Economics, Falsifiable, Politics

Franchise Economics: Why Tim Hortons Has Become A Flashpoint In The Minimum Wage Fight

Since the minimum wage increase took effect on January 1st, Tim Hortons has been in the news. Many local franchisees have been clawing back benefits, removing paid breaks, or otherwise taking measures to reduce the costs associated with an increased minimum wage.

TVO just put out a piece about this ongoing saga by the Christian socialist Michael Coren. It loudly declares that “Tim Hortons doesn’t deserve your sympathy“. Unfortunately, Mr. Coren is incorrect. Everyone involved here (Tim Hortons the corporation, Tim Hortons franchisees, and Tim Hortons workers) is caught between a rock and a hard place. They all deserve your sympathy.

This Tim Hortons could be literally anywhere in suburban or rural Canada. Image Credit: Marek Ślusarczyk via Wikipedia Commons

It is a truism that a minimum wage increase must result in either declining profits, cuts to other costs, or rising prices. While supporters of the minimum wage increase would love to see it all come out of profits, that isn’t reasonable.

Basic economics tell us that as we approach a perfect market, profits should fall to zero. The key assumptions underpinning this are global perfect information (so no one can have any innovations that allow them to do better than anyone else) and zero start-up costs (so anyone can enter any market at any time). Obviously, these assumptions aren’t true in reality, but when it comes to fast food, they’re fairly close to true.

It is relatively cheap to start a fast-food restaurant (compared to say opening a factory). The start-up costs for a McDonalds, KFC, or Wendy’s are $1,000,000 to $2.3 million, while a Subway costs about $100,000 to $250,000 to start. This means that whenever someone sees fast-food restaurants making large profits in an area, they can open their own and take a fraction of the business, driving everyone’s profits down.

They’re probably driven down much lower than you think. If you had to guess, what would you say the profit margins for a fast-food restaurant are? If you’re anything like people in this study, you probably think something like 35%. The actual answer is 6% [1].

In addition to telling me that the average fast food restaurant has a 6% profit margin, that link helpfully told me that 29% of operating expenses in a fast-food restaurant come from labour costs. Raising those labour costs by 20% by increasing wages 20% increases total costs by 6% [2]. The minimum wage isn’t making fast-food restaurant owners make do with a little less in the way of profits. It’s entirely wiping out profits.

Now maybe your response to that is “well my heart doesn’t really bleed for that big multinational losing its profits”. But that’s not how Tim Hortons works. Tim Hortons, like almost all fast-food restaurants is a franchise. Tim Hortons the corporation makes money by collecting fees and providing services to Tim Hortons the restaurants, which are owned by the mythical small business owners™ that everyone (even the proponents of the minimum wage increase) claim to care so much about.

Most of these owners aren’t scions of wealthy families, but are instead ordinary members of their communities who saw opening a Tim Hortons as an investment, a vocation, or as a way to give back. They need to eat as much as their workers.

Faced with rising labour costs and no real profit buffer to absorb them, these owners can only cut costs or raise prices.

Except they can’t raise prices.

That’s the rub of a franchise system. The corporate office wants everything to be the exact same at every store. They set prices and every store must follow them. But there’s divergent incentives here. Tim Hortons the corporation makes a profit by selling supplies to its franchises; critically, they make a profit on supplies whether those franchisees turn a profit or not. They really don’t want to raise prices, because raising prices will hurt their bottom line.

It’s well known that (in general) the more expensive something is, the less people want it. Raising prices will hurt the sales volume of Tim Hortons franchises, which will decrease the profits at corporate Tim Hortons. The minimum wage hike affects Tim Hortons the corporation very little. They might see slightly increased shipping costs, but their costs are far less dependent on Canadian minimum wage labour. Honestly, the minimum wage increase probably is a net good for Tim Hortons the corporation. More money in people’s pockets means more money spent on fast-food.

Tim Hortons the corporation probably won’t say it, because they don’t want to antagonize their franchisees, but this minimum wage hike is great for them.

So, Tim Hortons franchisees have to cut costs or run charities. Given that they are running restaurants and not charities, we can probably assume that they’re going to cut costs. Why does it have to be labour costs that get cut? Can’t they just get their supplies for cheaper?

Here the franchise system bites them again. If they were independent restaurateurs, they might be able to source cheaper ingredients, reduce the ply of the toilet paper in their bathrooms, etc. and get their profits back this way.

But they’re franchisees. Tim Hortons the corporation has a big list of everything you need to run a Tim Hortons and you are only allowed to buy it from them. They get to set the prices however they want. And what they want is to keep them steady.

The only cost that Tim Hortons the corporation doesn’t control is labour costs. So, this is what franchisees have to cut.

There are two ways to decrease your labour costs. You can “increase productivity”, or you can cut wages and benefits. “Increase productivity” is the clinical and uninformative way of saying “fire 20% of your workers and verbally abuse the others until they work faster” or “fire 20% of your workers and replace them with machines”. While increased productivity is generally desirable from an economics point of view, it is often more ambiguous from a moral point of view.

Given that the minimum wage was just raised and it is illegal to pay any less than it, Tim Hortons franchisees cannot cut wages. So, if they’re against firing their employees and want to keep making literally any money, they have to cut benefits.

This might make it seem like corporate Tim Hortons is the bad guy here. They aren’t. The executives at Tim Hortons labour under what is called a fiduciary duty. They have a legal obligation to protect shareholder interests from harm and to act for the good of the corporation, not their own private good or for their private moral beliefs. They are responding to the minimum wage hike the way the government has told them to respond [3].

Minimum wage jobs suck. For all that economists claim there is no moral judgement implied in a wage, that it merely shows the intersection of the amount of supply of a certain type of labour and the demand for that labour, it can be hard to believe that there is no moral dimension to this when people making one wage struggle to make ends meet, while those earning another can buy fancy cars they don’t even need.

It is popular to blame business owners and capitalists for the wages their workers make and to say that it shows how little they value their workers. I don’t think that’s merited here. Corporate Tim Hortons has crunched the numbers and decided that if they raise prices, fewer people will buy coffee, their profits will decrease, and they might be personally liable for breach of fiduciary duty. In the face of rising prices, franchisees try and do whatever they can to stay afloat. We can say that caring about profits more than the wages their workers make shows immense selfishness on the part of these franchisees, but it’s little different than the banal selfishness anyone shows when they care more about making money for themselves than making money and giving it away – or the selfishness we show when we want our coffee to be cheaper than it can be when made by someone earning a wage that can comfortably support a family.


[1] As long as there are other available investments approximately as risky as opening a fast-food restaurant that return at least 6%, profits shouldn’t drop any lower than that. In this way, inefficiencies in other sectors could stop fast food restaurants from behaving like they were in a perfectly free market even if they were. ^

[2] This calculation is flawed, in that there are probably other costs making up total labour costs (like benefits) beyond simple wage income. On the other hand, it isn’t just wages that are going up. Other increased costs probably balance out any inaccuracies, making the conclusions essentially correct. This is to say nothing for corporate taxes, which further reduce profits. ^

[3] We can’t blame fiduciary duty, because fiduciary duty is how investing at all can happen. You might not like investing, but without investing, saving for retirement or having a national pension plan is impossible. If your response to this is to say “well let’s just tear down capitalism and start over”, I’d like to remind you that people tried that and it led to a) famine, b) gulags, c) death squads, d) more famine, and e) persistent shortages of every consumer good imaginable, including food ^


2018 Predictions

Inspired by Slate Star Codex, this is my second year of making predictions (see also: my previous predictions, their scores, and my recent LessWrong post about these predictions).

Before I jump into the predictions, I want to mention that I’ve created templates so that anyone who wants to can also take a stab at it; the templates focus on international events and come in two versions:

  • Long (which assumes you read global news a lot)
  • Short (which is less demanding)

With both these sheets, the idea is to pick a limited number of probabilities (I recommend 51%, 60%, 70%, 80%, and 90%) and assign one to each item that you have an opinion on. At the end of the year, you count the number of correct items in each probability bin and use that to see how close you were to ideal. This gives you an answer to the important question: “when I say something is 80% likely to happen, how likely, really, is it to happen?”

You can also make your own (or use the set of questions Slate Star Codex normally uses). If you do make your own, please link your post (and maybe also your template?) in the comments or post it to the front page. It’s my hope that this post can serve as a convenient place for the LW community to look at the predictions of everyone who wants to participate in this experiment!

With that out of the way, here’s my guesses for the next year.


  1. Liberals remain ahead in the CBC Poll Tracker seat projection – 70%
  2. Trudeau has a higher net favorability rating than Andrew Scheer according to the CBC Leader Meter on January 1, 2019 – 80%
  3. Marijuana is legalized in time for Canada Day – 60%
  4. Marijuana is legalized in 2018 – 90%
  5. At least one court finds the assisted dying bill isn’t in line with Carter v Canada – 70%
  6. Ontario PC party wins the election – 60%
  7. The Ontario election results in a minority government – 80%
  8. The Quebec election results in a minority government – 80%
  9. No BC snap election in 2018 – 90%
  10. No terrorist attack in Canada that kills > 10 Canadians in 2018 – 90%
  11. More Canadian opioid poisoning deaths in 2018 than in 2017 – 60%
  12. Canada does better at the 2018 Winter Olympics (in both gold medals and total medals) than in 2014 – 90%
  13. Canada does not win a gold medal in men’s hockey at the 2018 Olympics – 70%
  14. Canada does win a gold medal in women’s hockey at the 2018 Olympics – 51%


  1. Trump announces that the US is pulling out of NAFTA and begins the process of putting the US withdrawal into motion – 51%
  2.  Less than 100km of concrete wall on the border with Mexico will be constructed – 90%
  3. No registry of Muslims created – 90%
  4. Congress doesn’t take action to extend DACA – 80%
  5. No department of the Federal Government is eliminated – 90%
  6. There isn’t a government shutdown before the midterm elections – 60%
  7. Democrats take back the house in the 2018 midterm elections – 80%
  8. Democrats take back the senate in the 2018 midterm elections – 60%
  9. Mueller’s investigation finishes in 2018 – 60%
  10. Impeachment proceedings aimed at Trump are not started in 2018 – 80%
  11. Trump is still president at the end of 2018 – 90%
  12. No terrorist attack in America that kills > 10 Americans – 70%
  13. No terrorist attack in America that kills > 100 Americans – 90%
  14. Susan Collins doesn’t get the Obamacare stabilization measures she was promised – 70%
  15. More US opioid poisoning deaths in 2018 than in 2017 – 80%

South America

  1. FARC peace deal remains in place on January 1, 2019 – 80%
  2. The black market exchange rate for Venezuelan Bolivars is above 110,000 to the US dollar on January 1, 2019 (as measured by DolarToday) – 80%
  3. Inflation in Venezuela is above 100% for the year of 2018 (as measured by DolarToday) – 90%
  4. United Socialist party retains control of the Venezuelan presidency in 2018 – 90%
  5. Protests (and the official response to those protests) result in more than 100 fatalities in Venezuela in 2018 – 60%
  6. Protests (and the official response to those protests) do not result in more than 1000 fatalities in Venezuela in 2018 – 70%
  7. Major Venezuelan opposition groups do not enter any sort of power sharing agreement with the Venezuelan regime in 2018 – 80%

Middle East

  1. No Israeli politician is indicted by the ICC over settlement activity in 2018 – 90%
  2. There isn’t an election in Israel in 2018 – 80%
  3. US does not physically relocate its embassy to Jerusalem in 2018 – 90%
  4. No Palestinian led Intifada in Israel that results in the deaths of >1000 combined attackers, security forces, and civilians (this is a conflict characterized by suicide bombing and police responses) – 70%
  5. No Israeli led operation in the West Bank or Gaza that results in the deaths of >1000 combined soldiers, civilians, and militants (this is a conflict characterized by rocket fire and military strikes) – 70%
  6. Fatah and Hamas do not meaningfully reconcile in 2018 (e.g. Fatah still doesn’t control Gaza by January 1, 2019) – 51%
  7. No significant resurgence in ISIL in 2018 (e.g. it does not gain territory over the next year) – 80%
  8. Fewer casualties in the Syrian Civil War in 2018 than in 2017 – 70%
  9. No power sharing agreement or durable ceasefire (typified by the three months following the agreement each having less than 500 fatalities) in Syria in 2018 – 80%
  10. Bashar Al Assad is still President of Syria on January 1, 2019 – 90%
  11. Protests in Iran do not result in more than 1000 fatalities by the end of 2018 – 70%
  12. Protests in Iran do not result in more than 100 fatalities by the end of 2018 – 51%
  13. Hassan Rouhani is still President of Iran on January 1, 2019 – 90%
  14. No new international sanctions against Iran (does not include adding new organizations or individuals to old categories and requires coordinated participation of at least two countries) – 80%
  15. No new US sanctions against Iran (does not include adding new organizations or individuals to old categories) – 51%
  16. No attack on the Iranian nuclear program by Israel – 90%
  17. Iran does not withdraw from the deal limiting its nuclear program – 90%
  18. Conditional on Iran remaining in the nuclear deal, inspectors find no evidence of violations after the deal began – 90%
  19. Yemen Civil War continues – 60%
  20. Saudi Arabia pulls troops out of Yemen – 51%
  21. Mohammed bin Salman either remains as crown prince of Saudi Arabia, or becomes king (i.e. no coup or succession shake-up) – 80%
  22. Rockets fired from Yemen cause casualties in another country – 51%
  23. No resolution or lifting of embargo in the Qatar crisis – 80%
  24. OPEC production cuts continue through to the end of 2018 – 60%


  1. No power sharing between ZANU-PF and the opposition will happen in Zimbabwe before the elections (if they occur) in 2018 – 80%
  2. Zimbabwe will hold election in 2018 – 70%
  3. No peace deal ends South Sudan fighting – 70%
  4. Libya still has two rival governments on January 1, 2019 – 70%
  5. No protests, riots, or rebellion in Egypt that kills >100 people in a one week period – 80%
  6. No protests, riots, or rebellion in Tunisian kills >50 people in a one week period – 90%
  7. No terrorist attack in Tunisia kills >20 people – 80%
  8. Zuma is not impeached in 2018 – 51%


  1.  Inflation rate in Japan still remains below 1% in 2018 – 70%
  2. Japanese constitutional reform (removing pacifism) does not occur in 2018 – 51%
  3. China will not deploy its military against Taiwan or Hong Kong in 2018 – 90%
  4. North Korea will test a submarine launched ballistic missile in 2018 – 70%
  5. North Korea will not test nuclear weapons or launch any missiles during the 2018 Olympics – 80%
  6. North Korea will test a nuclear weapon in 2018 – 51%
  7. No country will attempt to shoot down a North Korean missile test in 2018 – 80%
  8. If there is an attempt, it will succeed – 51%
  9. North Korea tests a missile that is judged by experts at 38 North as likely able to carry a plausible North Korean nuclear weapon to the United States – 60%
  10. No current member of China’s Politburo Standing Committee visits North Korea in 2018 – 70%
  11. No meeting between Kim Jung-un and Moon Jae-in in 2018 – 90%


  1. No resolution to the crisis in Ukraine – 80%
  2. Russian GDP growth is less than 3% – 80%
  3. No gain of greater than 20% in the value of the ruble vs. the dollar – 70%
  4. Sanctions against Russia are not significantly rolled back (e.g. sanctions remain in place against Rosneft, Novate, Gazprombank and Vnesheconombank by all members of the G7 remain in place at the end of 2018) – 90%
  5. Angela Merkel remains chancellor of Germany – 60%
  6. Germany holds another election before a government can be formed – 51%
  7. No date set for another Scottish referendum in 2018 – 80%
  8. Teresa May remains prime minister of the United Kingdom – 70%
  9. The UK does not terminate the process of Brexit in 2018 – 90%
  10. There is no final Brexit withdrawal deal reached in 2019 (Donald Tusk wishes to have one by October) – 51%
  11. No snap election/vote of no-confidence in the UK in 2018 – 80%
  12. Poland’s EU voting rights aren’t suspended – 90%
  13. Poland and Hungary continue to refuse to accept migrant quotas – 90%

Grading my 2017 Predictions

Now is the big reveal. Just how did I do in 2017?


  1. Trudeau ends the year with a lower approval rating than he started – 60%
  2. No bill introduced that changes the electoral system away from first past the post in 2019 – 50%
  3. No referendum scheduled on changing the electoral system away from first past the post before 2019 – 70%
  4. A bill legalizing marijuana is passed by the House of Commons – 90%
  5. The senate doesn’t block attempts to legalize marijuana – 80%
  6. At least one court finds the assisted dying bill isn’t in line with Carter v Canada – 60%
  7. Ontario Liberal Approval rating remains below 30% – 80%
  8. Patrick Brown “unsure” rating remains above 40% – 70%
  9. Kellie Leitch is not the next CPC leader – 80%
  10. Michael Chong is not the next CPC leader – 70%
  11. Maxine Bernier is not the next CPC leader – 90%
  12. No terrorist attack that kills >10 Canadians – 70%
  13. No terrorist attack that kills >100 Canadians – 90%
  14. At least one large technology company (valuation >$10 billion and >1,000 employees) will open a Waterloo office in 2017 – 80%



  1. Trump will veto at least 1 bill passed by the House and Senate – 70%
  2. Changes to NAFTA will not significantly affect Canada (e.g. introduce tariffs, eliminate visas, etc) – 80%
  3. Less than 100km of concrete wall on the border with Mexico will be constructed – 80%
  4. Unemployment rate changes by less than 0.5% in 2017 – 90%
  5. Bay Area housing prices increase in 2017 – 90%
  6. Protests (in America) on Trump’s inauguration day draw at least 1 million people – 80%
  7. Protests (in America) on Trump’s inauguration day draw at least 5 million people – 50%
  8. Protests (in America) on Trump’s inauguration day draw less than 10 million people – 70%
  9. Protests outside of America on Trump’s inauguration day draw at least 1 million people – 60%
  10. Terrorist attack in America that kills at least 10 Americans – 70%
  11. No terrorist attack in America that kills at least 100 Americans – 70%
  12. No registry of Muslims created in America – 90%
  13. New Supreme Court Justice is named to the USSC – 90%
  14. No repeal of any of: the individual mandate, the prohibition on denying coverage for pre-existing conditions, children remaining on their parents insurance plans until they are 25 – 70%
  15. gov is taken offline or otherwise rendered inoperative by the new administration – 80%
  16. No Federal Department is eliminated – 80%

South America

  1. No setback to the FARC peace deal significant enough to cause >1000 rebels to rearm – 70%
  2. On the black market, the exchange rate for Venezuelan Bolivars to US Dollars remains above 3000 bolivars per dollar. (As measured by DolarToday) – 80%
  3. Inflation in Venezuela for 2017 is higher than 100% (As measured by DolarToday) – 90%
  4. United Socialist party retains control of the Venezuelan presidency – 70%
  5. No uprising in Venezuela leading to >1000 combined civilian and soldier deaths – 70%

Middle East

  1. The “Regulation” Bill, legalizing many illegal settlements, is passed in Israel – 60%
  2. No Israeli politician is indicted by the ICC over settlement activity in 2017 – 80%
  3. The US moves its embassy to Jerusalem – 50%
  4. OPEC agreement fails (as evidenced by Saudi Arabia increasing oil production to >10.058 million BPD) – 50%
  5. Iraq takes back Mosul – 90%
  6. Mosul Dam does not fail – 70%
  7. Fewer casualties in Syrian Civil War in 2017 than in 2016 – 60%
  8. No new international sanctions against Iran – 80%
  9. No new US sanctions against Iran – 50%
  10. No attack on the Iranian nuclear program by Israel – 80%
  11. Iran does not withdraw from the deal limiting its nuclear program – 80%
  12. Conditional on Iran remaining in the nuclear deal, inspectors find no evidence of violations after the deal began – 90%
  13. Yemen Civil War continues – 60%


  1. Power transition in The Gambia requires ECOWAS troops – 50%
  2. Power transition occurs in The Gambia – 70%
  3. No peace deal ends South Sudan fighting – 50%
  4. IS or affiliated groups do not hold more territory in Africa at the end of 2017 than at the beginning – 90%
  5. Libya has a single government by the end of 2017 – 50%
  6. No protests, riots, or rebellion in Egypt that kills >100 people in a one week period – 80%
  7. No protests, riots, or rebellion in Tunisian kills >50 people in a one week period – 90%
  8. At least one terrorist attack kills >50 people in Tunisian – 50%


  1. Inflation rate in Japan remains below 1% in 2017 – 70%
  2. No Japanese snap election in 2017 – 90%
  3. Scandal involving Thailand’s new king makes its way to a major Western Newspaper – 50%
  4. Saenuri Party loses in the 2017 South Korean election – 80%
  5. China will send at least one diplomatic “insult” to the US (e.g. expelling an ambassador or consul or closing on of its embassies or consulates) – 60%
  6. By the end of 2017, none of the young lawmakers associated with the Umbrella Revolution will be in the Hong Kong parliament – 60%
  7. The Hong Kong lawmakers who are appealing their ban from parliament will have their final appeals denied – 80%
  8. China will not deploy its military against either Hong Kong or Taiwan in 2017 – 90%
  9. North Korea detonates a nuclear weapon – 70%
  10. North Korea does not demonstrate a completed weapon system (e.g. miniaturized bomb and ICBM capable of threatening the continental United States) – 90%


  1. No resolution to the crisis in Ukraine – 70%
  2. Crimea remains part of Russia – 90%
  3. Russian GDP growth is less than 2% – 80%
  4. No gain of greater than 15% in the value of the ruble vs the dollar – 60%
  5. Angela Merkel remains Chancellor of Germany – 60%
  6. Marie Le Pen does not become President of France – 70%
  7. Geert Wilders does not become Prime Minister of the Netherlands – 70%
  8. UK invokes Article 50 – 60%
  9. Conditional on the UK invoking article 50, this occurs behind schedule – 70%
  10. Conditional on the UK leaving the EU, Scotland prepares for another referendum – 80%
  11. No snap election called in the UK – 80%
  12. No regional independence movement (e.g. Scotland, Catalan) achieves success in Europe in 2017 – 90%
  13. Sanctions against Russia are not significantly rolled back (e.g. sanctions remain in place against Rosneft, Novate, Gazprombank and Vnesheconombank by all members of the G7 remain in place at the end of 2017) – 60%


  1. I will not break up with anyone I am currently dating – 90%
  2. I will buy a car – 50%
  3. I will still be working at my current job at the end of 2017 – 80%
  4. I will not move to another city in 2017 – 90%
  5. Conditional on remaining in my current city, I will not move to a different apartment in 2017 – 80%
  6. I will read at least 40 books this year – 80%
  7. I will read at least 10 non-fiction books this year – 50%
  8. I will start reading (and read at least 50 pages) of at least 10 books people recommended to me this year – 60%
  9. I will write at least 200,000 words this year – 80%
  10. I will post at least 15 blog posts or short stories – 80%
  11. I will post at least 25 blog posts or short stories – 50%
  12. I will be >15% over or under-confident for at least 2 confidence levels in these predictions (before taking into account this prediction) – 80%


I thought that making my predictions mostly numerical would make them easy to grade. This mostly worked, but there were a few edge cases, judgement calls, and other amusing things that I want to explicitly mention:

  • Throughout my predictions I used the word “remains”. I regret this, because it is ambiguous. I think I intended it to mean “on January 1st, 2018, X remains true”, but there’s an alternative parsing that is “during all of 2017, X will be true”. I feel it’s most accurate to grade these according to my intent. For my 2018 predictions, I will use clearly language.
  • For 8, the two most recent polls I could find were both from November. In one, Patrick Brown had a “don’t know” rating of 50%. In the other, it was 34%. Polls were found by Googling ‘ontario leader popularity’ and ‘ontario leader popularity politics’; November was the last month in which I could find polls, so I only used November polls. I’m averaging these two and considering the prediction successful. The lack of good aggregation of Ontario political information is part of why I would like to create a website tracking the Ontario election this year.
  • While I was correct as to the who wasn’t the next leader of the Conservative party, I definitely got emotionally involved such that I was severely miscalibrated. Bernier came far closer to winning it then Leitch or Chong and both of those two fringe candidates had much lower chances that it felt like they did.
  • WRT 24 and 25, I’m not counting the Las Vegas shooting as a terrorist attack because it lacked a political motive (as far as we currently know). I think I overestimated the risk of terrorist attack because of the availability heuristic (the last two years had seen a higher than normal amount of successful and dangerous terrorist attacks). A proper estimation would have focused more on the base rate.
  • I don’t think Trump’s cancellation of advertising comes anywhere close to fulfilling 29, so I’m marking it as failed.
  • 31 is borderline, with many former FARC fighters “joining criminal gangs or a dissident FARC movement that has about 1,000 fighters nationwide“. Given that this still implies less than 1000 members rearmed to continue the fight as FARC, I think the prediction holds.
  • 38 is also borderline, but ultimately, I think there is a difference between an announcement of intent to move and an actual movement. Since I was going to mark 28 as a success if Trump hadn’t signed the tax bill by now, it’s only fair that I mark 38 as a failure.
  • I was way under-confident in the stability of the Mosul dam (41). Compare my probability with the chance on the Good Judgement Project and you’ll see I really overstated the risk compared to the consensus.
  • WRT to 43 and 44, the US Treasury added new groups to existing designations, but these are neither new sanctions, nor international sanctions
  • For 59, I think this Daily Mail headline counts: “Thailand’s colourful new King brought ‘his mistress AND his former air stewardess wife’ to his father’s lavish cremation ceremony with both marching in bearskin hats“. I think I want to stay away from prediction “scandals” in the future though, because it’s a very fuzzy concept.
  • While North Korea claims to have a complete, miniaturized ICBM, it looks like them actually realizing this with a weapon able to hit the US mainland is about one year away. Therefore 66 is a success.
  • 69 is only provisionally true and needs to be revised when more GDP data is available.
  • I am apparently rubbish at predicting snap elections, given that I got both 77 and 58 wrong, while being highly confident in my wrongness.
  • Out of all of my failed predictions, the one that surprised me the most was the OPEC deal holding. I really thought that it would fall apart.

A complete list of the sources I used when grading all non-personal predictions is available here.


The whole point of having predictions with few allowed probabilities (for me it was 50%, 60%, 70%, 80% and 90%) is that you can then check how accurate these were by pooling your answers. Here’s how I did:

Of my predictions at a 50% confidence level, I got 7 right and 6 wrong (54%).
Of my predictions at a 60% confidence level, I got 9 right and 4 wrong (69%).
Of my predictions at a 70% confidence level, I got 16 right and 4 wrong (80%).
Of my predictions at an 80% confidence level, I got 20 right and 6 wrong (77%).
Of my predictions at a 90% confidence level, I got 17 right and 2 wrong (89%).

If you prefer graphs, here’s the results on a graph. The red line shows what I would get if I was a perfect judge of probability. The blue line is actual me. Whenever the red line is below my results, I was under-confident. Whenever it’s above them, I was overconfident.

I’m pleased that in general (excepting 70% vs. 80%), things I thought were more likely were in fact more likely. I appear to be fairly under-confident at lower probability levels (50% through 70%), and fairly good at higher confidence levels (80% and 90%), although of course this is just one year and some of this could be due to chance and luck.

My meta-calibration was quite poor. I was never more than 10% off from perfect calibration, despite my worries that I would frequently be up to 15% from it.

Falsifiable, Politics, Quick Fix

May CPC Leadership Race Update

A friend asked me what I thought about the candidates in the leadership race for the Conservative Party of Canada. I found I had more to say than was strictly reasonable to post in a Facebook comment. I posted it anyway – because I’m sometimes unreasonable – but I found I also wanted to record my thoughts in a more organized manner that’s easier to link to.

Right now, I think there are a few meaningful ways to split up the candidates. You can split them up based on what block of the party they represent.

The way I see it, you have:

  • Michael Chong representing the wonkish Progressive Conservatives
  • Maxine Bernier and Rick Peterson representing the wonkish libertarians
  • Steven Blaney and Dr. Kellie Leitch with a more nativist message
  • Lisa Raitt, Andrew Scheer, and Erin O’Toole running as unobjectionable compromise candidates
  • Andrew Saxton and Chris Alexander running as clones of Steven Harper
  • Pierre Lemieux and Brad Trost running as social conservatives
  • Deepak Obhrai running against xenophobia

It might be possible to collapse these categories a bit; unobjectionable compromise candidates and Harper clones don’t have that much difference between them, for example. But I think I’m clustering based on salient differences in what the candidates are choosing to highlight, even when their policy positions or voting records are very similar.

I’ve also been clustering based on ability to win the thing. Here I think there are two clear groups: the haves, and the have-nots. In no particular order, the haves are: Chong, Bernier, Leitch, Raitt, Scheer, and O’Toole. The have-nots are everyone else. I’d give 20:1 odds against any of the have-nots winning.

There are a few things I can infer about the haves based on all the emails I’ve been getting from them.

Chong (polling at 4% in the first round) is hoping that he signed up enough people and is enough people’s second/third/nth choice to win. That currently feels pretty unlikely, but we’ll see. I’d bet on Chong at 12:1 odds.

Raitt (5%), O’Toole (11%), and Scheer (22%) are fighting viciously for the post of compromise candidate, with varying degrees of poll and debate success (Raitt has done much better in debates than her polling suggests). Given the bitter divisions in the party, I personally think the race will go to one of these three on the third or fourth ballot, but I’m low confidence here. More emails in the past few days have attacked Scheer, so between that and his poll numbers, he’s the one I think most likely to win. I’d bet on Scheer at 3:1 odds, O’Toole at 10:1 odds, and Raitt at 12:1 odds.

Bernier (31%) is the current front runner, but I personally expect him to have a lot of trouble picking up subsequent round votes, even with O’Leary’s endorsement. I really wish there was more polling of second and third round intentions in this thing. Without those data, I’m going to put Bernier as second most likely to win, with betting odds of 4:1. I would very quickly change my tune if I saw any evidence he had strong support in the latter rounds.

Leitch (8%) has her own very dedicated cadre of um, “very patriotic” (read: virulently xenophobic) supporters. She also has a lot of people who hate her. Is that >50% of the party? I’m not sure. From her last email (where she urged everyone to consider at least ranking her), I think her internal polling is showing that it isn’t. Reading between the lines, I think her campaign thinks she won’t pick up many 2nd or 3rd votes but that she might have staying power into the late rounds. It seems like her strategy is to win on the 7th, 8th, 9th, or even 10th ballot after everyone else is exhausted. For this reason, I’d recommend she be left entirely off the ballots of anyone who joined the party to pick good candidates. I’d even at this point recommend leaving Bernier on the ballot as a last-ditch Leitch stopper. I do think Leitch is suffering from losing all that free air time to O’Leary and from the loss of her campaign manager a few months ago. He seemed to be able to reliably get her in the news in a way that her new campaign manager has been unable to replicate. I’d take Leitch at 10:1 odds.

Given all this I’d order the candidates from most to least likely to win thusly: Scheer, Bernier, O’Toole, Leitch, Chong, Raitt.

I diverge slightly from the polls of first round intentions because:

  • I think Bernier lacks second and third round support in a serious way. I especially expect him to suffer in rural ridings, where I’m given to understand supply management is popular.
  • I have Raitt below Chong because I think she is the weakest member of her bloc. If someone else in her bloc isn’t winning, I think it would signal a serious weakness in the bloc itself, such that she shouldn’t be in a position to be beating anyone.

When it comes to my personal ballot, I plan to rank nine candidates in the following order: Chong, Raitt, O’Toole, Scheer, Obhrai, Bernier, Saxton, Alexander, Peterson. I’m ranking each candidate based on their respect for the environment, their votes on Bill C-279 (protecting gender identity) and the Woodworth Committee (redefining when life starts), any relevant experience they have in politics or adjacent fields, the tone they’ve struck, their overall level of wonkishness, how much policy information they have on their websites, and their level of bilingualism

I’ve sprinkled this post with betting odds. I’m willing to risk up to $100 on bets about have-not candidates winning and $100 on bets about the other candidates. The only requirements I have for betting are that you must have access to Interac or PayPal (for fund transfers) and you must be willing to post publicly that you’re betting with me (preferably including the odds you’d have put on the event we’re betting on). I’ll add details about any takers in the comments of this post.

Falsifiable, Politics, Quick Fix

An Update on a Prediction

Back in February, I predicted that the slew of scandals Trudeau was facing wouldn’t decrease his approval ratings. To put numbers on this, I gave my confidence intervals for Trudeau’s approval ratings in April.

Thanks to the “Leader Meter“, it’s easy for me to check up on how Trudeau is doing. As of right now, the most recent poll has him at 48% approval (this is conveniently the first poll since April 1st, making it useful for the purposes of checking my prediction), while Éric Grenier’s model has him at 50.6% approval.

Both of these are within all three probability intervals I offered. In addition, Trudeau was polling higher in March than he was in February, further evidence that the scandals in February (and the abandonment of electoral reform) haven’t hurt his popularity.

I continue to believe that the erosion of political norms around scandals during Steven Harper’s time in office has played a large role in Trudeau’s enduring popularity.

Falsifiable, Literature, Model, Science

Pump Six and the Perils of Speculative Fiction

I just finished Pump Six, a collection of short stories by Paolo Bacigalupi. A few weeks prior to this, I read Ted Chiang’s short story collection, Stories of Your Life and Others and I couldn’t help but be struck by the contrast between them. Ted Chiang writes stories about different ways the world could work. Paolo Bacigalupi writes stories about different ways the future could happen.

These are two very different sorts of speculation. The first requires extreme attention to detail in order to make the setting plausible, but once you clear that bar, you can get away with anything. Ted Chiang is clearly a master at this. I couldn’t find any inconsistencies to pick at in any of his stories.

When you try to predict the future – especially the near future – you don’t need to make up a world out of whole cloth. Here it’s best to start with plausible near future events and let those give your timeline a momentum, carrying you to where you want to go on a chain of reason. No link has to be perfect, but each link has to be plausible. If any of them leave your readers scratching their heads, then you’ve lost them.

Predicting the future is also vulnerable to the future happening. Predictions are rooted in their age and tend to tell us more about the context in which they were made than about the future.

I think Pump Six is a book where we can clearly see and examine both of these problems.

First, let’s talk about chains of events. The stories The Fluted Girl, The Calorie Man, The Tamarisk Hunter, and Yellow Card Man all hinge on events that probably seem plausible to Bacigalupi, but that feel deeply implausible to me.

The Fluted Girl imagines the revival of feudalism in America. Fiefs govern the inland mountains, while there is a democracy (presumably capitalist) on the coasts. This arrangement felt unstable and unrealistic to me.

Feudal societies tend to have much less economic growth than democracies (see part 2 of Scott’s anti-reactionary FAQ). Democracies also aren’t exactly great at staying calm about atrocities right on their doorsteps. These two facts combined make me wonder why the (Coloradan?) feudal society in The Fluted Girl hasn’t been smashed by its economically (and therefore, inevitably militarily) more powerful neighbours.

In The Tamarisk Hunter, the Colorado River is slowly being covered by a giant concrete straw, a project that has been going on for a while and requires massive amounts of resources. The goal is to protect the now diminished Colorado River from evaporation as it winds its way into a deeply drought-stricken California.

In the face of a bad enough drought, every bit counts. But there are much more cost effective ways to get your drinking water. The Colorado river today has an average discharge of 640m3/s. In a bad drought, this would be lower. Let’s say it’s at something like 200m3/s.

You could get that amount of water from building about 100 desalination plants, which would cost something like $100 billion today (using a recently built plant in California as a baseline). Bridges cost something like $3,000 per m2 (using this admittedly flawed report for guidance), so using bridges to estimate the cost, the “straw” would cost about $300 million per kilometer (using the average width of the Colorado river). Given the relative costs of the two options, it is cheaper to replace the whole river (assuming reduced flow from the drought) with desalination plants than it is to build even 330km (<200 miles) of straw.

A realistic response to a decades long California drought would involve paying farmers not to use water, initiating water conservation measures, and building desalination plants. It wouldn’t look like violent conflict over water rights up and down the whole Colorado River.

In The Calorie Man and Yellow Card Man, bioengineered plagues have ravaged the world and oil production has declined to the point where the main source of energy is once again the sun (via agriculture). Even assuming peak oil will happen (more on that in a minute), there will always be nuclear power. Nuclear power plants currently provide for only ten percent of the world’s energy needs, but there’s absolutely no good reason they couldn’t meet basically all of them (especially if combined with solar, hydro, wind, and if necessary, coal).

With improved uranium enrichment techniques and better energy storage technology, it’s plausible that sustainable energy sources could, if necessary, entirely displace oil, even in the transportation industry.

The only way to get from “we’re out of oil” to “I guess it’s back to agriculture as our main source of energy” is if you forget about (or don’t even consider) nuclear power.

This is why I think the stories in Pump Six tell me a lot more about Bacigalupi than about the future. I can tell that he cares deeply about the planet, is skeptical of modern capitalism, and fearful of the damage industrialization, fossil fuels, and global warming may yet bring.

But the story that drove home his message for me wasn’t any of the “ecotastrophes”, where humans are brought to the brink of destruction by our mistreatment of the planet. It was The People of Sand and Slag that made me stop and wonder. It asks us to consider what we’d lose if we poison the planet while adapting to the damage. Is it okay if beaches are left littered with oil and barbed wire if these no longer pose us any threat?

I wish more of the stories had been like that, instead of infected with the myopia that causes environmentalists to forget about the existence of nuclear power (when they aren’t attacking it) and critics of capitalism to assume that corporations will always do the evil thing, with no regard to the economics of the situation.

Disregard for economics and a changing world intersect when Bacigalupi talks about peak oil. Peak oil was in vogue among environmentalists in the 2000s as oil prices rose and rose, but it was never taken seriously by the oil industry. As per Wikipedia, peak oil (as talked about by environmentalists in the ’00s, not as originally formulated) ignored the effects of price on supply and demand, especially in regard to unconventional oil, like the bitumen in the Albertan Oil Sands.

Price is really important when it comes to supply. Allow me to quote from one of my favourite economics stories. It’s about a pair of Texan brothers who (maybe) tried to corner the global market for silver and in the process made silver so unaffordable that Tiffany’s ran an advertisement denouncing them in the third page of the New York Times. The problems the Texans ran into as silver prices rose are relevant here:

But as the high prices persisted, new silver began to come out of the woodwork.

“In the U.S., people rifled their dresser drawers and sofa cushions to find dimes and quarters with silver content and had them melted down,” says Pirrong, from the University of Houston. “Silver is a classic part of a bride’s trousseau in India, and when prices got high, women sold silver out of their trousseaus.”

Unfortunately for the Hunts, all this new supply had a predictable effect. Rather than close out their contracts, short sellers suddenly found it was easier to get their hands on new supplies of silver and deliver.

“The main factor that has caused corners to fail [throughout history] is that the manipulator has underestimated how much will be delivered to him if he succeeds [at] raising the price to artificial levels”

By the same token, many people underestimated the amount of oil that would come out of the woodwork if oil prices remained high – arguably artificially high, no thanks to OPEC – for a prolonged period. As an aside, it’s also likely that we underestimate the amount of unconventional water that could be found if prices ever seriously spiked, another argument against the world in The Tamarisk Hunter.

This isn’t to say that there won’t be a peak in oil production. The very real danger posed by global warming and the fruits of investments in alternative energy when oil prices were high will slowly wean us off of oil. This formulation of peak oil is much different than the other one. A steady decrease in demand for oil  will be hard on oil producing regions, but it won’t come as a sharp shock to the whole world economic order.

I don’t know how much of this could have been known in 2005, especially to anyone deeply embedded in the environmentalist movement. As an exoneration, that’s wonderful. But this is exactly my point from above. You can try and predict the future, but you can only predict from your flawed vantage point. In retrospect, it is often easier to triangulate the vantage point than to see the imagined future as plausible.

Another example: almost all science fiction before the late 00s drastically underestimated the current prevalence in mobile devices. In series that straddle the divide, you often see mobile devices mentioned much more in the latter books, as authors adjust their visions of the future to take into account what they now know in the present.

Writing is hard and the critic will always have an easier time than the author. I don’t mean to be so hard on Bacigalupi, I really did enjoy Pump Six and it’s caused me to do no end of thinking and discussing since I finished reading it. In this regard, it was an immensely successful book.

Epistemic Status: The math is Falsifiable, the rest is a Model.

Falsifiable, Politics, Science

Nuclear Weapons: 8.0 High Value Anti-Nuclear Activism

Nuclear weapons represent an existential risk. I’ll let 80,000 Hours speak for me for a minute:

A survey of academics at the Global Catastrophic Risk Conference by Oxford University estimated a 1% chance of human extinction from nuclear wars over the 21st Century.

Luke Oman estimates the probability “for the global human population of zero resulting from the 150 Tg of black carbon scenario in our 2007 paper [delving into the effects of a single nuclear exchange] would be in the range of 1 in 10,000 to 1 in 100,000.” This being said, we think this estimate is too low, as it doesn’t account for the potential for weaknesses in their model or the risk of a societal collapse causing a permanent reduction in humanity’s ability to reach its potential (which is nonetheless an existential risk even if people remain).

If you’re interested in reducing the existential risk that nuclear weapons pose, I’ve identified a few areas where you may be able to make a difference.

8.1 Tactical Weapons

Countries have begun to reduce stockpiles of tactical weapons and put those that remain under better centralized control. No one ever wanted a fresh lieutenant in charge of the nuclear weapon that could eventually set off World War III – it just took everyone a while to realize this.

Still, it seems like this has primarily been possible because of the collapse of the Soviet Union. When the USSR seemed poised to overrun Europe, killing the commies was given priority over keeping humanity alive. Increasing regional tensions between Russia and NATO may result in a resurgence of tactical weapons.

Treaties that ban weapons under a certain yield, or require all nuclear warheads to have locks that can only be released by the civilian leadership of a country would be an excellent way to reduce the risk of conventional warfare leading to a nuclear exchange.

8.2 Arms Reduction Treaties

Not all arms reduction treaties are created equal. The Strategic Offensive Reductions Treaty (SORT) expired on the same day it came into full effect and set non-specific limits; while it may have reduced the total number of nuclear weapons deployed, it probably did this by causing the early retirement of already obsolescent systems. In addition, SORT had no verification provisions. We literally have no way of knowing if it actually had an effect.

On the other hand, the New Strategic Arms Reduction Treaty (New START) has a robust verification mechanism, including demonstrations that technology has been fully decommissioned and eighteen inspector visits each year. New START sets specific limits on ICBMs, SLBMs, nuclear armed bombers, and total deployed warheads. It will be in full force for at least three years, but might be extended longer. It comes up for review in 2019, so convincing the US and Russia to renew it will be very important.

8.3 Anti-ballistic missiles

The US ABM system represents a real threat to global peace. If it is demonstrated to be effective, we could see China rapidly increase its nuclear arsenal. If it’s expanded to the East Coast of the US, or Europe, we could see Russia do the same.

If you live in America, pressuring your congressional representative or senator to vote against any measures increasing funding for the ABM system could be very important. You can call it a waste of taxpayer money, demand it not be built in your backyard, etc.

If you live near one of the current ABM sites, or are near one of the sites for potential expansion, you can engage in direct action.

In addition to organizing protests (it should be easy to get people uneasy about nuclear weapons near them), you can attempt to bog down any expansion or new construction in and endless morass of red tape. If a system is being built near you, you should attend any community meeting you can, be as obstinate as possible, and jump on any zoning violation, rushed environmental assessment, or other bureaucratic mistake like a rabid pit bull. This won’t be very effective if new ABM sites are built entirely within existing military bases, but if even a single support strut has to go up for municipal approval, there’s potential to make an impact.

Current ABM sites are Fort Greely in Alaska and Vandenberg Air Force Base, California. Proposed eastern sites are SERE Remote Training Site in Maine, Fort Drum in New York, Camp Ravenna Joint Military Training Center in Ohio, and Fort Custer Training Center in Michigan.

8.4 Donations

Both 80,000 Hours and OpenPhil have done their own preliminary assessment of nuclear weapon risk.

Neither piece offers firm suggestions for the most effective charity and I lack the expertise to do my own evaluation. Both OpenPhil and 80,000 Hours suggest that there may not be much room for more funding, although OpenPhil suggests that effective anti-nuclear advocacy may be underfunded.

For what it’s worth, I’m donating to the Ploughshares Fund. They seem to have the correct focuses, from preserving the Iran deal, to removing tactical weapons from Europe, to opposing new ABM systems. I don’t think they have that much more room for funding, so I’d welcome a more thorough effectiveness evaluation that would allow people concerned with nuclear risk to confidently donate their money.

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Falsifiable, Politics, Science

Nuclear Weapons: 7.0 Strategy

Having covered the practicalities of nuclear physics, nuclear weapon design, and nuclear weapon effects, we may now turn our attention to the strategies that have grown out of these physical realities.

7.1 Tactical and Strategic Weapons

Broadly speaking, there are two kinds of nuclear weapons – tactical and strategic. This post has been focused primarily on strategic nuclear weapons, high yield weapons capable of destroying cities and hardened targets. Tactical nuclear weapons have smaller yields, allowing them to be hypothetically used on a battlefield that contains friendlies.

The line between the two gets somewhat blurred with the highest yield tactical weapons. Is a 5kt bomb tactical or strategic? No one really has a clear answer. These already crystal clear waters get muddied further when you add in “dial-a-yield” weapons, which can yield anywhere from <1kt to ~100kt. On the low end, they’re definitely tactical. But at the high end, they’re clearly strategic.

Most of the treaties that deal with nuclear weapons don’t cover tactical weapons. This is a bit of a problem, because tactical weapons are perhaps the easiest way that a conventional conflict could escalate into a nuclear conflict. It goes like this: my army is losing, so I have a fire-team use a tactical nuke launched from a recoilless rifle on your densest concertation of tanks. The 100t weapon totally destroys the formation, swinging the battle in my favour.

The nuke I used on you, the opposing general, is not a strategic weapon, so I don’t need codes from higher up or another person to agree with my decision.

You are now losing because those tanks occupied a key position. You reply with a 1kt tactical nuke of your own, fired from an 8″ howitzer 20km behind your own lines. It takes out 3,000 of my infantry. Satisfied, you go back to conventional war.

But I’m pissed off, so I dial up one of my short ranged tactical missiles to a 10kt yield. There’s a plume of smoke from the rocket launch, a bright flash, and a crater where your army used to be. I’m satisfied with a job well done, but your side is pretty enraged. So they call in a 50kt strategic nuke on an intermediate range ballistic missile that wipes out my forces and camp.

A few more levels of escalation and the ICBMs and SLBMs begin to fly. Once you believe nuclear war is inevitable, the only thing to do is try for a successful first strike and pray for the best.

7.2 First Strike, Second Strike, Counterforce, Countervalue

A first strike is an attempt to destroy an opponent’s nuclear arsenal before they can launch it at you. SLBMs or on station stealth bombers are the only real way to pull this off. The flight time for ICBMs between probable belligerents is much too long for the missiles to reach targets before those targets have a chance to respond.

Targets include airbases where nuclear bombers are known to be based, the known location of any mobile ICBMs, missile silos, docks where nuclear submarines may be resupplying, command and control systems, and key nuclear weapons decision makers. Separately, any nuclear submarines that have be detected will be attacked by the hunter-killer submarines shadowing them.

In all likely nuclear exchanges between larger nuclear powers (NATO/Russia, NATO/China, China/Russia, China/Pakistan, China/India, India/Pakistan, Pakistan/Israel and neglecting North Korea due to the primitive nature of its nuclear program), this won’t be enough. Some of the nuclear weapons will survive.

Baring a truly unlikely display of self-sacrifice and forgiveness, these remaining weapons will immediately be fired at the aggressor in a second strike – a retaliatory attack.

First strikes are predicted to be mostly counterforce, that is to say, aimed at an enemy’s military forces in general and their nuclear forces in particular. There will be civilian casualties, because there always are, especially with weapons as indiscriminate as nukes, but civilian casualties aren’t the goal of a first strike.

A second strike, on the other hand, would be primarily countervalue, that is to say, aimed at the most valuable targets an enemy possesses. Major cities, knowledge centres, and industrial centres are the primary targets in a countervalue strike. Civilian casualties are kind of the point and consequently will be rather high.

7.3 Mutually Assured Destruction

Nuclear policy has for decades been based on the idea of mutually assured destruction (MAD). Mutually assured destruction requires all nuclear armed powers to be committed to a massive countervalue retaliatory strike against any country which deploys nuclear weapons against them. Furthermore, this threat must be credible – enemy decision makers must believe it is real and can be carried out if necessary.

The goal of the mutually assured destruction doctrine is to prevent nuclear war by making it clear that all nuclear wars will be unwinnable, so that no power believes they can gain anything from them. Wargame succinctly summed up the desired end-state of the MAD doctrine with the famous line “the only winning move is not to play”.

For MAD to ensure stability, two things must be true:

  1. No actor can destroy the entire nuclear arsenal of another in a first strike.
  2. No actor can defend against a second strike well enough that they will escape unscathed.

While the current MAD equilibrium is relatively stable, it has come under threat from both the US and the USSR in the past. The closest we’ve come to nuclear self-annihilation has been those times when MAD had begun to break down.

The Cuban Missile Crisis was ultimately about first strike capability. The US had based ballistic missiles in Italy and Turkey that gave it the easy ability to target the USSR – and Soviet missiles (of which there were only 20 that could hit the continental United States from Soviet territory). With these forward deployed missiles and timely reconnaissance from the U2 spy plane, it had become perhaps possible for the US to wipe out the Soviet Union and face minimal retaliation.

When the Soviets began to build missile sites in Cuba, the problem became mutual. Suddenly each side had first strike capability. If you want to look for the hand of God in human affairs, I would suggest centring your search here. Conditions were riper for a first shot than a Mos Eisley cantina. It’s a genuine miracle that no one launched missiles.

The negotiated resolution to the Cuban Missile Crisis was publically all about Cuba. Kennedy promised to never invade again and Khrushchev promised to remove the missiles. But in secret, Kennedy promised to remove all of the US missiles based in Italy and Turkey. First strike capability was removed and equilibrium restored.

The second threat to MAD came from anti-ballistic missiles (ABMs). By the 1960s, both the US and USSR were working on ABM systems. The Soviets were building a network of ABMs around their capital Moscow, while the Americans were building a similar system around their missile silos in North Dakota.

These systems were imperfect and could be overwhelmed by MIRVs. But both sides were worried about the future; what if their enemy figured out perfect missile defense before they did? Both the US and USSR knew that If one side could gain a critical advantage in missile defense, they would be able to launch a first strike with impunity. The bitter irony was that systems designed to protect against nuclear attacks were making global nuclear war more likely.

This crisis was also defused through diplomacy. Both sides understood the risks and decided they weren’t worth it. The first Strategic Arms Limitation Treaty (SALT I) limited both the USSR and US to two ABM sites. Hot on the heels of this was the Anti-Ballistic Missile Treaty which revised the limit downwards to one site and limited the number of ABMs at each site to 100.

Unfortunately, the US unilaterally withdrew from this treaty in 2002 to begin work on a new missile defense system. If this system ever becomes operational to the point that the US can expect to survive a second strike from Russia or China, nuclear war will become imminent.

7.4 The Nuclear Triad

The delicate balance of MAD is maintained by the nuclear triad: ICBMs, SLMBs, and conventional bombers. Once a nation possesses all three legs of the triad it becomes almost impossible to remove their nuclear capability in a first strike.

Each leg of the triad has a purpose. ICBMs are static, but are relatively cheap and can often be launched quickly. SLBMs are more expensive and slightly harder to launch (they require accurate positioning for targeting) but are very hard to destroy. And conventional bombers have the greatest flexibility in avoiding attack, plus a very long range courtesy of in-air refueling.

These aren’t the only three methods that can round out a triad though. Really, the important thing is having three credible and disparate systems, such that it is impossible to remove your ability to make a countervalue second strike. Space based weapons (forbidden by treaties), air launched missiles, carrier based nuclear bombers, or nuclear torpedoes could all be used in place of one of the “standard” legs of the triad.

Only India, China, the United States, and Russia have confirmed nuclear triad capability. Israel is suspected of having a nuclear triad, but refuses to confirm or deny this assertion (Israel does wink suggestively when asked, which has led basically all experts to assume that they do in fact possess a nuclear triad).

7.5 Current Nuclear Strategy

Every country charts its own course on nuclear weapons. From public statements and acknowledged procurements, it’s possible to get some idea of each country’s strategy, but you have to understand that they really don’t broadcast these things. I mean, they broadcast them, but we shouldn’t take those statements at face value. There are a host of reasons – diplomatic, strategic, domestic, that prevent leaders from being entirely candid with their nuclear plans.

When reading into strategies, I focus on questions like: what are the known capabilities of deployed weapons? How many nuclear weapons can a country deploy? What delivery methods does a country possess? Where are its weapons based? What advances in technology are politicians highlighting in public speeches? Where have they faced technical difficulties? What countries are they friendly with? Unfriendly with?

I would also recommend avoiding the common pitfall of obsessing over the total number of warheads a country possesses. This number is much less important than the count of operational or deployed warheads. In any significant nuclear exchange, it is unlikely that any warheads but those immediately at hand for deployment will be used.

This section represents my best guesses at the current nuclear strategies of various countries. Please treat these as speculation, not as fact.

7.5.1 Russia

Russia wants to keep its status as a major nuclear power, but it needs to do it on a tighter budget than the USSR had. This means a focus on land based ICBMs, no truly stealthy fighters, and limited resources for its SLBM program.

Current sanctions on Russia have disrupted Russian supply chains and applied pressure on Putin to slash military spending – right as he becomes more confrontational with the rest of the world. Russia can’t afford to fall behind in the nuclear arms race. Its second strike capability is the only thing stopping the US from giving it much harsher ultimatums. Significant budget cuts would put this second strike capability under threat. But on the other hand, Russia can only afford its current military budget for so long.

This statement falsified if: real stealth bombers enter service with a sticker price of >$500,000,000 per unit, Russia manages a string of successful SLBM launches in 2017, the international sanction regime against Russia collapses with Trump as US president.

7.5.2 China

China’s nuclear arsenal is less advanced than that of Russia or the USA. MIRV-ready missiles have been rolled out only in the last decade and many of their missiles still lack MIRV capability (but they do incorporate some decoys and countermeasures). In addition, Chinese missiles are kept unfueled and without warheads in place, which drastically increases their second strike response time. They make up for this with a massive network of decoy silos, real silos, and tunnels built into the mountains of Central China. China only has a handful of nuclear missile submarines and its conventional bomber force is fairly obsolete.

China’s nuclear policy is explicitly second strike only. Based on all the facts above and what I know about China, I’m inclined to believe this. Historically, China has never cared much about what happens outside of China (broadly defined, of course). Since China already enjoys massive conventional supremacy over its neighbours, it has no need of nuclear weapons to intimidate them.

This statement falsified if: China renounces no first use, China threatens a non-nuclear state with nuclear attack, China has >10 active ballistic missile submarines by 2020, China develops a new dedicated heavy bomber.

7.5.3 India and Pakistan

Neither of these countries have sprung for forces really capable of mutually assured destruction and only India maintains a full nuclear triad. Instead of adopting MAD, they instead both aim to have forces just big enough to make a nuclear attack by the other not worth the risk.

Since these countries really only need to be able to deter each other (and possibly China), they’re freed from the need to spend to keep up with the US or Russia. Both India and Pakistan lack the ability to launch a truly significant countervalue strike in response to a first strike from the US or Russia. Given how unlikely the US or Russia launching a first strike on India or Pakistan is, this is a sensible approach.

This statement falsified if: Either of these countries test Mt range thermonuclear weapons, either of these countries develops an ICBM capable of targeting the continental United States (range >11,000km), either of these countries increases nuclear funding by >200%.

7.5.4 UK and France

These countries keep nuclear weapons because they’re members of the UN Security Council and it comes with the territory. Neither has a particularly robust nuclear force (the UK only has American made Trident SLBMs, France has indigenous SLBMs and nuclear capable bombers). It’s largely a prestige thing though. Neither country has been particularly enthusiastic about the nuclear rigmarole (and its price tag) since the end of the Cold War.

Nuclear policy in the UK and France is closely tied to the nuclear policy of NATO, although both countries do maintain some ability to conduct nuclear war on their own terms. Neither country has ruled out using nuclear against non-nuclear states in response to attacks with conventional forces and France has specifically mentioned that they would be willing to use nuclear weapons against countries that sponsor terrorism against them.

All this being said, it is unlikely that France or the UK would be the ones to start a global nuclear war.

This statement falsified if: Either the UK or France increases their supply of operational warheads, either the UK or France develops a full nuclear triad.

7.5.5 North Korea

North Korea’s nuclear weapons program is especially difficult to assess. In addition to the normal challenges when trying to understand a classified program, there’s the bluster of Kim Jong-un to sort through. Up until recently, experts thought ICBM technology was beyond North Korea. They were thought to be struggling with the re-entry heat shield, struggling with miniaturization, struggling with the whole endeavour.

Now, people are less sure. Has North Korea gained full ICBM capability? Or is this more bluster and staged photographs? There’s probably a dozen men and women in the Pentagon (and in many other places) who would love to know the answer for sure. My personal guess, based on the evidence (and the bluster) is that North Korea has a missile design that in theory could target the US, but they’ll need a year or three to get it working reliably. I don’t think they’ll pull off a successful test this year, but I won’t be surprised if they pull one off in 2018 or 2019. That also seems to be the view of the Ploughshares Fund, an anti-proliferation non-profit.

Even if North Korea can’t attack the US, there’s still Russia, China, Japan and South Korea at risk from its shorter range missiles. This represents a considerable threat to a large number of people. It’s tempting to laugh off these threats in light of the inflated numbers that North Korea likes to give for the yields of their weapons (e.g. claiming a 6kt detonation was a hydrogen bomb that could wipe out the whole US). You could look at the disconnect as evidence of a fizzle, but personally I see it as evidence that North Korea likes to exaggerate. In September, they tested a bomb with a yield of 10-20kt. Fizzle or not, if delivered to Seoul, it would kill over 100,000 people.

Under Kim Jong-il, the prevailing belief was that the nuclear program was a bargaining chip in order to get free food or other concessions from other countries. Its purpose under Kim Jong-un is less clear. Despite punishing sanctions, Jong-un has maintained and expanded the nuclear weapon and missile programs started by his father. Whether he is willing to trade them in for concessions or wishes to use them in an attempt at unification is unknown.

This statement falsified if: North Korea successfully tests a true ICBM (range >5,500km) with successfully atmospheric re-entry by the end of 2017 and analysts believe it has enough additional payload for a miniaturized bomb.

7.5.6 Israel

Israel’s nuclear weapons remain unacknowledged, because Israel has pledged to not be the country that “introduces” nuclear weapons to the Middle East. Israel’s statement should be given all of the skepticism one would give to Bill Clinton using the word “is”. Israel may intend “introduce” to mean “acknowledge” or “deploy”, but we’re all pretty sure they don’t intend “introduce” to mean what it literally does.

Israel wants to have nuclear weapons as the ultimate hedge against military aggression by its neighbours. In addition, it wants to ensure that none of its neighbours possess them. Given the clear support for genocide that some of its neighbours have expressed, this position is understandable. If it appears likely that one of its regional foes will develop nuclear weapons, Israel is likely to launch a conventional attack to stop their development. If a conventional attack fails, a nuclear one is not out of the question.

Many sources talk about how Israel holds nuclear weapons as a “Samson option” and is prepared to use them to utterly annihilate an enemy if it looks like they are in a position to destroy Israel. This is actually how I’d expect most countries to behave, so I think the obsession with the Samson Option in Western reports on Israel’s nuclear program has more to do with the story it makes than a real difference between, say, France and Israel.

Israel probably possesses a full nuclear triad. Since it does not confirm or deny its nuclear program, there are no publically available official details that would allow us to be sure of this. It does make sense though. Israel has the technical know-how to pull off the tricky parts of a triad, like SLBMs.

In the future, we can expect Israel to continue to hold onto its arsenal and continue to neither confirm nor deny its existence. I don’t think Israel is a particularly likely candidate to touch off a nuclear war, as it is unlikely to use nuclear weapons against another nuclear armed state. That said, Israeli use of nuclear weapons would almost assuredly result in many civilian casualties and is still an eventuality that basically everyone would like to avoid.

This statement falsified if: Israel joins the NPT and allows inspectors into its nuclear facilities, Israel publically acknowledges its nuclear arsenal, Israel does not launch an airstrike against any nuclear program started by another Middle Eastern country.

7.5.7 Iran

Iran does not possess nuclear weapons, but as recently as 14 years ago was probably working on them. Most analysts believe that this work mostly stopped with the US invasion of Iraq. Iran had no particular desire to become (more of) an international pariah for developing nuclear weapons, but couldn’t accept the risk of Iraq developing them without an Iranian counter. Iran remembered the nerve agent attacks that Iraq unleashed (with the assistance of the US) during the Iran-Iraq war and felt that any developments in Iraqi weapons of mass destruction had to matched.

Iran has been prevented from coming clean about its past development of nuclear weapons by the belief (rightly or wrongly) than any admission will result in sanctions or attempts at regime change from Western actors.

Iran does have a well-developed civilian nuclear program. Despite the wailing and gnashing of teeth among hawks, the current nuclear deal should prevent any breakout towards nuclear weapons. The deal includes a robust enforcement and inspection regime that has most global powers convinced that Iran won’t be able to restart nuclear weapons work secretly.

Donald Trump’s talk of reversing this deal is just that: talk. It isn’t a bilateral deal between Iran and the USA, it’s a multilateral deal between Iran, the Permanent members of the UN Security Council, and Germany. The US could unilaterally re-impose sanctions, but there would be a significant diplomatic cost for basically no gain; it took a network of international sanctions to bring Iran to the negotiating table the first time around, so it is doubtful that US sanctions alone would change anything. The Iranian economy isn’t very integrated with the US economy, further diminishing the sting of any unilateral sanctions. Honestly, the US would probably suffer just as much from a fresh round of sanctions as Iran would.

This statement falsified if: Iran renounces the nuclear deal, Iran leaves the NPT, Iran refuses to allow inspectors access to a site they wish to visit, inspections turn up clear evidence of nuclear weapons development done since 2005.

7.5.8 The United States of America

When Vladimir Putin goes to his magic mirror and asks “mirror, mirror on the wall, who’s the greatest nuclear power of all?”, the answer is invariably “the United States”. In every nuclear metric that matters (so, discounting the total number of warheads), the United States reigns supreme. It has the best stealth bombers, the most accurate missiles, and the biggest fleet of nuclear submarines. As the world’s one remaining superpower, the United States is the only country that is able to mount even a half-way decent first strike – although it probably can’t launch a successful first strike against any triad state.

I don’t know what US nuclear policy will look like going forward. If Donald Trump maintains good relations with Putin, then a nuclear exchange with Russia will be (even more) unlikely. I do think a nuclear exchange with China has become slightly more likely as a result of Donald Trump’s election, but I hope the risk is relatively low.

No matter how you cut it, the risk of a nuclear exchange is – and always has been – low. But no one truly knows how low “low” is. Is it 10% over the Trump presidency? 1%? Whatever it is, I wish it was lower.

I also wish Trump was less of a loose cannon. I can’t really make predictions about America’s nuclear policy over the next few years because the information I have is too heavily weighted towards hyperbole and bluster.

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Falsifiable, Politics, Science

Nuclear Weapons: 6.0 Delivery Mechanisms

All the nukes in the world are useless unless you have a way to get them to their targets. Aside from outlandish and potentially suicidal methods like suitcase nukes or nuclear artillery, there are three main ways of doing this: bombers, intercontinental ballistic missiles (ICBMs), and submarine launched ballistic missiles (SLBMs).

6.1 Bombers

The only nuclear weapons ever used in anger were delivered by B-29 bombers, the Enola Gay and the Bockscar. Because the Allies had attained near total air-superiority over Japan at the time of the bombings, it was possible for these bombers to go in without any real escort. They were accompanied only by weather reconnaissance and observation planes.

In a modern nuclear exchange, total air superiority would probably be required for a country to be able to openly deliver a bomb. If a nuclear bombing is attempted with anything less than total superiority, the attacker can expect to have all remaining anti-air defenses thrown at them.

Absent total air superiority, the only reasonable way to deliver a nuclear weapon via bomber is stealth. Conventional bombers can make a play at this by flying below radar, but this is very risky and doesn’t guarantee success. In states of heightened alert, the bomber would have to avoid both radar and settlements where residents might alert the target to the coming attack.

Stealth aircraft can make a better go at delivering bombs, especially when the target is on high alert. All new combat aircraft are billed as having some stealth capabilities, but the only true stealth bomber is the US B-2 Spirit. Its virtually invisible to most means of detection (it shows up about as well on radar as a large bird or a sphere a foot in diameter would) and can carry 18 tonnes of bombs 11,000km (this gives it a range of about 5,000km, neglecting in-air refueling).

The main disadvantage of bombers then, is the difficulty that they all (except the B-2) face in arriving at their target both intact and at the correct altitude to drop a bomb. There are a couple of significant advantages to bombers though.

They’re controlled by people. Really well-trained, smart people who know what they’re doing. Tell a pilot that it’s up to her to prevent a retaliatory strike on her home country and she’s going to be very motivated to carry out her mission. Maybe she’ll come up with a new trick and make it to her target. If she doesn’t, maybe one of her squadron mates will. Send in a dozen bombers and you force your enemy into a problem of resource allocation. They may end up spread too thin to stop them all. And if just one gets through…

Having pilots also makes bombers fairly accurate. The steep fall-off in weapon intensity with distance from the target (as discussed earlier in §5.1) demands a fair amount of accuracy and pilots can be significantly more accurate than some ICBMs.

Bombers are also the delivery method that’s hardest to stop at the source. During periods of heightened alert, countries will always keep nuclear armed bombers in the air. Any sign of a nuclear attack and they’ll be released for bombing runs on their prearranged targets. Unlike ICBs, there is no silo you can take out to stop them.

Additional Reading: B-2 Spirit, Nuclear Bomber, Stealth Aircraft

6.2 ICBMs

Intercontinental ballistic missiles are missiles capable of delivering nuclear warheads at least 5,500km from their launch site. Intercontinental ballistic missiles are distinguished from cruise missiles by their use of rocket engines and their suborbital trajectories. They leave the atmosphere during their boost phase and come back down on top of their target, using a guidance system and fins for limited maneuvering and final targeting once back inside the Earth’s atmosphere.

US and Russian ICBMs use multiple independent targetable re-entry vehicles (MIRVs). A single ICBM can carry many MIRVs, which allow it to simultaneously strike several targets. MIRVs were invented in response to anti-ballistic missiles, nuclear tipped missiles that detonate near incoming enemy missiles, causing them to fizzle or frying their electronics. The advent of MIRVs made missile defense mostly pointless, because it is much easier to build bigger ICBMs with more MIRV capability than it is to expand missile defense systems to deal with more incoming MIRVs.

MIRVs were one of the main factors pushing down bomb yields. The scaling factors we went over earlier mean that smaller weapons do damage much more efficiently than larger ones. It was MIRVs that made the delivery of these smaller weapons economical. Without MIRVs, launching 8 smaller warheads would require launching 8 smaller missiles, which would end up much more expensive than launching one really huge missile. With a MIRV, you get the best of both worlds – one missile, many warheads.

Improvements in US and Russian missile accuracy over the last 50 years have also driven the decrease in the warhead yields commonly fielded by those countries. Early ICBMs were accurate to within about half a kilometer, which necessitated big warheads if you wanted to be sure of annihilating your target (this is especially important when the target is hardened, like your enemy’s nuclear arsenal is liable to be). Modern US and Russian missiles are now accurate to something like 200m, which (using cubic scaling to approximate destruction) allows for the same change of destroying the target with about 1/15 the yield.

China lags behind on ICBM technology, with Chinese missiles only accurate to within 800m of their target. This results in China using much larger warheads (4-5 Mt) on its ICBMs than the 475kt US MIRV capable W88 or the 200-300kt warheads the Russians favour. It is counter-intuitive yet true that routinely using larger warheads is the sign of a less capable nuclear power.

ICBMs are stored on mobile launching units, or in missile silos away from large cities and built into mountains or underground. Both strategies are designed to protect missiles from enemy attack. Keeping ICBMs mobile makes them very hard to target with other missiles – where they are when the missile is launched may not be where they are when it arrives. Add this to the problem of finding the damn things in the first place and you have relatively good protection.

Missile silos were most useful when missile accuracy was much worse than it currently is. Missile silos are supposed to be impervious to everything but a direct hit from another nuclear weapon. Once a difficult task, this is now fairly possible. If nothing else, missile silos are useful because they will divert some enemy attacks away from populated areas. Still, the expense and relative uselessness of nuclear silos mean that no one is clamouring to build more of them. The Russians are pivoting towards mobile ground based launchers, while the USA is focusing its efforts on SLBMs.

ICBMs have several advantages over bombers. Missiles can endure g-forces, altitudes, and heat that would kill humans many times over. Taken together, this lets missiles launch with very rapid acceleration, travel at very high speeds, and use very efficient trajectories; basically they arrive on target much more quickly than a bomber can. They’re also much harder to intercept. Modern ICBMs come with a variety of countermeasures, from dummy MIRVs, to aluminum balloons, all of which make countering them extremely difficult.

The Iron Dome suggests that >90% missile interception might be technically possible, but intercepting ICBMs remains much more difficult than intercepting short range rockets, so don’t expect much progress anytime soon.

One disadvantage of ICBMS are their highly visible launches and re-entries. A successful stealth bombing provides no warning at all and a successful SLBM attack might provide only 2-10 minutes of warning. ICBMs take something like 30 minutes to cover intercontinental distances (say, Russia to the USA, or China to the USA). During this time targets can be evacuated and retaliatory strikes prepared.

Additional Reading: ICBM, MIRV, Minuteman III, Dongfen 5, RS-26, United States National Missile Defense

 6.3 Submarine Launched Ballistic Missiles

At one point, it made sense to have a firm distinction between SLBMs (which had fairly small ranges) and ICBMs. For modern weapon systems, the ranges are effectively the same. Gone are the days where submarines had to sneak right up to the coast to attack their targets. If you were to look at a globe centred on a modern US or Russian ballistic missile submarine, you’d see all the targets it can hit.

Modern nuclear armed submarines are also very stealthy. As long as they remain submerged they cannot be found by satellites. SONAR and thermal imaging remain about the only things that can find them. Active sonar will smoke a sub out pretty quick – at the cost of letting the submarine know it’s been found and giving away the position of the intercepting vessel. Passive SONAR can occasionally find them, but the ocean is big and nuclear submarine captains know a whole bunch of tricks for masking their SONAR signature.

Thermal imaging can find nuclear powered submarines by the wake of warm water they leave behind (warmed after cooling their nuclear reactors), but savvy captains (and all of them are) can minimize their changes of detection by cruising along boundaries between zones of different temperatures. These zones are so irresistible to subs that a French and British submarine managed to collide as they both (probably) followed one. This was obviously pretty embarrassing to both countries, but should stand as a testament to how damn stealthy these things are. Had either captain realized what was going on, he would have changed course.

Submarines powered by nuclear reactors can run for decades without any refueling. The only practical limit on how long a nuclear sub can stay submerged is the food supply. Water is collected from the ocean and air is recycled much as it would be on the ISS.

SLBMs have all the advantages of ICBMs, with the added advantage of stealth. The US has embraced them wholeheartedly. Its SLBMs are more accurate and more heavily MIRVed than its land based missiles; the Ohio class nuclear submarine carries 24 Trident II SLBMs with up to 8 W88 475kt warheads, each with an effective range of 11,000km and an average error less than 90m. The Russians, Chinese, and others have been less enthusiastic with their nuclear subs. Russia in particular has been having a lot of trouble getting new SLBM systems into active use.

This highlights the one real disadvantage of SLMBs. They’re expensive and technologically complicated. Just getting a missile to successfully launch from beneath the ocean is challenging enough. Add in stealth requirements and a nuclear reactor and it’s no wonder that the sea floor is littered with sunken nuclear submarines, primarily of Soviet origin (one unlucky Soviet nuclear sub actually sunk twice).

You could reduce the technical complexity by using a more traditional diesel-electric submarine, but you’d sacrifice much of the submarine’s endurance and ability to stay submerged. Batteries can only power a submarine for a few days (or hours, if it’s moving as fast as it possibly can) and diesel engines will quickly suffocate the crew if run underwater. Add to this the limited amount of diesel any sub can carry and nuclear submarines become the only real way to do long duration submerged deterrence patrols.

Additional Reading: Nuclear subs collide in Atlantic, Submarine launched ballistic missile, Ohio Class Submarine, Trident II, Borey Class Submarine, List of sunken nuclear submarines, Nuclear submarine accidents, Bulava missile troubles

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