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A Beautiful Mind In An Ugly World

When John Nash wrote his doctoral thesis on non-cooperative game theory, little did he know that he would later become the subject of a Hollywood Movie and win the Nobel Prize, nor did he know that this theory would go to on to become the basis for international negotiations on Trade and the Environment.

The theory explains how to arrive at the mutually best as well as the mutually least worst scenarios when two or more subjects are competing to maximize their own positions.

The classic example of game theory involves two criminals arrested for committing the same crimes. The two of them were in cahoots and are both guilty as charged and face 10 years in jail if convicted of all crimes. The police only have sufficient evidence to convict them of crimes carrying 2 years jail time, but each knows that the one who gives up his partner will walk, whilst his partner does 10 years, if they both give each other up they will each do 7 years.

They have both promised each other to keep their mouths shut; if they trust each other to keep to the deal then they will each serve a relatively short jail sentence, which total jail time served (4 years) being less  than if one or both of them were to talk. If neither honors their promise they will each do 7 years. If one of them is honorable and the other keeps to his word, then the dishonorable one will walk away scot free whilst the other would get 10 years. The principle of game theory is that it generates equilibrium points, and it is these equilibrium points that negotiators should seek to reach when trying to negotiate multilateral agreements between rational parties.

 When applied to countries as opposed to people the theory remains the same, there are equilibrium points in negotiations be they for trade agreements or water rights or any other negotiations covering shared resources. Whether the cost is in jobs lost, water surrendered, or prices paid, the application of this theory generates equilibrium points assuming both parties behave rationally.

 As applied to international negotiations it assumes that the government of a country has the same autonomy concerning its State as the individual does over himself. This is not necessarily the case, especially in democracies.

In democracies governments have to win elections. To use the prisoner scenario, the government has to campaign on serving either a 2 year or 7 year prison sentence. The opposition has the luxury of being able to campaign on the zero year option. Now whilst this is not rationally achievable, it is attractive to a populace that is dissatisfied with the government of the day; that the opposition has no way of guaranteeing it can deliver it’s zero jail time promise does not mean it cannot win the election.

 And what then? What happens if a democracy elects a revolutionary government with a mandate to rule that agreements reached by a previous administration are illegal under national law, past or present. Just because a revolutionary government takes over via the ballot box rather than the barricades does limit their future actions.

The hope, obviously, is that once confronted with the realities of power, the new government of the day will act in a rational manner and comply with the rational agreements reached by the previous leaders. That relies on the false premise that humans are rational animals as opposed to animals with the ability to rationalize. Too many ambitious leaders are so eager to be the biggest fish in the pond, that they put their interests ahead of those of the pond; even if this means that the pond ends up as little more than a muddy brown puddle.

 Not only is this bad for their pond, it can have disastrous consequences for surrounding, inter-linked ponds. The more the adjacent ponds suffer, the greater the opportunity for, and likelihood of, extremist groups winning power in these ponds, as the little fish  start grasping at straws (mixed metaphor but you see what I mean).

So how does this vicious cycle end? If we assume that the initial pressure is a demand/supply imbalance, with supply being limited to the point where not only wants but what are regarded as basic needs are unable to be met, then the situation will be resolved when the demand/supply balance is restored, either through an increase in supply or, more likely, a reduction in demand. What will cause this reduction in demand? Less people.

How bad does it have to get before democracies will elect for war as opposed to negotiations? Obviously there is no absolute, if there were there would be even more countries at war with each other, exploding rather than just imploding. There is then another equilibrium, call it the devil’s, where the speed of decline is such that the population believes it has reached an untenable position whilst it still has the internal stability and material resources required to wage organized war.

 In a democracy, if the decline is slow there will be more time for expectations to be adjusted to meet the new conditions, most likely accompanied by a commensurate decrease in the ability to wage war as resources are diverted to meet more immediate needs. If the decline is too fast again the opportunity for war is reduced as there is insufficient time to adjust the mindset of the populace, they will be in too much shock to react. In a more totalitarian state where there is less need to appease the populace in the short term, there is less likely to be the decrease in military capability, and may well be an increase. Equally a totalitarian state is more likely to be able to adjust a rapidly changing situation, as the number of people required to form a consensus to take action is much smaller, additionally the world view of those who achieve power in totalitarian states tends to be even less benign that those who achieve power in democracies.

 This would suggest that the window of opportunity for waging war correlates to the level of democracy. Countries like China and Russia are more likely to initiate a resource war than say India or the UK, or indeed the USA. Despite what conspiracy theorists might want to believe, the US has expended far more resources than it has gained in its recent military adventures. In the resource wars of the future, collateral damage will more likely refer to the destruction of sources of future supply rather than to sources of future demand. It may well become policy to reduce sources of future demand to a level that maximizes future supply – yet another equilibrium.

 There are those who argue that technology will ride to the rescue, and be the white knight that saves us form the impending collision between an ever expanding population and an increasingly hostile climate.  As the situation continues to deteriorate, one of the first commodities to disappear will be rose tinted spectacles.

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