felt not far enough.
As usual, the foxes carved out their niches in the crevices of the grand canyon separating pessimistic and optimistic hedgehogs. On the bright side, they felt that Japan in 1992 still did many things right: high rates of saving, low levels of public spending and taxation, a moderate amount of state intervention, and a pro-business ethos. But they recognized the severity of the crisis. This analysis led to the modal prediction of an unusually protracted recession and Nikkei slump, numerous changes in leadership (probably not, though, triggering the collapse of the LDP in the ten-year range), and a reluctance to impose beneficial reforms that inflicted pain on potent constituencies—a reluctance that could only be overcome if “things get really bad” and a “charismatic leader rises out of the rubble with a mandate to change the old ways of doing business.” Foxes knew that strengths can quickly become weaknesses: the cohesive keiretsu networks that worked well in the booming sixties and seventies were now big obstacles to the restructuring demanded by the nineties. By decade’s end, pessimistic foxes looked pretty prescient.37
Nigeria (1992). Everyone agreed that Nigeria’s problems were severe and traceable to ethnic and religious conflict, bad leadership, and institutionalized thievery on a breathtaking scale. Opinion ran between those anticipating full descent into Hobbesian hell and those expecting continued repression, corruption, and factionalism in the ruling oligarchy.
The most pessimistic hedgehogs believed that Nigeria had been doomed from the start. One expert dismissed Nigeria as being “nothing more than a geographical expression” that, like most nations constructed by colonial powers in the nineteenth century, has “boundaries ridiculously mismatched with the languages and religions of the people who live there.” He felt it a minor miracle that the country survived its brush with death during the war of Biafran secession: “The Ibos from the east could have won if two groups that do not get along—the Yorubans from the west and the Hausa from the north—had not joined forces.” Other pessimists identified more proximal causes, including the influx of $200 billion of oil money into Nigeria between 1972 and 1992: “This was a mixed blessing. Nigeria was a new nation struggling to leapfrog from feudal fiefdoms to parliamentary democracy. Is it surprising that politicians used public moneys to feather their private nests? The top job meant you and your buddies had hit the jackpot.” Another commentator added: “It did not even feel wrong to military and civilian elites. Just the opposite: Their first duty was to look after their own.” Far from immoral, nepotism was a communal-sharing obligation.38
The optimists could summon only a few feeble counterarguments. Some hoped that the 1992 elections might usher in democracy (a hope quickly dashed). And some hoped that Nigerians have learned from their civil war and other episodes of mass violence to step back from the precipice. These observers added that there has been a lot of internal migration and mixing of groups and that the Nigerian elite now has a strong interest in preserving the country.
Foxes tilted toward the pessimists. They did not expect any transition to democracy soon. More military rule was in Nigeria’s near-term future. But foxes qualified their pessimism and this helped them to avoid false alarming on the apocalyptic scenarios endorsed by some hedgehogs.39 Foxes did not assign zero likelihood to genocidal civil war; they gave it, on average a one in five chance in the ten-year range from 1992, and they thought the likelihood of “something really vicious” would only grow larger the longer the leadership vacuum persisted (“the exasperating unwillingness of elites to rein in the kleptocracy”). Foxes also hedged their bets on the consequences of return to military rule: “It depends on how the coup dice roll.” One fox’s best bet was that the next cohort of generals would overlap a lot with the previous cohort. The lower-probability outcomes were that the new generals would be worse (“greedier and nastier”) or better (“tentative commitment to rule of law”). Again, foxes believed that which future we are funneled into hinges on unpredictable micromediators: the predilections of a small military clique.
HEDGE BETS ON THE RATIONALITY OF LEADERS
Most participants found it unlikely, given the hardscrabble struggle to gain high office, that the upper echelons of leadership would be populated with “idiots.” Their first-order assumption was that high-level decision makers are “smart,” by which they meant adept at using “interactive knowledge” to anticipate the reactions of key players in the domestic and international power games that determine whether posterity labels them successes or failures. Foxes differed from hedgehogs, though, in how quickly they modified this first-order assumption when decision makers behaved unexpectedly “irrationally.” The foxes more promptly did one of two things: (1) scaled down their estimates of rationality and looked for mind-sets blinkering perceptions of reality at the top; or (2) changed their assessments of the two-level-game constraints within which decision makers had to work.40
Persian Gulf War I (1990–1991). Observers familiar with the relative military capabilities of the antagonists, and with local geography and climate, dismissed dire estimates in the fall of 1990 that the land war would last years and claim between twenty thousand and fifty thousand American casualties: “Doves are picking numbers out of thin air to scare Congress and public opinion. They are wrong. This is no Vietnam.” These observers included an even mixture of foxes and hedgehogs and they recognized that, if there were to be war, it would be a quick American win. But hedgehogs who worked from rational actor premises frequently took the argument further: “Saddam is as smart as I am and recognizes that he will hang, and not just metaphorically, if he fails to loosen the alliance noose tightening around his neck.” This analysis led many hedgehog rational actor theorists to the incorrect surmise that Saddam would in the next few months preemptively withdraw from part or all of Kuwait.
Foxes did not dismiss this possibility—they rarely assign zero probabilities—but they gave greater weight to the possibilities either that Saddam had not correctly sized up the military predicament (“He thinks he can bloody up the weak-kneed Americans in the ground war so they will retreat”) or that Saddam had compelling political reasons for refusing to retreat (“Saddam may think it better to be a rooster for a day than a chicken for all eternity. Being a chicken for all eternity is not an option in Ba’ath politics. Chickens get slaughtered”). Foxes also suspected that Saddam might have been outfoxed and that, once the Western alliance had made a massive military investment in the Saudi desert, the alliance would not allow Saddam a face-saving retreat so that he could attack again at a more opportune moment (“when there is a Dukakis Democrat in the White House,” one conservative moaned). The net result was that foxes assigned higher probabilities to the combination of war and Iraqi rout than did hawkish hedgehogs who feared peace because they thought the Iraqis could foresee they would be routed, or than did dovish hedgehogs, who feared war because they exaggerated its costs.41
Macroeconomic Policies in Latin America (1988–1992). The intellectual agility of foxes was also apparent going in the opposite direction: when the prevailing expectation was not of rationality but inertia, that elites would keep on repeating the same old “mistakes” either because they just �
��didn’t get it” or were locked into suboptimal policies by political constraints. Latin Americanist foxes did not disagree with their hedgehog colleagues that there would be sharp resistance in Brazil, Argentina, and Mexico to long-overdue reform. They did though sense a palpable fear among elites in those countries about “missing the bus.” The conspicuous success of the Chilean economy rankled local elites, and so did the view of international financial institutions that the locals were either incorrigibly corrupt or “dependencia dunces.” The failure of socialist economics, and of Cuban-style caudillo worship, had left leading leftists so dispirited that some had begun embracing Friedmanite policy nostrums. Foxes did not pretend that imposing fiscal and monetary discipline would be easy, or that backsliding would not be common, but they were better positioned to expect the wave of pro-market policy change that swept through the region and to anticipate the improvements in debt-to-GDP ratios, GDP growth, unemployment, and inflation through much of the 1990s.
Of course, the foxes’ predictions that key countries would finally start listening to the IMF and World Bank could be—and indeed were—reached by other paths of reasoning. Boomster hedgehogs embraced globalization arguments with characteristically greater enthusiasm than most foxes. They saw inexorable trends toward economic interdependence that would encroach on national sovereignty and limit the freedom of decision makers to pursue “dumb policies that produce short-term highs but impoverish people in the long term.” This reasoning led them to much the same conclusion as the foxes about Argentina, Brazil, and Mexico. The difference was that the boomster hedgehogs drew more sweeping conclusions, making similar predictions for the sophisticated economies of Canada and Scandinavia as well as for the emerging economies of eastern Europe, the Middle East, South Asia, and sub-Saharan Africa. Foxes saw some truth in the globalization arguments but were more alert than the boomster hedgehogs to (a) the danger of egalitarian backlash and the opportunities that rapid economic change creates for demagogues to stir up old antipathies and inspire mayhem; (b) the power of entrenched interests—be they French or Japanese farmers or American truckers or steel manufacturers—to delay and sometimes reverse cross-border economic integration; (c) the destabilizing effects that unrestricted flows of capital can have on developing countries with limited currency reserves and weak regulatory institutions.42 Many foxes acknowledged uncertainty about which causal forces would prevail, and this cushioned them for setbacks in Mexico in the mid-1990s and Argentina in 2002.43
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