This article first appeared in Forum, The Edge Malaysia Weekly on October 17, 2022 - October 23, 2022

As summer fades into autumn, the coldest winter is coming, bringing a hot war closer. When Russia’s President Vladimir Putin signed the declaration of annexation of four Eastern Ukrainian territories effective Oct 4, after Russia’s partial mobilisation in September, another red line was crossed in the escalation of war, heading towards the risk of nuclear mutually assured destruction (MAD).

War’s greatest tragedy is the sacrifice of truth to propaganda. Since the invasion began, the intense propaganda from both sides and the cancellation of Russian TV channels have created an information and disinformation fog for all of us. Other than real insiders, very few get an unbiased picture of what is truly going on. Every bit of controlled official news is exaggerated into great wins, with terrible losses by the other side. The rest of the world is not given the chance to vote for peace and reconciliation, like helpless spectators in a deadly game with no neutral referee. No one is keeping the score, but we know that we are all ultimate victims of an escalating nuclear Armageddon that could kill most of us.

Nuclear madness is neither a democratic outcome nor a moral victory for anyone.

What we do know is that the longer the war drags on, the greater the human losses to both Ukraine and Russia, as well as economic and ecological damage to Europe and the global economy. The IMF estimates that Ukraine will suffer a loss of 35% of gross domestic product in 2022, while Russia will decline by 5.5%. In addition, recession is looming, with the UK and Germany expected to see negative growth by next year. Global growth is down, inflation is up, climate action to achieve net zero is being torpedoed and there is no exit strategy in sight.

The current period is eerily like a phoney proxy war. During World War II, there was an eight-month period between the declaration of war on Sept 3, 1939, by the UK and France against Germany, to May 10, 1940, when there was very little actual fighting. Open hostilities broke out after the Germans invaded France in May 1940. It was phoney, because the protagonists were busy preparing for real war, rather than actually fighting. Currently, no Nato troops are actually fighting Russians, but Ukraine, fully supported by Nato in terms of money and arms, is engaged in deadly combat on a daily basis. The US secretary of defense has admitted that the objective is to weaken Russia, without naming Ukraine as the proxy fighter. As the real military power behind Nato is the US, the ultimate decision whether to negotiate or fight on rests with it. The strategic choice for the US is either to negotiate a peace, or escalate until Russia or China blinks. The downside is a risk of nuclear war, if both Russia and China refuse to buckle over Ukraine or Taiwan pressures.

In essence, President Joe Biden is faced with the dilemma of negotiating and looking weak, or escalating the situation to the use of nuclear weapons, in which case even the US is not sure of winning. Which is why we need to think through the process of nuclear madness.

Since using atomic bombs to end World War II, the US has avoided nuclear conflicts for over 70 years, because the Cold War warriors both understood that using nuclear bombs was mutually assured destruction. Cold logic and self-preservation defused the 1962 Cuban missile crisis, when the Soviet Union threatened to deploy missiles in Cuba to counter US missiles being placed in Turkey. Then US president John F Kennedy agreed to a reciprocal withdrawal from Turkey (not disclosed until later), while USSR withdrew its missiles from Cuba. Another Cuban standoff is unfolding in Ukraine.

There are four stages in nuclear escalation. The first is mutually assured deterrent (MAD1), easiest when both sides appreciate the extent of devastation so they are deterred from using them. However, when nuclear bombs proliferate to smaller powers, who have less to lose, the risk-return calculation is asymmetric, because smaller powers can drag big powers into a nuclear escalation for their own interests. Nato members worry about Ukraine joining Nato because they could be dragged into a nuclear shootout that they are not prepared to risk. When Nato members do not understand that risk, we move to the second stage of mutually assured denial (MAD2).

MAD2 is dangerous because players may not have the information to judge, or may deny that they could be wrong, or worst of all, misunderstand the other side’s reasoning and options. By demonising the other side, they deny themselves options to negotiate better outcomes than war. Tensions and distrust then rise to mutually assured delusion (MAD3), when each side deludes itself that the other would not dare to use the weapons. Finally, accidents happen and we get mutually assured destruction (MAD4).

But things get really complicated when the number of nuclear players proliferate. China, France, the UK, India, Pakistan, North Korea and possibly Japan, Iran and Israel also have nuclear bombs or are about to make them. Action by these other players can trigger accidents beyond the control of the big powers.

At the mutual denial and delusion stages, no nuclear power is certain that it can trust the other side not to be the first mover, so it is tempted to go for a first strike. This is a vicious spiral of death by delusions. If you have adults in charge, innocent victims can sleep easier. No challenger will fight if the ruling alpha signals superior power and aura. But when numero uno seems to be willing to take on numero dos or tres challengers at the same time, and its economic strength is no longer unchallenged, then the risk of fighting rises exponentially.

What does not make sense to the rest of the world is that Biden’s advisers seem to be pushing him to cope with a two-front position in Ukraine and Taiwan. When former US National Security Adviser John Bolton says that Russia’s use of the nuclear option is suicide, he forgets that MAD is also suicide for the US. The US is entering into WW3 with WW2 levels of debt. No financial centre, not even New York, can survive a nuclear strike, meaning the dollar or cyber-currency may not be there to fund any further fighting. We would all be blown back to the Stone Age.

There can be no MADness if we all vote for peace and common sense. Everything else is delusional.

Tan Sri Andrew Sheng writes on global issues that affect investors

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