Ukraine And The Sunk Cost Fallacy

President Trump and his Administration have done more than anyone to try and reach a peace agreement concerning Ukraine. Special U.S. envoy Steve Witkoff said on Sunday that Russian President Putin would agree to allow the U.S. and its allies to offer NATO Article 5-like security protections to Ukraine as part of a larger piece deal involving territorial concessions to Russia. 

 Outlining some of the details about the private discussions, Witkoff also said Russia had agreed to enact a law that it would not "go after any other European countries and violate their sovereignty. And there was plenty more.”   

As for the territorial concessions, "[t]he Russian leader is said to have told the US president that he wants the eastern Donetsk and Luhansk regions, adding he would give up other Ukrainian territories held by his troops in return." 

    As John Daniel Davidson writes at The Federalist, "The Ukraine War Was Always Going To End This Way." 

     This formula — Ukrainian territorial concessions in exchange for security and political independence — was always how the Ukraine war was going to end. The corporate press is pretending to be shocked and scandalized by the mention of an adjustment of Ukraine’s borders, but the outrage is feigned. Given Russia’s strategic imperatives and Ukraine’s indefensible borders, the broad outlines of a peace settlement are exactly what they were in February 2022, before Russia launched its invasion.

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    Hence, Moscow is likely focused entirely on territorial adjustments in the southern and eastern parts of Ukraine, which makes perfect sense to anyone with passing familiarity with Ukraine’s recent history.

    Ukraine’s current borders are a relic of Soviet propaganda, invented by Premier Nikita Khrushchev in 1954 as part of an effort to make the Warsaw Pact look like a diverse coalition of strong states. When the Soviet Union collapsed in 1991, those fictional borders were made “real,” leaving Ukraine with a Soviet nuclear arsenal, Russia’s Black Sea fleet, and control of the ports of Sevastopol and Odessa.

    The situation this created was obviously untenable. Under pressure from the United States, Kiev returned the nuclear arsenal and the Black Sea fleet to Russia, and signed a long-term lease agreement giving Moscow control over the warm-water port at Sevastopol. But it left Ukraine itself with an indefensible territory and millions of Russian inside its borders. As Mario Loyola explained in these pages three weeks before Moscow launched its invasion in February 2022, Ukraine in 1991 wasn’t really a viable state: “It wasn’t at all clear that Ukraine would be strong enough to maintain both political independence and territorial integrity given the weight of vital Russian interests involved.”

    As long as Ukraine stayed in Russia’s orbit, it could control its territory. But, as Loyola writes, “the moment it definitively broke away from Moscow in 2014, it immediately lost control of those areas that were most vital to Russian interests, and nobody with an even minimal sense of Russian and Ukrainian history can pretend to have been taken by surprise.”

This is the obvious and logical conclusion to the war. 

    But there are many interests opposed to this outcome. For instance, in an article published on Saturday at The Conversation, Olena Borodyna argued against any territorial land concessions because it would leave Ukraine vulnerable (but more vulnerable than it is now?):

    For Ukraine, the danger of such a deal is clear. Russia might pause large-scale physical warfare in Ukraine under a deal, but it would almost certainly continue destabilising the country from within.

    Having never been punished for violating past agreements to respect Ukraine’s territorial integrity, such as when it annexed Crimea in 2014, Moscow would have little incentive to honour new ones. The government in Kyiv, and Ukrainian society more broadly, would see any accompanying security guarantees as fragile at best and temporary at worst.

    The result would probably be a deepening of Ukraine’s vulnerabilities. Some Ukrainians might support doubling down on militarisation and investment in defence technologies. Others, losing faith in national security and reconstruction, could disengage or leave the country. Either way, in the absence of national unity, reconstruction would become far more difficult.

She also warns of continued Russian attempts to disrupt European infrastructure, such as attacks on undersea cables, and the risk of destabilizing Europe if Ukrainian continue to flee the country. Moreover, she argues, reconstruction would be more expensive and risky because, she envisions, territorial concessions would make Ukraine politically unstable. 

    Ukrainian President Volodymyr Zelensky has already signaled his opposition, stating that Ukraine won't give up land Russia doesn't already occupy, but also indicating that the Ukrainian constitution does not allow for land concessions. And, according to this article from the Guardian--"Ukrainian mood hardens as MPs insist country should not be forced to surrender."--Ukrainian politicians and the public are expressing opposition to such a plan because it would be acknowledging defeat, being the perfect example of the sunk cost fallacy:

     Sevgil Musaieva, the editor of Ukrainian Pravda, said in a column published on Sunday: “We are being forced to behave as if we have to admit defeat. Not military, but political. Not a surrender of arms, but a surrender of thought.”

    She said this was “the most dangerous form of defeat. Because if we accept it internally then external defeat will only be a matter of time.” In fact, “for the first time in a century, Ukrainians put up a worthy resistance”, she said.

    “We have no right to forget Bucha, Izium, Mariupol. We have no right to forget the torture, the mass graves, the children killed and abducted by Russia,” she said, arguing that “without memory we will lose ourselves”.

    Oleksii Kovzhun, a popular Kyiv-based video blogger, said Putin’s demands were “akin to capitulation” and that “Zelenskyy could not legally hand over Donetsk even if he would want to (and he does not)” because it would have to be subject to a referendum. “Ukrainians will not allow it,” he said.

Of course they can be cavalier about peace because they are not financing the war. The U.S. and Europe are paying for it. As I've noted before, the U.S. could have more than paid for fixing every bridge in the country for the amount of money spent in Ukraine, something of much greater worth to the average American. Trump should make it clear that Ukraine can choose to reject a peace deal, but by doing so it will also be rejecting American assistance. There is no reason that we should be trapped by the sunk cost fallacy.