The Predictioneer’s Game: Using the Logic of Brazen Self-Interest to See and Shape the Future

by Bruce Bueno De Mesquita

  In the end, I believe advances in scientific knowledge almost always better the human condition. If we turn ourselves into Luddites, we’ll just shift the advantages of knowledge to others. Remember, after Galileo’s persecution by the Catholic Church, physics went into decline in Italy for centuries, until, perhaps, the arrival of Enrico Fermi on the scene. Despite the setbacks in Italy, that didn’t mean research into physics stopped. It moved to Protestant northern Europe, leaving Italy to fall behind. Similarly, efforts to stymie science in China caused that country, once the world’s most advanced in scientific knowledge and discovery, to descend into scientific oblivion. China’s emperors chose to have their people look within themselves rather than at the stars; China is still struggling to overcome the deficit it created for itself. I hope we will not make the same mistake. As for me, I continue to look for ways to improve my understanding of how the world of strategic human behavior works. And that’s central to my motivation to continue learning from past failures.

  As I said earlier, and as we’ve seen in this chapter, prediction can look backward almost as fruitfully as it can look forward, providing remarkable insight not only into what happened but also into what might have been. Accordingly, in the next chapter we’ll have some fun with history. We will look at how World Wars I and II might have been avoided, and how Sparta might have prevented its colossal collapse after its stunning victory in the Peloponnesian War. And while everyone knows Columbus sailed the ocean blue in fourteen hundred and ninety-two, what they don’t know is that his experience presents an interesting bargaining problem—one whose outcome explains why Spain said yes and why Portugal (among others) said no, forever changing the course of history. In looking at the past with a game-theory microscope we begin to grasp the logic behind the history we know (and a sense of just how un-inevitable history is) and, sometimes to tragic effect, the missed opportunities for strategic choices that would have altered its course.

  9

  FUN WITH THE PAST

  HERE ARE QUESTIONS and brief answers about four really big events in history:

  Why did Sparta lose its hegemonic position in Greece just thirty-three years after victory in the Peloponnesian War?

  Because Spartans loved their horses more than their country.

  Why did Ferdinand and Isabella decide to fund Columbus?

  Because he agreed to work cheap.

  How could World War I have been avoided?

  By British sailors taking a summer cruise to the Adriatic.

  How could World War II have been avoided?

  By German Social Democrats making nice to the pope.

  If the Spartans had not been so fond of horse races, we might all speak Greek today. If the British had been a little more adept at diplomacy in 1914, Austrians and Germans might speak English today, which, come to think of it, many of them do. Maybe in that case there would never have been a Russian Revolution, maybe Adolf Hitler would have stuck to painting, maybe there would not have been a Second World War or cold war or Winston Churchill (at least as we know him), and maybe the sun still would not set on the British Empire. We will never know. But we can approximate what might have happened if Sparta’s horses had run fewer races, or if Britain’s diplomats had shipped some of their sailors up the Adriatic in 1914, or if German socialists had shown more flexibility toward Catholics in 1933.

  Let’s be fair to the decision makers of the past. Just like those of today, they were hampered by difficult choices, complicated incentives, and poor foresight. Of course they could have done better if they had had a stealth bomber or a nuclear deterrent or a high-speed computer, but they didn’t. Does that mean their hands were tied? In one sense, yes, it does. They knew what they knew and did not have the technological or scientific foundation to do much better. But in another sense, we should not underestimate what they might have done. They did have logic, and, let’s face it, logic is logic. Its fundamentals have not changed in millennia. With enough people sitting around banging out calculations with an abacus or writing down results in the sand, they might have thought up and solved a model like mine, or one that’s better.

  I will explore all of these questions and their answers in this chapter. To do so, however, I have to explain a little bit more about how to think realistically about altering the world. Sure we can play games like “What if Napoleon had had a stealth bomber at Waterloo?” (probably not as useful an advantage as a few machine guns)—but he didn’t, and couldn’t. I prefer to play realistic games. That’s what we will do here. We will ask how some big events might have turned out differently if realistic alternative strategies had been pursued. So, how to think about what might have been? Answer: Think about what people could have done but chose not to do, and why.

  An acquaintance of mine studies the history of religion in a mostly political context. He is especially interested in the history of religion in Russia, and especially in its survival despite seventy years of official state-sponsored atheism. He once pointed out to me, both in bemusement and with amusement, that the way I differ from a historian is that I spend 95 percent of my time thinking about what didn’t happen. He is probably right. From the perspective of many historians, how things ended up was either inevitable, or, in a diametrically opposed way, the result of chance that could have swung any which way.

  I am not big on the idea of historical inevitability. If that were right, there would be no point in trying to be a political engineer, a predictioneer. The idea that history is a play and that we are acting out scripted parts with little freedom of choice seems silly at best and downright evil at worst. It risks justifying anything anyone does, no matter how terrible. This view says, “Blame the writer, not the actor.” I won’t venture to guess who the writer might be.

  Conversely, the notion that the developments that make up history are primarily a series of chance events seems equally odd to me. Why fight over ideas, select governments, build armies, fund research, promote literacy, create art, or write histories if all we are doing is twiddling our thumbs while chance developments send us bouncing around like the physicist’s particles? How can anyone deny strategic behavior and its consequences when we are surrounded by it in almost everything we do?

  To be sure, the world as we know it could have swung one way or the other. That’s why neither the past nor the future follows an inevitable path. There are always chance elements behind which ways things swing, but those chance events rarely decide the future. Bad weather may have been important in Germany’s failed invasion of Russia during World War II, but Hitler’s choice to delay his invasion while turning his attention to problems in Yugoslavia was a calculated risk. He regretted it later, but still, he knew delay increased the odds that the German army would face bad weather.

  The December 23, 2006, 6.7 earthquake in Bam, Iran, certainly was outside anyone’s control. It cost more than 26,000 lives. That represented nearly 20 percent of the approximately 142,000 residents of the area. Interestingly, just days before, a 6.5 earthquake shook the Southern California town of Cambria. Three people died out of the nearly 250,000 in the surrounding area. The Loma Prieta earthquake in 1989 killed 68 people in the San Francisco-Oakland area, a metropolitan area with a population of more than five million. The 1989 temblor was about five times larger than the Bam quake, and yet it killed—not to minimize the tragedy—only a tiny fraction of the local population, while in Bam the death toll was horrendous. Is the vast discrepancy between deaths in California and deaths in Iran from earthquakes a matter of chance, was it inevitable, or was it a matter of strategic decisions?

  The answer the press offered at the time was that people in Bam lived in mud and stone houses and people in California did not. Yet we must ask: Why do people in a wealthy country with vast oil reserves live in mud houses? It is tempting to speak of natural disasters—earthquakes, floods, droughts, famines—as if some parts of the world just have terribly bad luck. That these are dreadful natural events there is no doubt, but are
they really natural disasters? Certainly such terrible events are random from a political or social perspective. Their causes are well beyond human control, at least given the current state of knowledge in predicting earthquakes, hurricanes, droughts, and tsunamis. But their consequences are not.

  Death tolls from cataclysmic natural events are vastly higher in countries run by dictators than in democracies. Democratic governments prepare for disasters, regulate construction to increase the chances of surviving events like earthquakes, and stockpile food, clothing, and shelter for disaster victims. Why? Because governments elected by the people are largely accountable to the people. Governments selected by the military, or the aristocracy, or the clergy, or the one legal political party are accountable to very few. It is those few they protect, not the many, because it is at the pleasure of those few that they rule. No, even chance events rarely have consequences that are primarily due to chance. Strategic choices lurk behind who wins and who loses, who lives and who dies, even when nature seems to be the prime culprit.

  Let’s take a look at some important turning points in history to see how strategic thinking contributed to developments, taking them out of the realm either of the inevitable or of the random and unpredictable. Let’s see how strategic modeling might have altered the direction the world took. Ancient Greece provides a good starting place.

  SPARTA’S GALLOPING DECLINE

  Sparta, you will recall, won the Peloponnesian War (431—404 B.C.), defeating Athens and emerging as the leading power in Greece and perhaps the world. Yet just thirty-three years later, Sparta was handily defeated by Thebes at the battle of Leuctra. So, in the span of a generation and a half, Sparta went from victory in the age’s equivalent of a world war to a defeat from which it never recovered. How could Sparta go from the pinnacle of glory—the United States of its time, the hegemon, the greatest power on earth—to the nadir of defeat—the vanishing Austro-Hungarian Empire of its day—in a mere third of a century? The answer: They loved their horses more than their country.

  Pythagoras died about three generations before Sparta defeated Athens. I mention this to call attention to the fact that the essentials of basic mathematics, especially geometry (but not probability), were readily available to educated Spartans. Their system of government emphasized education, although military prowess was a much greater focus than what we today might call book learning. Still, the Spartans could have assembled a team of mathematicians or political consultants to work out the dangers inherent in the course they followed between their great victory in 404 and their decisive and disastrous defeat by Thebes at Leuctra three decades later. Had they done so, they would have seen that their military success put their state at risk because it changed who got to vote and therefore who got to govern. As we know, voting rules can fundamentally change the very direction of politics. They did for Sparta.

  To understand what happened we need to take a brief look at how Sparta was governed. Theirs was a strange and complicated form of government. Citizens, known collectively as Spartiates, were a small part of the population. By 418 B.C. the male Spartiate population fell to around 3,600 from its peak at 9,000. This was out of a total population in Sparta (including a vast majority of slaves) of approximately 225,000. After the defeat at Leuctra in 371 B.C., the Spartiates consisted of fewer than a thousand men, and it kept dropping after that. The number of people who ran the show was plummeting, for reasons directly linked to their victory in the Peloponnesian War. As we saw in Chapter 3, change begets change.

  The male Spartiates elected their leaders by shouting loudest for the most desired candidates. How strong the shouts were for different candidates was determined by judges behind a curtain (or in a nearby cabin, unable to see, but able to hear the assembled citizenry) so that they did not know who voted for whom. In this way, the Spartans chose the two people who would simultaneously rule as kings (I said it was a strange and complicated form of government). They likewise chose the Gerousia (a select group of men over sixty who served for the remainder of their lives once elected), and the Ephors, who were elected to a one-year term.

  The kings were in charge of military matters and national security. The Gerousia—Sparta’s senior-citizen leaders—set the legislative agenda, while the Ephors had financial, judicial, and administrative power. They even had the authority to overrule the kings, while the Gerousia could veto decisions by the assembly of Spartiates. Under Sparta’s system of checks and balances, Ephors could trump the kings and the Gerousia could trump the Ephors. That made it hard for any one of these elected groups to assert full control over Sparta’s government.

  Male Spartiates had the privilege of serving in the army, defending Sparta against its enemies. This was the driving force behind Spartiate life and the defining principle that reflected what Sparta stood for above all else. Spartan citizens were meant to be devoted to their city-state and to be better prepared than any rival to defend themselves and their society. Spartan warriors either died on the battlefield (carried home on their shields) or they returned home alive (and presumably victorious) holding their shields. Any Spartan who returned from battle without his shield was vilified forever as a coward, no matter what heroic deeds he might later perform.

  In addition to military service, Spartiates were obliged to sponsor monthly banquets for their groups of fifteen, known as syssitions. Failure to pay one’s fair share to maintain the syssition and its banquets meant losing citizenship. As the term “spartan” now betokens, the banquets were not lavish affairs. They were carefully scripted to ensure equality among all Spartiates. They were occasions for sharing with one’s comrades and also providing for the impoverished masses that benefited from the leftovers.

  Victory in the Peloponnesian War, however, created new ways to amass great wealth, especially among the military officers assigned to govern the lands conquered by Sparta. With the empire growing, the uneven distribution of wealth between those Spartiates who controlled colonies and those who did not steadily eroded the Spartan commitment to relative equality among the citizens. This growth in empire led quickly to two disastrous consequences.

  First, the newfound wealth led to more lavish banquets. Here, like the earlier example of a failed pharmaceutical merger, the dinner menu turns out to have mattered for the future course of events. This time, however, the cost was much bigger than the failure of a lucrative business opportunity. The more upscale menu may have changed the course of history. As the price of obligatory banquets went up, many Spartiates were compelled to drop out of their syssition because they could not afford the costs. This meant that they lost their rights as citizens. So when it came time to vote for leaders, some citizens were now disenfranchised ex-citizens. They couldn’t satisfy the requirements and so they lost their right to vote. The voting rules, tied as they were to providing what had become expensive banquets, shifted control over Sparta from the relatively many (a few thousand) to the few wealthiest citizens (hundreds rather than thousands).

  Second, the cost of maintaining citizenship distorted careers, diminished commitments to remain in Sparta, and turned the political fabric of Spartan life upside down. Young men increasingly chose military commands outside the city-state proper rather than staying at home. They aggressively sought colonial postings because these were the path to wealth and influence. Competition for such positions further corrupted the Spartan system as these lucrative jobs were gained through patronage and cronyism instead of merit and accomplishment.

  No longer was Sparta the martial—if I may, spartan—society envisioned by its founder, Lycurgus, four hundred years earlier. Instead, wealth grew in importance, whereas military prowess alone had been the dominant source of prestige before. As wealth grew among a few especially successful military officers, they pushed the cost of maintaining citizenship up, turning themselves into oligarchs. The rising price of banquets compelled more members of the Spartiate to become selfish rather than devoted to the common good. Those who were not driven
by greed, or just weren’t good at becoming rich, also tended to be those who could no longer pay for banquets and so couldn’t maintain their rights as citizens. The consequence was that the ranks of Spartan citizens devoted to that city’s founding values shrank. Those who remained became greedier and more self-centered. They needed to be if they were to survive as players on the new Spartiate stage. Greed and self-interest became the way to make a success of one’s Spartan citizenship. Remember game theory’s dim view of human nature? Well, here was that dim view hard at work, gradually transforming a successful society into a basket case.

  What, you may well wonder, does this have to do with horses and horse racing, let alone Sparta’s military defeat by Thebes? With this background information at hand, we can now answer these questions and see how game theory could have helped the poor Spartans see where they were headed, even as it predicts that self-interest will beat out the collective good just about every time.

  The Greek writer Xenophon provides us with an explanation of what happened to Sparta at Leuctra. Here is what we know from him as Sparta approached its battle against Thebes. We know that the army of General Epaminondas, the leader of Thebes’s military campaign, was greatly outnumbered by the Spartan army under King Cleombrotos. There were about 11,000 Spartan soldiers to only 6,000 for Thebes. The manpower advantage being with Sparta, victory should have been relatively easy, particularly because Sparta had a history of superior cavalry as well as foot soldiering. It also had a phenomenal track record of military success. What was the status of Sparta’s usually exceptional cavalry as the battle approached?

  Xenophon reports, regarding the contending cavalries (where Thebes had a numerical advantage):

  Theban horses were in a high state of training and efficiency, thanks to their war with the Orchomenians, and also their war with Thespiae; the Lacedaemonian [i.e., Spartan] cavalry was at its very worst just now. The horses were reared and kept by the richest citizens; but whenever the levy was called out, a trooper appeared who took the horse with any sort of arms that might be presented to him, and set off on an expedition at a moment’s notice. These troopers, too, were the least able-bodied of the men—just raw recruits simply set astride their horses, and wanting in all soldierly ambition. Such was the cavalry of either antagonist.1