AUKUS and the Digger Wasp: Understanding Irreversibility Through the Sunk Cost Fallacy

Abstract

ABSTRACT The article draws on the concept of the “sunk cost fallacy” to understand how the state of irreversibility can occur in the context of large-scale, intergenerational military projects. Nuclear weapons are one example of irreversible military projects but there are others in the military domain that are susceptible to powerful vested interests, and where costs can spiral and be subject to the sunk cost fallacy. Nuclear-powered submarine building is the most complex military project that a state can undertake. Accordingly, the article analyses irreversibility through the case study of AUKUS, Australia’s second attempt to create a successor fleet to its retiring Collins-class and prevent a naval capabilities gap. In the AUKUS context, the anticipated state of irreversibility stems from a combination of factors, especially powerful bureaucratic forces being unleashed as Australia develops a nuclear industry from scratch and its prior failure at submarine building – with the imperative to make the shipbuilding a success at almost whatever cost. The article is also concerned with understanding why irreversibility can arise. Taking the analogy of the digger wasp from evolutionary biology, the article observes that for military projects spanning decades, decision-makers lack the full information to make cost-efficient evaluations. Although the sunk cost fallacy may lead to irreversible pathways, the outcome might not be as flawed as it first might appear. Ultimately there is a cost restraint on decisions taken for the long term, leading states to commit to complex project as a heuristic to manage future threats that can’t yet be known.