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Missile Defense

Russian military leaders have expressed concern about US plans for a national missile defense system. Will defense technology be limited by possibilities for a strategic imbalance? Is this just SDI all over again?

rshowalter - 05:28pm Mar 23, 2001 EST (#1392 of 1402)
Robert Showalter showalte@macc.wisc.edu

almarts_2001 I think the amount of good will that is latent, close to the surface, wanting to come out, in American and Europe is very great. Many -- and this is perhaps most true of people in the more literary parts of our culture, would LOVE to see a prosperous, happy, vibrant, RUSSIAN Russia - - not an imitation of the US - but a different cuture - doing well, and interfacing with other cultures.

I believe that many people would WANT to see Russia as a success story - and on Russian terms.

Putin is doing some of the right things -- reports of his achievements at the European Summit look very professional and very good -- and it seems to me that people are looking for "ways of doing business."

There are things that the Russians I've dealt with don't know, that the culture needs to know -

but I believe that the number of individuals, and businessmen, who would WANT a vibrant russia is larger than you may think. And hostility to Russia is narrower than you may think.

rshowalter - 05:29pm Mar 23, 2001 EST (#1393 of 1402)
Robert Showalter showalte@macc.wisc.edu

There are things that Russians do BETTER than Americans -- for the money you had to spend, you ran a very impressive space program - especially on the analytical side. Many things in Russia are fine - and have been fine.

But there are kinds of sloppiness that one sometimes sees in Russia that bother Americans -- and it would help if you learned what they are (find ways to ask in such a way that you learn what you need to know, not what you want to hear) that would, if a little changed, greatly shift the business attractiveness, and status, of Russia upwards.

I think leadership in control and elimination of nuclear weapons, and in the establishment of military balances, may be a great public relations and business opportunity for Russia. Putin acts like he may think so, too.

I find myself feeling afraid as I write this -- but trying to be helpful.

rshowalter - 05:30pm Mar 23, 2001 EST (#1394 of 1402)
Robert Showalter showalte@macc.wisc.edu

I'll imagine that you're the great leader that the quality of your thought and "staff work" indicates -- suppose I take a shot, in the next hour, trying to speak of Russia as a "statistical ensemble of businesses -- with expected rates of return that make them unattractive -- and discuss how you might radically increase the attractiveness of your country from a business point of view.

I'll speak of "expected rates of return" -- as in compound rates of interest -- and talk about the key thing -- which is the total RISK DISCOUNT -- make Russia more reliable, and you will RADICALLY shift its marketability upwards.

rshowalter - 05:36pm Mar 23, 2001 EST (#1395 of 1402)
Robert Showalter showalte@macc.wisc.edu

Perhaps this model is simple enough for you to use -and evaluate, punching numbers on a hand held calculator. Sometimes the biggest effects are easiest to see in a simple case, where relations stand out starkly.

Suppose you think of an investment,

where at time 0, you put in a cost, C

and after a time of t expressed in years (which could be a fraction)

you get a Payoff, P , if you win

and the PROBABILITY OF WINNING is a value a, between no chance ( a = 0 ) and certainty ( a = 1 ) so that 0<= a <= 1

It is worth noting, and especially worth noting for Putin, how the value of a matters.

rshowalter - 05:38pm Mar 23, 2001 EST (#1396 of 1402)
Robert Showalter showalte@macc.wisc.edu

Reliability is valuable (and unreliablility is very expensive ) from a gambler's (or investor's) point of view !

rshowalter - 05:41pm Mar 23, 2001 EST (#1397 of 1402)
Robert Showalter showalte@macc.wisc.edu

the expected rate of return, r , for this lump model is

r = [ln( aP/c)]/t

In words, the effective compounded rate of return (compound interest) is

the natural logarithm of the risk discounted payoff to cost ratio divided by the time between putting out the C, and getting the payoff P

rshowalter - 05:43pm Mar 23, 2001 EST (#1398 of 1402)
Robert Showalter showalte@macc.wisc.edu

Note:

it isn't the "best case" payoff to cost ratio, P/C

it is the risk discounted payoff to cost ratio (aP)/C

that the investor, if he's a rational gambler, looks at.

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