Saturday, December 31, 2016

Welcome to the Zero-Sum World, where Winning Trumps Sharing

I first came across game theory when I was in High School.  I liked math, and I liked games.  So when I found a book on game theory lying on a table in the school library, I picked it up and got hooked.  Not that I am anything of an expert.  We reductionists don't much go in for uncompensated expertise.  I just want the kernels, especially the idea of coordinated plus-sum games, i.e., games where everybody can win if the players cooperate.

Plus-sum games are distinguished from "zero-sum" games, in which the pay-offs to winners must be matched by the losses of losers.  The Prisoners' Dilemma is the quintessential coordinated plus-sum game.  It quantifies a simple notion that has been around for as long as there has been civilization, a notion captured by the golden rule, and explicated in grand style by Thomas Hobbes in Chapter XIII of Leviathan.
There Is Alwayes Warre Of Every One Against Every One Hereby it is manifest, that during the time men live without a common Power to keep them all in awe, they are in that condition which is called Warre; and such a warre, as is of every man, against every man. ...

Whatsoever therefore is consequent to a time of Warre, where every man is Enemy to every man; the same is consequent to the time, wherein men live without other security, than what their own strength, and their own invention shall furnish them withall. In such condition, there is no place for Industry; because the fruit thereof is uncertain; and consequently no Culture of the Earth; no Navigation, nor use of the commodities that may be imported by Sea; no commodious Building; no Instruments of moving, and removing such things as require much force; no Knowledge of the face of the Earth; no account of Time; no Arts; no Letters; no Society; and which is worst of all, continuall feare, and danger of violent death; And the life of man, solitary, poore, nasty, brutish, and short.
Hobbes reads as a Utopian monarchist.  He argues, in effect, that with "a common Power to keep them all in awe," people would prosper, enjoying those things denied them by the war of all against all.  He understood the prisoner's dilemma.  But there is another way to view the war of all against all.  Any given man can decide simply to win it.  It's a bad choice for most, and it is hard on those who don't win, but the choice is available.  Just ask Vladimir Putin.  Or Donald Trump.

Trump and Putin see the world in zero-sum terms.  They are obsessed with winning, because they have doped out that they cannot do as well by sharing a growing pie as they can do by drinking everybody else's milkshakes.  But that's what the Prisoners' Dilemma is all about: it is always better to steal, if one will not be punished for it by a common Power, than not to steal.  It's not enough to argue that, if everybody steals, we are back in a Hobbesian war.  That argument only works if enough people believe it.  The good behavior must be "coordinated."  Otherwise, the honest man simply becomes the one stolen from.

Hobbes's "common Power" comes in many forms.  One is morality, the shared value system whereby self-esteem derives from not making war against those it would be best not to make war against.  If enough people in a community believe it is wrong to steal, then they won't steal.  Whether that belief is supported by the fear of God, the fear of legal sanction, the fear of ostracism, or the bootstraps we call virtue, the good behavior effectively enjoys a "common Power" sufficient to end the war of all against all.

Morality is the most important driver of good behavior, far more so than the external sanctions.  The sanctions are there to catch the moral weaklings: if you don't see the damage your behavior would do if everyone else mimicked it, we will provide a disincentive for our mutual benefit.  But morality is underlain by material conditions.  Unless cooperation - obedience to law, etc. - yields a better result than defection, people will lose the sense that cooperation is worth the restrictions it imposes.  To put this in game theoretical terms, unless the coordinated game is a plus-sum game, in which the pay-offs exceed the losses such that enough players are enticed to join in, people will revert to a zero-sum view of the world, in which the only way to win is to make somebody else lose.

That view changes everything, and I think it explains the gulf that exists between the Trump voters and their antagonists, not to mention successful states and their kleptocratic enemies.  Trump is about winning a zero-sum game; his opponents are about working together to create a bigger pie and sharing that pie in a politically acceptable way.  In a plus-sum society, a politically stable number of people must be getting more pie soon enough to keep them from thinking it's ok to take someone else's pie.  One can see how losing a war to an unforgiving victor (Germany at Versailles), or losing jobs to an emerging economy of low-wage workers, or seeing all of the gains from trade inure to the benefit of 1% of the population, might lead the common man to believe that morality ain't really all it's cracked up to be.  Maybe we need to be winning rather than sharing.

My internal reductionist sees the "plus-sumness" of one's worldview as a key determinant of behavior.  He also sees self-esteem as the prime motivator of behavior.  If I feel good about inflicting losses, because I see the world as a place where my success depends on those losses being inflicted, then I become or support a Trump.  If, on the other hand, I feel bad about inflicting losses, because they are counterproductive to my sharing in a bigger pie, I become or support a Bush or a Clinton.  Note, this is not a right-left thing; plus-summers can disagree wildly about how to grow or share the pie.  No, it's more of a zeitgeist thing: can the pie be grown and shared, or can't it?

Being a citizen of a "great" country is a  source of self-esteem, "big league."  We want to make America great.  If we believe from looking around us that greatness can come only from "winning," because we tried sharing, and it just isn't working out for enough of us, then we will elect a zero-sum leader.  It's a mistake, because there are plus-sum solutions to our problems, but we need to understand that those solutions are counter-intuitive and not likely to be tried until simpler things have been tried..  (For one thing, sharing the benefits of outsourcing labor require a denigration of work, itself a crucial source of self-esteem in a plus-sum or zero-sum world.)  With any luck, we will find that a non-violent war - a trade war, say - merely impoverishes both sides, i.e., that trade really is a plus-sum activity and that the problem in the US has been the not the paucity but the maldistribution of its benefits.  If that happens, we may move one step closer to solving our problems.  On the other hand, there may be blood.