Inaction can be just as costly as making the wrong move

Inaction can be just as costly as making the wrong move

Calculating risk is a complicated task for individuals, businesses and governments. A cost-benefit analysis is crucial when making a significant decision — a good decision-maker considers the potential costs and the potential benefits of taking an action. However, the well-known cost-benefit calculation is incomplete without also considering the potential costs of doing nothing. As author Tim Ferriss has put it: “Humans are very good at considering what might go wrong if we try something new. What we don’t often consider is the atrocious cost of the status quo — not changing anything.”

This is true in many aspects of daily life. For example, individuals might consider the risks associated with quitting a job, but there might also be risks involved in remaining in a job that is unfulfilling, demeaning, dangerous or ill-suited to one’s personal and family life.

The cost of inaction can be significant in business, as well. For example, if potential entrepreneurs never tried to establish a business due to fear of failure or concerns about finances and other issues, then the cost of inaction to them personally and the wider economy could be great. Businesses operating in insecure environments should consider the costs of taking security measures but also the potential costs of not doing so.

The costs of inaction are important in many other areas, such as healthcare. When people choose to avoid preventative medical care, they can become far sicker and face much greater costs later on. Vaccines are another clear case. Vaccines — like all medicines — have some risk but, with most, the risk of action (taking the vaccine) is very low in comparison to the risk of inaction (not taking it).

Governance is another area in which taking the cost of inaction into account is essential. For example, pursuing reforms is always risky, but often the cost of avoiding reforms is far higher in the longer term.

In geopolitics, it is also important for policy-makers to consider the cost of inaction. This is especially true for countries that are particularly powerful globally or regionally. Leaders and citizens of countries often want to believe that choosing not to act is a neutral position but, for countries with extensive influence, choosing inaction still has consequences.

For example, those who opposed or criticized the 2011 coalition air strikes in Libya that helped to overthrow Muammar Qaddafi often failed to recognize the likely costs of inaction. If the international community had allowed Qaddafi to overrun Benghazi, there was a very high risk of a historic massacre. If Qaddafi had crushed the revolution and remained in power, he might have become an unstable and unpredictable leader once again, perhaps supporting international terrorism and presenting a major security risk to Europe, Africa and the Middle East, as well as potentially sparking an even bigger refugee crisis. The risks of the military action against him were clear — and some of the warnings about its consequences proved accurate — but the risks of inaction were also very significant.

The costs of inaction are important in many other areas, such as healthcare. When people choose to avoid preventative medical care, they can become far sicker and face much greater costs later on

Kerry Boyd Anderson

The Syrian war is a tragic example of the risks of inaction in geopolitics. In the first couple of years of the civil war, there were multiple opportunities for the US especially, as well as for other countries, to do more to balance out the odds in favor of the moderate rebels fighting Bashar Assad. Hillary Clinton, who as US Secretary of State argued unsuccessfully for training and arming a selected group of moderate rebels, later wrote: “The risks of both action and inaction were high.” As a debate raged about how much the US should do, senators John McCain, Joe Lieberman and Lindsey Graham presciently wrote in a 2012 op-ed in the Washington Post that “inaction carries even greater risks for the United States — in lives lost, strategic opportunities squandered and values compromised.”

However, President Barack Obama focused on the risks of doing more, particularly of more actively supporting moderate rebels in an effort to make a military victory for Assad impossible and thus force him to negotiate. Obama was right to seriously weigh the risks, including the possibility of American weapons falling into the hands of extremists, but he erred in giving insufficient weight to the risks of inaction. The international community’s inaction was one important factor that contributed to the ability of the Assad regime to kill tens of thousands of people, and allowed for increased Russian and Iranian influence, the rise of Daesh in Syria and a historic refugee crisis.

There is a good argument to be made that the international community’s failure to respond more forcefully to Russia’s 2008 invasion of Georgia and the 2014 invasion and annexation of Crimea are other examples of how inaction had serious consequences, including encouraging Russia to flout international norms. Like the Libyan and Syrian cases, this issue is complicated. The US and Europe have imposed sanctions on Russia and tried to use other diplomatic means to persuade Moscow to change its behavior, but these have not worked. There is a strong argument against more serious forms of military action against Russia; yet, any argument against doing more also needs to take into consideration the consequences of the status quo.

The Libyan, Syrian and Russian examples highlight the complexity of balancing risk in geopolitics. Understanding the costs of inaction does not mean that action is always the right path. There are many examples in which leaders failed to fully consider the costs of action, such as the US-led 2003 invasion of Iraq. Sometimes inaction is the right decision. The point is that considering the risks of inaction along with the potential costs and benefits of action is essential to making well-considered decisions in life, in business, in governance and in geopolitics.

  • Kerry Boyd Anderson is a writer and political risk consultant with more than 14 years’ experience as a professional analyst of international security issues and Middle East political and business risk. Twitter: @KBAresearch
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