Bryan Caplan  

The Center Will Hold: I'll Bet on It

Peering through the wrong end ... Money is fungible...
Last weekend, I got into a Twitter argument with a fellow who claims that Europe's immigration problem will "inevitably" lead to civil war:

My reaction, as usual, was to propose a bet.  And as usual, the person claiming "inevitability" refused to offer me favorable odds.  Instead, he asked me to offer him favorable odds!

My bets are often of the form, "You're confident, I'm ignorant, so give me favorable odds and I'll bet you."  In this instance, however, I don't plead ignorance.  I am confident that civil war won't happen in Western Europe for any reason whatsoever.  So here's the bet I'm offering:

You pay me $x today.  If any European country that was not Communist in 1988 has a civil war leading to 10,000 or more fatalities between today and December 31, 2045, I will immediately pay you $7x.  Germany counts, Turkey doesn't.  Any front page story in The New York Times, Washington Post, or Wall St. Journal stating that a literal civil war in one of the specified nations has led to 10,000 or more fatalities in that nation ends the bet in my opponents' favor.  If I die before the bet resolves, the bet ends and my heirs keep the money.

I am willing to accept up to $500 on this wager, committing me to pay up to $3500 if I lose.  Per my current rules, I will bet anyone willing to pre-pay me via Paypal.  If there is any doubt about my reliability, note that (a) I frequently bet, and have never been accused of non-payment, (b) I am a public figure with reputation to lose, (c) I have a stable address, having been a GMU professor for 18 years, (d) I am 44 years old, so am quite likely to survive until 2045.  Multiple betting partners have accepted such terms in the past

You may accept these terms in the comments or via email.  The bet officially begins when I receive payment.

COMMENTS (18 to date)
mico writes:

I agree with Caplan. Third world immigration is more likely to result in Brazilification of Europe and the US than civil war. Democracy is unstable without a clear demos but most paper democracies in the third world countries tgat lack good social cohesion successfully maintain order as under-the-counter oligarchies, and the EU is arguably already that.

Charlie writes:

I was just looking at actuarial tables. I'm not sure how accurate they are, but It looks like there's about a 25-30% chance Bryan will die. In which case, the real odds are more like 5 to 1.

At the 30 year rate of 2.92%, $1 today will be $2.30 in 30 years. So the real odds are even lower than 2.5 to 1.

MicroBalrog writes:

All countries are under-the-counter oligarchies.

Reg Blaine writes:

[Comment removed for supplying false email address. Email the to request restoring this comment and your comment privileges. A valid email address is required to post comments on EconLog and EconTalk.--Econlib Ed.]

_nl writes:

Is Cyprus part of the bet? Wasn't communist in 1988. Would that be a civil war if Turkey pays for half the war?

AS writes:

@Charlie: I noticed same. You also assumed Bryan is as safe as a treasury bond. There should also be some nonzero default risk, pushing the implied interest rate higher and the real odds lower. You also want a zero-coupon 30 year rate. Or a government EE bond returns 3.5% if held for 30 years.

Sam writes:

Edge case: What if Catalonia and/or Scotland declares independence and subsequently falls into civil war? Do they count?

Grant Gould writes:

Alternative edge case: If the EU "ever closer union" proceeds to the point that the NYT would characterize a war between EU countries as a "civil war within the European Union" would that count?

Not that I think it's likely at a 7:1 odds scale, but it's worth nailing down in the prospectus.

Grant Gould writes:

[Comment removed. Please consult our comment policies and check your email for explanation.--Econlib Ed.]

Jeremy Kauffman writes:

Is there a reason Bryan doesn't use a more public platform such as Longbets is backed by Amazon and used by prominent people.

It seems that using a platform like this would:
1) make the bets more credible to participants and third parties
2) allow tracking of performance and standing bets
3) increase the visibility of bets

Dangerman writes:

"literal civil war"

Clarification requested: must the conflict be acknowledged to be a "civil war"? By those newspapers or other some such group of "reasonable" people? What about "an armed internal conflict between two or more demographic groups within a single country" that people fail to agree constitutes a "civil war"... but nonetheless meets the death threshold?

I.e. is Iraq currently in the middle of a "civil war"? Syria?

John hare writes:

My problem with the bet is that a dollar well invested today is worth far more than seven dollars in thirty years. IOW, Brian could easily profit even when losing the bet. Other peoples money.

lib-boy writes:

I agree with John. Currency should not be used for bets this long-term which need to be held in escrow. Perhaps bet shares of index funds or ETFs instead?

Mark Brophy writes:

I don't see how Caplan can lose this bet considering that the dollar in 2045 will be worth less than 5% of its current value.

Ahmed writes:

A civil war can not happen because it requires two sides. You can't have a civil war with just one side.

Take the example of Germany. It has a fertility rate of 1.3, well below the replacement fertility rate of 2.1. That means they're roughly halving their population every
generation. The immigrants coming in have higher fertility rates which means their percentage of the population will be increasing. When the time comes, the Germans
will just peacefully surrender. See, no civil war.

The same is true for America. The US is slowly becoming a nation of blacks and Hispanics.

White people are committing demographic suicide. As they say, demography is destiny.

Lorenzo from Oz writes:

I completely agree that civil war(s) are hardly likely. This is not to say that the EU is not in some trouble; if corrective mechanisms do not kick in, it is on something of a downward spiral due to its defective political bargaining arrangements.

Yaakov writes:

I yesterday explained to my wife why I do not see trouble for Europe due to large immigration. The reason is that most immigrants want to adopt the European culture and if and when a quarrel breaks out, most immigrants will be on the side of the Europeans, not on the side of the immigrants. I believe that is the case with every minority in America, and I believe it is the case of the Muslims in Europe. They simply will assimilate. There always is a minority which keeps its culture, but they are a minority of the immigrants.

I brought the example of the immigration from the USSR to Israel in the 1990s. Over a million people came to a country including less than 5 million Jews. They are very proud of their Russian culture, but a large percentage of their children can barely speak Russian. Their grandchildern will mostly not even understand the language. The values and culture of their children are a mixture of Russian and Israeli traditions, with a dominance to Israeli culture. Their children assume or are given Israeli names. Their birth rates are moving up to Israeli standards. Some do live in dominantly Russian immigrant neighborhoods, which may postpone assimilation by another generation, but they are clearly a minority.

RPLong writes:

I think the invocation of the term "balkanization" is odd. Balkanization happened originally because imperialist forces carved up traditional nation-states in ways that didn't jibe with the natural migration and interaction of the citizens of those locations, after which strict anti-immigration policies prevented or greatly reduced further migration.

One would expect immigration to produce the exact opposite of balkanization, wouldn't one?

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