In Nuclear Poker, Don't Bet on Trump
Is North Korea's belligerent young leader, Kim Jong-un, bluffing when he says the "last stage" is underway for testing a ballistic missile capable of hitting the U.S.? What about President-elect Donald Trump, when he tweets, "It won't happen"?
As Trump's administration begins, a showdown with North Korea over ICBMs seems all but inevitable. Just yesterday, South Korean media reported possible signs that the North may be preparing a new missile launch. In managing this conflict, few things will be more crucial than understanding the nature of bluffing. Unfortunately, for all his talk of being a good deal maker, Trump is a terrible bluffer -- and his lack of skill is likely to destabilize nuclear politics.
A bluff is an untrue but plausible story. In the mindsport of poker, bluffs work when your opponent believes you have a better hand, so he can't call your bet or raise, conceding you the pot. The savvier player wants to steadily grind away at the stack of his opponent over a large number of small pots, without risking too many of his own chips in any single hand. The weaker player can counter the "small ball" strategy by raising all-in fairly often, forcing all-or-nothing confrontations.
To understand why these dynamics are so crucial in nuclear negotiation, consider the work of John von Neumann, the prodigiously gifted polymath who immigrated to the U.S. from Hungary in 1933 and later contributed to the Manhattan Project. Von Neumann loved poker because its strategy involves guile, probability, luck and budgetary acumen, but is never transparent; it always depends on the counterstrategies deployed by opponents.
Expert players misrepresent the strength of their hands, simulate irrational behavior, and deploy other mind games to confuse their opponents. In a nutshell, they bluff. It was von Neumann's efforts to express bluffs in mathematical terms that helped him develop game theory, which has numerous real-world applications, nuclear strategy foremost among them.
Von Neumann's main collaborator, Oskar Morgenstern, summed up the value of poker logic in 1961: "The Cold War is sometimes compared to a giant chess game. The analogy, however, is quite false, for while chess is a formidable game of almost unbelievable complexity, it lacks salient features of the political and military struggles with which it is compared." As a game of complete information, chess provides no opportunity to bluff, leaving it "far removed from political reality … where the threatening nation has to weigh the cost not only to its enemies, but to itself."
"If chess is the Russian national pastime and poker is ours," he continued, "we ought to be more skillful than they in applying its precepts … With bluffs so much easier to make and threats so much more portentous than any previous time in history, it is essential not only for our own State Department but for the entire world to understand what bluffs and threats mean; when they are appropriate; whether they should be avoided at all cost; in short, what is the sanest way to play this deadly, real-life version of poker."
Trump bluffs almost constantly. He has spent his entire adult life overstating the value of his real estate holdings and branding endeavors, while bragging relentlessly about his wealth, sex life, length off the tee, and on and on. His bluffs during the campaign -- that he had a replacement for Obamacare, a secret plan to defeat Islamic State and so on -- were plainly false to anyone paying attention. To Trump, what was true hardly mattered.
Such tendencies would not serve him well in a poker game. Any player who continually misrepresents the size of his hand would cause sharp opponents to give his bets little credit. They'd simply wait for above-average hands and call him. As Daniel Negreanu, the all-time winningest poker tournament player, put it to me, "Trump's bluffs are very effective against level-one thinkers. His lies are so outlandish that people think they have to be true or he wouldn't have said it. The constant barrage makes him tougher to read. But sharper players would pick him apart."
Kim may not be irrational, but he knows how to seem that he is, which gives him leverage. Kim's contempt for most North Koreans means that he has less to lose by threatening to nuke an American city. The more we know about his pretensions to deity, his labor camps, the food and electricity shortages his policies have prolonged, the easier it is to believe he might sacrifice millions of Koreans in an absurd attempt to save face. Kim isn't threatening to defeat the U.S., a bluff no one would credit; he's trying to prove he could grievously injure it before dying himself, a bluff that must be taken seriously. As Negreanu puts it, Kim is "a scary player. Being unpredictable, capable of any move at any time, makes him hard to prepare for."
In such circumstances, Trump's long history of empty boasts is destabilizing. Kim may calculate that he has renewed leverage to push for concessions from the U.S. He might engage in riskier behavior, such as firing more test missiles or launching cyberattacks. Almost certainly, he'll persist in developing missiles that can reach the U.S., calculating all the while that Trump's Twitter outbursts are simply talk.
That may be true. But what if, for once in his life, Trump means what he says? What if he can't bear to have his bluff called, and really is tempted to launch a preemptive attack if it looks like North Korea poses a real threat to the U.S. mainland?
Both leaders should be aware of what Aaron Brown, author of "The Poker Face of Wall Street," has noted about President John F. Kennedy's famous bluff of Soviet Premier Nikita Khrushchev during the Cuban missile crisis in 1962. The young president got Khrushchev to back down by, among other tactics, putting U.S. bombers on highest alert over a radio frequency he knew the Soviets were tuned into. Yet as Brown points out, it was Khrushchev, by agreeing to remove the missiles from Cuba, "who made a wise fold. He had a strong hand but not an unbeatable one, and he sensed the other guy was going to call everything to the river. Good laydown."
Like most great bluffs, Kennedy's walked a fine line between inspired and insane. Khrushchev's poker move, the great fold that cost him his job, might be the toughest, most humane decision any leader ever made, given that it preserved a cold peace and saved countless millions of lives.
Unfortunately for the world in 2017, it's hard to imagine Kim Jong-un or Donald Trump making a similar laydown.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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