Tuesday, July 7, 2015

The Grecian Formula for Game Theory

It is said by Jeremy Bulow and Kenneth Rogoff in the Wall Street Journal that the Greek "Yanis Varoufakis, who was pushed out as finance minister on Monday, prided himself on using game theory in his negotiations." Could be.

But game theory also includes the Prisoner's Dilemma. In a repeated game the Prisoner's Dilemma shows that in a long-term relationship it always pays to be trustworthy. But in a final transaction with another party it always pays to cheat.

So I get what the national socialist leaders of Greece's Syriza Party are doing. They are doubling down, playing double or quits. They are playing the final game where it pays to cheat. Because it is not their money that they are playing with.

They are playing the 150 year old game of the left: pay up or we will teach you a lesson.

And France's socialist President Hollande and the lefty Spanish party Podemos, and Italian Beppe Grillo's Five Star Movement are all agreed that the EU (i.e., the Germans) should pay up and keep the Greek pension checks coming.

But I am interested in my own game theory, that every government is an armed minority in some territory that supports itself by rewarding its supporters with taxes on the work and wealth of the people in its sovereign territory.

The corollary of my theory is that you must think of the government and its supporters as an army on the march. Never mind about the battles: the first priority of the generals of the army must be to keep its soldiers fed and clothed. Because once the food gives out and the boots fall apart then the army will collapse and the generals won't have an army any more.

Now you understand what the July 5 Greek referendum was about. It was held to rally the troops one more time, to get them to forget for a week that they are running out of food and medicines, to keep the Syriza army in being for one more week so that the Greek government could keep up its rhetoric and keep threatening the EU and its bureaucrats.

The other lefty European parties have chimed in because that's their game too. To keep marchn' and protestin' in the faith that disruption will shake out new benefits from the political system. For now.

I use these metaphors for a reason: to demonstrate the cruelty and injustice of the left's politics. They use their supporters like soldiers in the armies of old, when poor villagers went for a soldier because they were starving. They use them for their power games, but in the end they leave them to die by the side of the road, sick and starving, as the generals of armies have ever done.

Once you accept the government's free stuff you are starting on the road that leads to Greece. You are placing a life bet that the government's checks will keep coming. But the trouble is that you are placing a bet like the starving yokel of the 18th century. You are forsaking the chance to become self-supporting with work and service, and marching down the road to nowhere, hoping that the government's commissary keeps the food coming.

In the aftermath of the July 5 referendum the Greeks were laughing and chanting in the streets. For what? That they were brilliantly manipulated by their leaders for one more week?

In the end, such leaders end up like Robespierre, sent to the guillotine and reviled as the "dirty Maximum."

1 comment:

  1. The exploitation of the young by the old revealed. 71 percent of Greeks between ages 18 to 24 voted "no" in the Greek referendum.

    The referendum exposed deep rifts among Greek society along the lines of age, income and political affiliation.
    Asked to explain the rift within their generation, several young Greeks called it a divide between haves and have-nots: those with secure jobs versus the unemployed or under-employed.