Commentary: An Analogy for Arms Control

CommentaryIlanBellany II f everything is like something else, what is arms control like? If we narrow arms control to the area of bilateral activity usually known as SALT, we can give a quick answer. Arms control is very like what goes on among a handful of producers of near identical commodities when they weary of the risks and costs of actually competing with each other on a ”market” basis and turn instead to a price-fixing or market-sharing arrangement . They will look for an “orderly marketing” arrangement when experience has taught them that no one firm seems likely ever to dominate the market, and that competition is, therefore, a waste of their resources. Once such an arrangement is reached, each party is deterred from breaking it (for instance by cutting prices unilaterally) because it knows the result will be for the others to do the same; its advantage would therefore be short lived. Arms control, for the purposes of this short essay, is an arrangement between the superpowers to avoid the costs of military competition, thereby increasing their pay-off. What keeps the basis of the arrangement (an explicit agreement or merely an understanding) intact is the strong expectation, based upon experience, that an attempt to breach it will be nullified by compensating action on the other side. Arms control is a consequence of the recognition by each superpower of the impressive capacity of the other to come up with an adequate counter to any new weapon that either may dream up. It is also, in a sense, a consequence of there being a high likelihood that a breach of the arrangement by one side will be fairly immediately apparent to the other. Formally, the resemblance between “arms control” and “orderly marketing ” can be expressed in the simple 2 X 2 matrix of the Prisoner’s Dilemma type, and this is demonstrated in the short Appendix to this essay. But the analogy between the two classes of activity can be explored rather more interestingly in an informal manner. That is to say that by plundering from the rather extensive literature on ”imperfect competition” those regularities of behavior that have actually been identified amongst firms involved in ”orderly marketing” arrangements, we can identify “shadow” patterns of Ian Bellany is the Director of the Centre for the Study of International Security and Arms Control, University of Lancaster. International Security, Winter 1981/82 (Vol. 6, No. 3) 0162-2889/82/030177-05$02.50/0 @ 1982 by the President and Fellows of Harvard College and of the Massachusetts Institute of Technology. 177 lnternational Security I 178 behavior that ought, if the analogy is sound, to be found among states involved in arms control of the SALT type. What follows is simply a short listing of some recognized features of imperfect competiton, followed in each case by its arms control parallel. QUALITATIVE VS. QUANTITATIVE COMPETITION Competition between firms ceases first where reaction to competitive moves is easiest. Actual price cutting being easiest to respond to, it is the first thing a cartel will normally rule out, with competition more likely to continue in qualitative areas, such as advertising, where organizing a suitable countermove may be more difficult. Arms control will occur first where reaction to competitive (“arms racing”) moves is easiest. Since increases in the numerical size of existing hardware arsenals are easiest both to identify and to respond to, numerical freezes are the first thing to be agreed. Competition is apt to be more difficult to control in qualititativeareas, such as technological improvements, where organizing a suitable response may be harder. Arms control is assisted, however, by the phenomenon of long lead times, which means the existence of a new weapon in the other camp is often likely to become known and a counter gotten well underway long before the new weapon is actually available for service. The weapons least likely to be controlled are those that involve new technologies but that also have short lead times: these weapons will, for instance, include those that have gone through their development phase, under a different guise, in the civilian sector of the economy. THE STRONGEST PARTY INITIATES The initiative for a successful “orderly...