Are You a Bad Person For Betting on the Ukraine War?

The following was written by SSG reader and longtime trader, Aaron Kreider. If you’d like to submit a piece for publication, contact us here.

By Aaron Kreider

With a hot war happening in Ukraine and vibrant prediction markets tracking and forecasting the consequences of life-and-death events on the ground, the question many players are asking is: is betting on war immoral?

I’ll start by assuming that the reader agrees that betting is ethical, and that betting on current events is also ethical. I’m sure there are many people who disagree with both positions – but this article isn’t for them.

War is terrible (or at least generally unethical). So obviously, any financial incentive that would encourage people to promote war shares those ethical issues. However, it’s pretty obvious that betting markets, which are mostly populated by retail traders, are far removed from the moral peril we tend to associate with defense contractors, gun runners, and mercenaries, who have truly perverse incentives in times of conflict.

And that’s the bulk of the argument. Betting on war is just as ethical as other bets. Now I’m trying to understand why people think it might be otherwise.

I think the main reason people view betting on a war as immoral is that people want to blame someone for the war, and they are misfiring at random targets because they feel, legitimately, that they have almost no power to stop Putin. So you have large corporations that have absolutely nothing to do with war, like McDonald’s, Starbucks and Coca-Cola – pulling out of Russia. You have people targeting Russian immigrants and even mistakenly Ukrainian immigrants who have no connection to Putin.

The point is that some people are looking for a way to express their moral outrage at Putin, and have chosen betting markets as a target.

The other problem is that people are extremely hesitant to blame themselves for their role in enabling conflict. They aren’t going to want to reduce their fossil fuel usage or pay more at the gas pump – even though fossil fuel revenues were essential to funding the Russian military (even if Americans buy relatively little Russian fossil fuels – our demand drives up the global market prices which indirectly profits the Russian military).

Nor are Americans going to want to ask hard questions like what if we had accepted Putin and Russia into NATO when they had shown interest in joining?

Should the U.S. have taken a softer stance and not expanded NATO onto Russia’s doorstep? Or done the opposite and brought Ukraine into NATO at top speed?

Should NATO have promised to defend Ukraine? Should we have encouraged Ukraine to keep its nuclear weapons? Should the U.S. have provided massive economic aid to Russia to help them transition from the USSR to a more capitalist economy?

If making money off of war is unethical, then every single U.S. resident is a culprit.

The U.S. is built upon wars against the Native Americans, British, Mexico, the Civil War, and many more. Without war, the U.S. would not exist.

And if we widen the net even further to include any corporate or political entity that has economic upside in war, then a large chunk of the planet is supportive of abhorrent behavior – even if they don’t know it.

For example, there are hundreds of millions of Americans profiting from war through our ally, Saudi Arabia, whose actions in Yemen’s civil war are often inhumane.

U.S. corporations are selling Saudi Arabia weapons and people with pension plans or stocks are invested in those corporations. Other Americans have invested in fossil fuel companies which are scoring record profits due to the impact of the Russian invasion on energy prices. And that’s not to mention the responsibility of anyone who is paying for past and future U.S. wars by investing in government bonds.

One profession you don’t hear as much about, but has massive financial upside in times of war, is journalism.

That’s right, you know you’ve been watching CNN more than usual lately just to see the latest in Ukraine. In this case, there is some public good in journalists and policy analysts receiving extra compensation while they cover war. How else can the public be educated?

And while I don’t think prediction markets are anywhere near to being as useful as news outlets – given our limited financial resources & incentives – traders are doing a decent job of providing meaningful predictions and deserve more respect for being the policy analysts that they are. The recognition of political gamblers as novice policy analysts is especially important if you believe that predicting war might be a public good.

For instance, I think that the Ukrainian government did a great disservice to their people when they discounted the probability of a war – they prioritized their economy (and perhaps staying in power) over the lives of their people. The Ukrainian government could have better prepared their people to engage in mass nonviolent resistance or armed resistance. I also think that people in most NATO countries discounted the probability of war causing NATO countries to fail to act to prevent it. For instance, NATO could have put NATO expansion on hold for 20 years. Or they could have decided to increase military assistance to Ukraine. Or done a better job publicizing their sanctions plan.

I’d guess that 90% of U.S. residents think betting on the Ukrainian war is unethical (this number would be lower if it was a war in Yemen or Africa). So despite them being wrong, if you are betting on war you might want to be very cautious about who you tell. Traders might be on “the right side of history,” but for now, that also means being on the wrong side of “the discourse.”

Follow Aaron Kreider on Twitter @online_activist

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