The few remaining Spartiates—the richest citizens, as Xenophon reports—withheld their best horses and their best horsemen from the risks of battle. These they thought better kept to run in races on which there would be heavy betting and lots of money to be made. Thus, Sparta’s few remaining citizens, the self-centered and the greedy, chose to put their worst horses and least experienced horsemen in battle and to keep the crème de la crème for themselves. They sacrificed their city-state to preserve their personal prospects at the races. As I said earlier, the Spartans apparently loved their horses more than their country—a telling symptom of the sickness that was draining the life of the famed city-state.
Looking at Sparta’s decline from this particular angle, I constructed a little data set to put into the forecasting program. It shows that the Gerousia and kings were committed to protecting Spartan security from the outset even if it meant personal sacrifices. I assumed that the Ephors started out favoring making money, as indeed it appears they did. The program shows, however, that they would quickly sacrifice their personal wealth (for instance, their horses) to protect Sparta. But what of the colonial commanders and the richest Spartiates, who remained in Sparta? They were the core of the army and the most important people deciding whether to provide their very best for the Spartan cause or for themselves (in horse terms, to use them for the cavalry or to use them for the races). The model shows them to be utterly impervious to pressure from their government, their kings, the Ephors, and the Gerousia. All the government’s checks and balances, all the history of Spartan devotion to the common good, all the threats of the moment couldn’t convince these citizens to do what was best for their country.
It seems that the society’s newfound wealth, and the shift in people’s values produced by that wealth, changed their behavior. Just as in the earlier discussion of Leopold in the Congo and in Belgium, Sparta’s changing conditions led to changed behavior that in turn changed the course of Sparta’s future. Had any smart Spartan looked at the data enough in advance, perhaps they would have seen the threat of collapse that their new “game” exposed them to, and maybe, just maybe, they would have thought more about the long term.
So it was that Sparta fell quickly from monumental power to weak and vulnerable backwater. There was nothing to be done to save Sparta according to the game model. The victory against Athens sowed the very seeds of Sparta’s destruction.
Can we see here a larger lesson to be learned about the risky game that empire expansion might generally entail? Might U.S. efforts to spread democracy, to overthrow “rogue” regimes, come back to bite us, creating the sort of greedy, self-centered egoism at the top that brought down Sparta, or might these efforts rein in the worst abuses suffered by hapless souls elsewhere at the hands of their own greedy, grasping governments? These are questions worth pondering. History certainly has much to teach us.
Sparta’s defeat revolutionized thinking in the Greek world and made possible the resurgence of Athens. The Athenians, with a more democratic—by the standards of the day—and therefore more accountable administration, were able to adjust to their earlier defeat. They could make changes that allowed them to bide their time, rebuild their strength, and reclaim Greek leadership when Sparta faltered. Sparta’s increasingly concentrated oligarchy left it with little to fall back on in the face of its unprecedented defeat. Maybe, then, we are all fortunate that Spartans loved their horses so much. Had they not, the early Greek experiment with democracy might have failed miserably, and this most beneficial form of government would have died so soon that no one would have thought to resurrect it a couple of millennia later.
Sparta’s love of horses reminds me that it is time to get back in the saddle again. You know—where a friend is a friend. I have in mind the friendship that Luís de Santangel—you’ll find out about him soon enough—owed to Ferdinand and Isabella of Spain and the consequences of that friendship for Christopher Columbus and even for those of you reading this book anywhere in the Western Hemisphere, the so-called new world. Santangel is the unsung hero of our next game. He reminds me of the French bankers we met in Game Theory 102. They, like Santangel, understood that demanding too much leads to nothing. Just as the French bankers put a merger together by agreeing to let the German executives remain in Heidelberg, Luís de Santangel figured out how to merge the interests of Spain’s monarchs with those of Columbus, to the benefit of both.
So let’s leap ahead now to the end of the fifteenth century. That time, the age of discovery, created another, new form of challenge to the dominant political order of the day. Whereas Sparta suffered from becoming rich, Spain suffered in comparison to its great-power neighbors like Portugal and the Catholic Church because it was poor. With Santangel’s help, Columbus would change all of that, at least for a century or so, but not before he would have to swallow some pretty bitter pills in order to make a deal.
WHY SPAIN “DISCOVERED” AMERICA
In fourteen hundred and ninety-two Columbus sailed the ocean blue. I know, you already know that. It is curious, though, that most of us know very little about why Columbus, an Italian navigator recently employed by the Portuguese court, sailed under the Spanish flag. The story behind Ferdinand and Isabella’s decision to back Columbus’s journey rests on the thinnest of distinctions between rejection and acceptance. Surely had it not been for Columbus, someone else would have found the “new world,” but then the course of European and American history would have been radically different. There would have been no Spanish empire, no Spanish armada for the British to defeat, probably no Sir Walter Raleigh, no Monroe Doctrine, no Juan or Evita Perón, and who knows what else. (If you will allow me a little personal view on Colum-bus’s importance, probably without him there wouldn’t even be a Bueno de Mesquita family anymore. They were pretty prominent back then, operating within the Columbus family’s fiefdom of Jamaica as—of all things—pirates of the Caribbean.2)
Columbus first put forth his proposal—to find a westward passage to Asia—to the Portuguese crown, then the world’s greatest sea power. He would sail for Japan by going west from the Canary Islands. According to his reckoning, the distance to Asia was about 2,400 nautical miles. He did not think that a significant land mass was in the way of the passage, although he did expect to encounter some unknown islands. Columbus understood that there was a real risk that there would be no opportunity to get fresh water and food for his crew once they left the Canary Islands, but he did not view this as a severe problem. He believed his ships could carry enough food and fresh water for such a journey. He felt that he would have no trouble reaching his destination or returning safely. Columbus asked Prince Juan II of Portugal to fund his project—and was turned down flat.
Many factors worked against Columbus’s effort to sell his ideas to Portugal. Thanks to the vision of Prince Henry the Navigator, they already had lucrative trade routes and colonial expansion along the North African coast and as far away as the Azores, about 900 miles out in the deep water of the Atlantic Ocean. Additionally, at about the same time that Columbus made his offer, Bartholomew Dias discovered the Cape of Good Hope at the tip of Africa, and therefore, implicitly, the passage up the eastern side of Africa and on to Asia. Dias was already under commission by the Portuguese government and had, by the late 1480s, discovered critical features of an eastward path to the Indies. The sea route he found offered ample opportunities for resupplying ships at coastal stations along the eastern shores of Africa. And finally, Portuguese scientists disagreed with Columbus’s estimate that the journey involved only 2,400 miles. They thought that the distance between Portugal and Japan going west was not much different from the distance between these two countries going east around the tip of Africa. They believed the distance from the Canary Islands to Japan was about 10,000 miles (it is actually about 10,600 miles), plus the additional miles from Lisbon to the Canaries. This difference in estimates of the distance was crucial. From the Portuguese perspective, the probability that ships c
ould reach Asia by sailing west was almost zero. No ship of the day was capable of a ten-thousand-mile journey without stopping in ports along the way for food and water. Quite simply, the Portuguese government believed that such a journey was doomed. There just wasn’t much in Columbus’s plan for the Portuguese.
Disappointed, Columbus sought support elsewhere. His brother, Bartholomew, tried to entice the kings of France and England, but they were tied up in domestic political problems at the time and showed no interest. Columbus approached the Spanish government in 1486. As with his brother’s efforts in France and England, Columbus found little to encourage him in Spain. The Spanish monarchy was too busy to pay much attention to Columbus. There was trouble with their Moorish neighbors and with the pope, especially since the Spaniards had backed the schismatic pope in Avignon.
Columbus, having no place else to turn, stayed on in Spain for the next six years, repeatedly being put off, awaiting the findings of governmental commissions studying his proposal. He was told that a firm decision could not be made until Spain resolved some of its internal problems, most notably its war with the Muslim-dominated Spanish state of Granada. That struggle finally came to an end in 1492. In fact, 1492 marked a major turning point for Spain. The defeat of Granada in January meant that all of the important kingdoms of Spain were now united under Ferdinand and Isabella. At last they were ready to turn to the proposal made by Columbus. His time had come, but the circumstances were not so much in his favor, and he knew it.
The Talavera Commission had reported to Isabella in 1490 that Columbus’s plan was weak and advised against backing him. Like the Portuguese, members of Spain’s Talavera Commission felt that Columbus greatly underestimated the distance across the ocean between Spain and Japan. Columbus was able to point to evidence to support his estimate of the distance. He noted that bodies and unknown trees occasionally washed ashore. These, he pointed out, had decayed by amounts that were consistent with his estimate of the sailing distance. Of course he did not know—how could he?—that he was about right regarding the distance to the next really big landmass, but that landmass was not Asia, it was the Americas.
Columbus grew weary of waiting and made a take-it-or-leave-it offer. Given the negative reports on his prospects of success, and given that he was demanding payment up front, Columbus found himself once again facing rejection. Ferdinand, in particular, preferred leaving Columbus’s proposal to taking it. And so Columbus packed his bags and headed out of town. But this time, thanks to the intervention of Luís de Santangel, the course of Spanish-American history was assured.
Santangel, keeper of the Spanish Privy Purse, was roughly the Spanish equivalent of today’s U.S. secretary of the treasury. He saw the potential merits behind Columbus’s plan, and—most important—he saw a way to justify the risks by diminishing the costs. He called on the queen the very day that Columbus left Santa Fe, urging her to meet Columbus’s terms. Santangel feared (apparently mistakenly) that Columbus would sell his plan to one of Spain’s competitors.
Eventually he persuaded Isabella, who was more sympathetic than Ferdinand, to support the proposed journey provided that he, Santangel, would raise the money. It all came down to a matter of price. Columbus had begun by insisting that the Spanish monarchs pay the costs of the expedition in advance, including his compensation. The Spanish crown was unwilling to meet those terms. Later he reduced his price, asking only for the cost of three ships and their provisions and crew up front. He agreed to a 10 percent commission for himself and his heirs drawn from any wealth generated by his discoveries. That meant a smaller upfront cost, and it meant shifting most of the risk to Columbus and his sailors.
Of course, if Columbus succeeded, the value to Spain would be enormous: Spain would dominate a lucrative trade route and would become—as it did—a major economic force in Europe and the world. Under existing circumstances, Spain had no access to the Indies at all. They did not know of the eastward route around the tip of Africa, because the Portuguese kept their navigational charts secret. The Italians, Arabs, and others garnered the benefits from the overland caravan trade. But failure had its risks too. If the monarchs had paid out of Spain’s budget, they would have faced a real prospect of rebellion by Spain’s aristocrats. These very people had tried to overthrow Isabella’s father just a quarter of a century earlier, so theirs was no idle threat. That is why Santangel’s decision to raise the money privately was so crucial to Ferdinand’s change of view. He had removed the threat of rebellion by the Spanish aristocrats, who would have resented being taxed to pay for a scheme with little chance of success. Whatever the modern take on Columbus, we surely owe Luís de Santangel three cheers for a job well done.
The Spanish decision is readily modeled with just four players: Ferdinand, Isabella, Santangel, and Columbus. As is fairly typical of a negotiated contract or business acquisition, price is a big issue. Columbus wants the most he can get. Ferdinand wants to pay nothing now; he wants it all on spec. Isabella is less negative than Ferdinand, while Santangel is supportive of the proposed exploration, but only at a price he can raise. Columbus cares most, of course, followed by Santangel and then Isabella. Ferdinand is least focused on Columbus’s proposal, being more concerned with mending fences with the pope in Rome and managing his newly unified country. As king, Ferdinand has the most clout, but Isabella was no slouch and neither was Santangel. Columbus probably had relatively little ability to persuade anyone. After all, he had failed in his efforts for six years. Here, then, is the data set I constructed:
The initial prediction is between 25 (the weighted median voter) and 37 (the weighted mean voter). You can calculate those values yourself from the table. The eventual prediction after the model simulates the bargaining process and its dynamics is for an agreement to be reached at whatever price Luís de Santangel was prepared to offer as long as he was prepared to pay more than Isabella. If Santangel had offered less than Isabella’s price, no deal would have been reached and world history would be quite different. Santangel was no fool. He was a skilled strategist who understood how to persuade and to whom he needed to make his pitch.
In the model’s logic, Santangel first persuades Isabella and then Ferdinand to go along—at no out-of-pocket expense to themselves—and then he negotiates with Columbus. That seems pretty close to what actually happened. Of course, we don’t know how much he was actually prepared to pay, only what he did pay. That’s just the sort of information that my car-buying technique can ferret out, but to use that approach there have to be multiple bidders. Columbus knew—and probably Santangel, Isabella, and Ferdinand did not—that there were no other credible prospective buyers for his plan. So he probably agreed to a lower price than he could have gotten. Too bad Columbus didn’t have a predictioneer available to help him negotiate a better arrangement, but the important thing is that the deal got done.
While the implications of Columbus’s success are pretty apparent to us in the new world, it also had far-reaching consequences for Europe, which provides a nice little segue to our next case, World War I. You see, Ferdinand and Isabella’s nephew, Philip II, was born in Valladolid and became the Spanish monarch in 1556. Philip was Spain’s king during the defeat of its armada by England in 1588, which laid the groundwork for England’s emergence as a great power and rival to the Spanish empire. Philip also was the Holy Roman Emperor, making him one incredibly powerful fellow. He ruled over Spain and its American empire (thanks to Columbus, Luís de Santangel, and Philip’s aunt and uncle), but he also ruled over Austria, Franche-Comté, Milan, Naples, the Netherlands, and Sicily.
And so the success won by Luís de Santangel’s clever maneuvering translated a generation later into binding Spain and Austria together. It also translated into sustained hostility between the French house of Burgundy and Philip’s Habsburg family in Austria and elsewhere. We already know of the tension between Philip’s family and England following the armada. And so, with lots of action along the way, the times of Ferdinand
and Isabella had already set the foundation for “the war to end all wars” in 1914.
Let’s have a look at the aftermath of the assassination of the Archduke Franz Ferdinand, heir to the Austro-Hungarian throne. We can use the history of the crisis precipitated by the Archduke’s murder to ask whether the First World War (the European monarchies’ last gasp) was inevitable or could have been avoided. And if it was avoidable, what needed to be done differently? We will use my new forecasting model to address these questions.
AVOIDING WORLD WAR I
The circumstances of World War I paint a truly sad picture. Wars almost always could be avoided if people just knew at the outset what the outcome would be. They can almost always make a deal before fighting starts that leaves both sides better off than is true during and after the war. This is so for the simple reason that whatever costs the combatants bear in fighting, they could avoid bearing while agreeing to the same conclusion as arises at war’s end. The problem is, of course, that each side is unsure at the outset how things will turn out. They bluff about their own strength and resolve in the hope of extracting a really good deal. Much of the time that may work. Wars, especially big wars, are rare events. Sometimes, however, bluffing is tremendously costly. Rather than reveal the truth, governments sometimes fight wars they would have liked to avoid, or at least know too late that they should have avoided. One way contenders in a fight could use predictioneering is to simulate what is likely to happen before the events actually unfold so that they can avoid this very problem, maybe even saving millions of innocent lives as a result.
The Predictioneer’s Game: Using the Logic of Brazen Self-Interest to See and Shape the Future Page 20