Decision Making as Output and Bounded Rationality

  The classical economics theories proceed on the assumption of rational agents. Rationality implies the economic agents undertake actions or exercise choices based on the cost-benefit analysis they undertake. The assumption further posits that there exists no information asymmetry and thus the agent is aware of all the costs and benefits associated with the choice he or she has exercised. The behavioral school contested the decision stating the decisions in practice are often irrational. Implied there is a continuous departure from rationality. Rationality in the views of the behavioral school is more an exception to the norm rather a rule. The past posts have discussed the limitations of this view by the behavioral school. Economics has often posited rationality in the context in which the choices are exercised rather than theoretical abstract view of rational action. Rational action in theory seems to be grounded in zero restraint situation yet in practice, there are numerous restra

Should India Do a Israel 1967?

India China tensions at the border continue to build up. Talks are on for possible disengagement but despite the apparent movement towards de-escalation, there is hardly any change on the ground. The site of the clashes in the Galwan Valley was about the Chinese obstinacy in refusing to withdraw behind the agreed points. Yet the moment clashes ended, China seem to be back at PP-14 in the Galwan valley. The tensions are far higher in the Pangong Tso area where the disengagement is around the grey area between Fingers 4-8. The Indians are moving to occupy the heights and the tensions are unlikely to subside. Given the trust deficit that exists between the two countries especially after the Galwan incidents, it is unlikely that India will scale down in response to Chinese possible de-escalation moves. On the contrary, there is hardly any optimism or even expectation that China will back down despite its humiliation in Galwan. There seems to be all the more reason for China to hit back and seek revenge for the same.

 

India’s policy towards China has been reactive. China went and constructed a highway across Aksai Chin in 1954 which India discovered a few years later. India made the information public only in 1959. Nehruvian policy towards China was perplexing to say the least. In fact at times Nehru perhaps believed China was unlikely to attack India thus making him go ahead with his forward policy in NEFA. His forward policy might have been right if only there was planning, strategy and execution behind it rather than being a mere statement of occupation on certain ground on MacMahon line. Chinese reaction was all to be expected but what was worse was the humiliation India endured thanks to the follies of the forward policy.

 

In the later years, whether in Sikkim or Sumdrong Cho or Depsang Plains or Chusul or Dolam, Indian policy is a reaction to Chinese moves. China have made moves to occupy land or heights which over a period become default possession of China. In fact, in legal jargons, China believes in capture through adverse possession. India has already lost sizeable area to this adventure. Even in Dolam while India won a tactical victory, China seemed to achieving a strategic objective. The point with the Indian moves also has to do with the fact that India seems content with tactical victories with little follow up. There was no movement towards permanently basing the Indian army posts or ITBP posts in Dolam post the Chinese withdrawal. There has been little attempt by India to dislodge Chinese posts that come temporarily. In fact, the past agreements seem to tie up Indian hands to use weapons and restrict to man to man combat.

 

India has to shed aside its reactive pretensions. Through the last 70 odd years since independence, India has sought to convey a project of war avoidance. In fact, the intervention in East Pakistan leading to creation of Bangladesh in 1971 too was thrust upon it rather than being a proactive action. If India needs to demonstrate its aspirational credentials for superpower status, it must show its willingness to use hard power. India seems to have imprisoned itself into a status of seeking to convey a peaceful power projection which would never work in reality. India’s current approach must change towards a proactive and pre-emptive attitude. Towards this India needs to look at Israel in 1967.

 

In 1967, Israel was being drawn into a possible conflict with its Arab neighbours. The 1948 war had never cooled down and was followed by Israeli invasion of Egypt in 1956 along with Britain and France. It was stopped by US intervention. Yet the embers continue to burn. By 1967, President Naseer of Egypt had entered into defence agreement with Syria and by May 1967, a similar agreement was signed between Egypt and Jordan. Iraq too remained in the Arab sphere though Saudi Arabia while supporting the Arab world seemed to content itself with non-participation in case of a war.

 

By end May-1967, tensions were rising and seemed a matter of time conflict began in the West Asia. The Arabs were determined to put Israel its place unable to reconcile to its existence. Israel was in two minds on its approach. Yet within itself, after a prolonged debate and discussion, Israel came to a conclusion of pre-emptive strategies. On June 5, 1967, Israel launched a surprise pre-emptive attack on Egypt. The Egyptian government was completely taken aback by the move. In fact the Israeli bombing destroyed virtually the entire Egyptian air force within a matter of hours. In a departure from expected move, Israel attacked the Sinai Peninsula from different vantage points catching Egypt by surprise. Hundreds of Egyptian soldiers were killed and many others taken prisoners. In fact, Israel had to let go numerous prisoners since it lacked the holding capacity. Towards the eastern border, Israel attacked Jordan and captured West Bank and the remainder of Jerusalem. Syria entered the war from the north only to lose Golan Heights. It was just a six-day war but the losses Israel inflicted would continue to haunt Arabs for years. It was one of the most brilliant military performances in history.

 

Israeli prestige increased and spurred the economic growth. The war victory resulted in technology spill overs and transformed agrarian nature of Israeli society into an industrial and technological society. As India seeks to confront China, it needs to look at this example. India needs to pre-empt any Chinese moves and attack China at the point where it least expects so. Casus belli can be invented. In fact both Israel and Egypt claimed to have been attacked by each other. India must inflict a military damage on China. Only a battered China would be in a position where it can back off from its aggressive stance every now and then. India cannot afford to play a defensive game. It would be seen as a sign of weakness whether India desires or not. There is no right or wrong time for the same. The world respects power and those who do not shirk from using power.

 

As India plans its strategy, talks can go in a war of attrition and also to prepare its men and materials. But India must demonstrate its military prowess that will not just send a signal to China but to Pakistan and many other countries. The patience must not be translated into perceived weakness. The time for the same is now.


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