We don’t have to worry when someone is wrong – despite Richard Thaler’s recent Nobel Prize nibbling away at the margins of the point, we know that humans are not systematically biased toward error. So, someone who is wrong is likely to be outweighed by someone who is not in error and we end up, societally, at least approaching the right solution.
The time to panic, though, is when some or all are gripped by delusion — when we have a general belief in something which just isn’t. As Mark Twain said, “It isn’t what you don’t know that’s dangerous, it’s what you’re certain is but ain’t.”
This is where we find ourselves with President Trump sharing a belief with Alternet. Sadly, parts of the Pentagon and even the New York Times are caught in the middle as well. Such a widespread belief in the truth of something which ain’t does not bode well for the future.
What do they believe which likely isn’t so? That there are trillions of dollars worth of minerals in Afghanistan which can pay for something. Perhaps it could pay for the American quasi-occupation of Afghanistan, or the reconstruction that country so desperately needs, or even just serve as a pot of money that squabbling politicians can carve up.
This has been going on a long time – Alternet tells us now that the plan is to rip those resources to pay for the American presence. The New York Times tells us that President Trump thinks it a good idea. Seven years back, the Pentagon was floating the same idea. There’s lithium and copper and iron ore in them thar hills, it’s all worth a fortune, and that can pay for everything.
The problem with all of this is that those minerals are worth nothing. Just bupkis.
Sure, we can go on to have terribly interesting discussions about whether the U.S. should try some sort of East India Company colonization. Or we could be even more retrograde and shovel the money into the U.S. Treasury to pay for the troops. We can even argue that mineral wealth should and does rightly belong to the people who live above it, and thus, it’s none of our damn business how much is in those mountains.
But all such discussions depend on there being some value there. Which there isn’t.
What the various people here have done is calculate the value of the metals which might be there, when they are metals and outside Afghanistan, and then declare that that’s the value of them when they are not metals and are inside Afghanistan. In the mining industry, that’s a great way to go bankrupt, making that assumption. Because it’s really sort of necessary to work out the cost of getting the stuff out of the ground, process it into metal, and then get it out of Afghanistan. None of which anyone has included in their calculations.
To give an example, the North Sea, that bit between Britain, Germany, and Norway, has some $5 trillion of gold in it – there is gold in seawater. It would also take $20 trillion at current technology to extract that gold. The North Sea isn’t worth $5 trillion for the gold; it’s worth negative $15 trillion for the gold.
Sure, there’s some iron ore in Afghanistan. But there are no furnaces in the country capable of using it. The closest are in India, Pakistan, and China – the last being the most likely user. Iron ore is worth, dependent upon the markets at any one time, maybe $50 to $80 a ton, plus the cost of sea transport. Afghanistan does not have any sea transport and cannot have it, given its land-locked borders. It also doesn’t have a railway capable of carrying it – and railways are vastly more expensive transport options.
The value of iron ore in Afghanistan is probably negative – that’s before we even consider mining costs themselves. The copper exists, but to make it into something useful you need electricity, more than the entire country currently has. Sure, everyone’s most excited about lithium these days, but it’s still currently in mountains being trampled by goats rather than in any form anyone will pay for.
There simply isn’t trillions of dollars in mineral value in Afghanistan. For we’ve failed, at this point, to take into account the vast costs of mining and transport. It’s far more likely that the net value of those mountains is zero, possibly even negative – something that’s not going to pay for an occupation, colonization, or a military presence. I don’t mind Alternet getting this wrong, I expect them to, but someone really needs to tell the president.
For those interested, there is a longer, and free, guide to this basic point here. Perhaps someone in the White House or Pentagon would like to read it?
Tim Worstall (@worstall) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is a senior fellow at the Adam Smith Institute.
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