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

by Bruce Bueno De Mesquita

  The analysis certainly suggests different worlds depending on whether American troops are in Iraq beyond August 2010. If Iran can strike a significant partnership arrangement with Iraq, as is likely if the United States withdraws, Iran will be well on its way to asserting itself as the dominant power in the region and will position Iran to resume its aggressive efforts to export its form of fundamentalist Islam. Such a triumph might even reverse the Ayatollahs’ slide toward lost political control. Fortunately, these developments are unlikely because President Obama is likely to be a man who sticks to his word. Keeping U.S. forces in Iraq appears to be sufficient to deter the strong ties between Iran and Iraq that would provide a basis for Iranian military intervention to defend the Maliki government against a potential Sunni uprising. And it also appears to be sufficient to keep Maliki strong enough that Hashimi is likely to think twice before attempting to push him aside. With a continued U.S. military presence, time can be bought to provide the opportunity for a less anti-U.S. regime to take control in Iran, a trend that emerges in the game under such conditions. Staying creates the chance to deal with a “normal” petty dictatorship and maybe, just maybe, even a nascent more democratic regime. Withdrawal raises the prospects of helping the Ayatollahs stay in power while also jeopardizing the prospects of a pro-U.S. Iraq in the future.

  With our analysis in hand, we can cast the debate over whether to leave the troops in place or pull everyone out by August 2010 in a clearer light. Pulling out is tantamount to inviting Iran to step in to fill the void. That would be extremely dangerous from the American perspective. On the flip side, however, we should also ask to what extent a continued U.S. presence is likely to stymie efforts by President Obama and his secretary of state, Hillary Rodham Clinton, to negotiate a resolution of Iran’s growing nuclear threat. The risk, based on other assessments I have done, seems small. What is more, if the Qum Quietist Ayatollahs are on the rise, as seems true from the game, and if the Bonyads and the military are also on the rise, then Iran is soon to enter a more pragmatic era that will help foster resolution of issues, like the nuclear one, that loom so large now. Time will tell. I invite others studying these problems from different perspectives to dare also to be embarrassed and tell us now what they think will happen two years into the future.

  11

  THE BIG SWEEP:

  THE HISTORY OF WORMS,

  OR BALI HIGH, BALI LOW

  PERHAPS A GOOD place for us to close is with an example that looks way back in time and one that projects way forward in time. First, I’ll evaluate a problem that is almost nine hundred years old, using only information possessed by the relevant decision makers at the time—popes and kings—to illustrate how game theory can capture and predict tectonic shifts that alter society over the course of hundreds of years, in this case the period between 1122 and 1648. Then we’ll take a look at ourselves one hundred to two hundred years from now.

  But first, let’s go back to 1122 and see how we could have predicted then the essential end of the Catholic Church 526 years later.

  The Catholic Church is not what it used to be. In the good old days, especially before 1648, the Catholic Church was to European politics what the United States is today: the hegemonic power, the big cheese, the capo di tutti capi. That was not always true. Before the tenth or eleventh century, it was big, but not that big. The pope was the bishop of Rome and not much more. Between about 1087 and 1648, the political clout of the Church rose and then fell. This happened, in my opinion, mostly because of a deal it struck with the Holy Roman Emperor in 1122 and with the kings of France and England at about the same time.

  The pope has a great job. He lives in terrific digs right in the heart of Rome. He has a fabulous art collection, the best supply of Italian food anyone could want, and even his clothes, we must admit, are pretty cool—his hats are out of this world. He travels wherever he wants in grand style, and he is adored by millions of people. Still, it’s not as good a job as it once was. The best time to be pope was between the papacies of Innocent III (1198-1216) and Boniface VIII (1294—1303). Those were the days when popes really had it all—fame, glory, riches, sanctity, power. After that, they went into a long downward spiral, punctuated most noticeably by the Treaty of Westphalia that ended the Thirty Years’ War.

  The Treaty of Westphalia in 1648 formally made kings sovereign within their territorial boundaries. They could choose (or let the people choose, an idea whose time had not yet come) the religion for their domain. The closer a kingdom was to Rome, the more likely it was to remain Catholic. As one got farther from the pope’s reach, however, Protestants did better. Westphalia enshrined the idea that foreign powers should not interfere with any country’s internal policies. This really limited the Catholic Church’s ability to dictate policies as it had done for centuries. Although the Treaty of Westphalia made these points explicit, they had been in the works for a long time. And the real action that made such conditions feasible started at least five centuries earlier, when the sale of bishops’ positions was resolved by the Concordat of Worms.

  Historians have a quite different take on the development of modern sovereign states than I do. My view is shaped by the game that was set up at Worms. The standard account is that the Catholic Church promoted economic growth (banning usury only because it was sinful) and managed reverent kings who deferred to the popes’ choices of bishops, which gave the Vatican localized control over much of Europe. My perspective is that the Church actively tried to hinder economic growth in the secular realm and that kings only really deferred to papal choices for bishops where and when they were forced to for economic reasons. My view looks at the Church as a political power more than as a religious institution. Please understand, I am not questioning the sincerity of Catholic religious beliefs today, or at any time in the past. I am just recognizing that in addition to its religious mission—maybe because of it—the Catholic Church played power politics.

  I contend that, eventually, economic growth made the pope all but irrelevant politically, and it was that very growth—and the contest for it—that made the terms of the Treaty of Westphalia ultimately possible. I will show how each of these developments was dictated by the strategic implications of Worms and, therefore, that each was predictable. Worms established a way for popes to sustain substantial power for a long time, but it also made inevitable that the Church would ultimately become subservient to the state. In that sense, the pope of 1122 (Calixtus II) did what was good for him and his immediate successors, but at the price of selling out the political prospects of popes centuries later.

  The agreement reached at Worms resolved the investiture struggle over bishops. Before Worms, the Holy Roman Emperor and Catholic kings sold bishoprics within their domain. Naturally, the pope objected to this practice. He wanted greater control over bishops. They were, after all, supposed to be his emissaries. Under the concordat, the pope gained the right to nominate bishops, and the king the right to approve or reject the nominees. When a new bishop was installed, the king gave up control over the symbols and trappings of the bishop’s office, including its income. In exchange, the bishop promised military assistance and loyalty to the king as sovereign of the territory occupied by the bishopric. In this way, the king transferred back to the church, and to the bishop as its agent, the right to the tax revenues from the see. During the vacancy between the death of the old bishop and the consecration of the new one, the revenue from the bishopric went to the king. This revenue could be substantial. The longer the bishop’s office remained vacant, the longer the king received the revenue instead of the church. But rejection of a papal nominee was bound to irritate the pope, and that could be politically and socially costly to the king. The pope could excommunicate the king, or he could interdict the bishopric. That meant that no one in the bishopric could receive any of the sacraments. This was tantamount to fomenting civil war against the king in that deeply religious age.

  The king’s right to the see’s income durin
g a vacancy represented a property right that belonged to the king as sovereign over the territory of the see, and not to the king as an individual. The king could not sell the future right to control the regalia, nor could this right be inherited except by ascent to the throne. The right belonged to the king’s successor, who might be his child or might be from an entirely new line. The king held the right to this income, then, as the kingdom’s agent and not as his personal, private property. This was a significant departure from feudal practice. It established the sovereign claims of the monarch on behalf of his citizen-subjects within the territory of each bishopric in his domain. It was the beginning of the state as we know it.

  Although the actual game set up at Worms is a bit more complicated than the model I present, the game tree in figure 11.1 is close enough to capture the essentials. The pope chooses to nominate a bishop. The nominee is either someone especially to the pope’s liking, or someone more to the liking of the king. The king, in turn, can agree to the pope’s nominee or reject him. If the king rejects the nominee, then he earns more money but annoys the pope, who must then nominate someone else to be bishop. If the king agrees to the pope’s nominee, then the king earns less money because the bishopric does not remain vacant for long, but he improves his relations with the pope. So as long as the pope and the king agree on a nominee, both benefit, although in different ways. On acceptance of a bishop, earnings from the see benefit the pope, and, depending on who the bishop is, the pope either has a loyal ambassador, or the pope relies on a person more loyal to the king than to the pope, a potential fifth-columnist within the pope’s circle. On agreement, the king has an acceptable bishop to work with, and if there is some delay between the death of the previous bishop and the installation of the new one, the king also gets some extra income. Figure 11.2, on the next page, shows a simple version of this game.

  FIG. 11.1. The Game Set Up at Worms in 11 22

  The pope’s choice looks pretty easy to make. If he nominates someone expected to be loyal to him—a relative or a member of his papal court—and the king accepts, the pope gets his best choice as bishop and he gets the income from the see, eliminating the vacancy as quickly as possible. The problem is that the king might say no to this proposal. Okay, you think, so maybe the pope should nominate someone loyal to the king. Then at least he gets the income. But the king could turn that offer down too. Here lies the kernel of the undoing of the Catholic Church 526 years later. Let’s look at the king’s choices with a numerical example to illustrate how this works. The scale of the numbers is not important here as long as the order of the size of the value to the pope and to the king under different conditions is right.

  Setting aside for the moment the matter of income, let’s say that the pope values a bishop who will be loyal to him at 5 points and a bishop loyal to the king at only 3. Not getting the king to agree on a bishop at all is worth 0 points to the pope. This order of values makes clear that the pope prefers his own guy to the king’s man, but he prefers the king’s choice of bishop to no bishop at all. Let’s say that the king places a value of 5 on a bishop who is related to him and a value of 3 on a bishop whose loyalty is expected to be with the pope. The value of having no bishop at all is 0 for the king, just as it was for the pope.

  Now comes the fun part. How much is the income from a bishopric worth? I will assume that a poor diocese produces an income worth 1 additional point for whoever gets the income. A moderately wealthy see’s income is worth 4 points, and a really rich bishopric produces an income of 6. The game tree shows the pope’s benefits first and the king’s below the pope’s at each place where the game tree ends.

  In Chapter 3, when we looked at the banker’s game (Paris or Heidelberg), I promised a more interesting game later, and here it is. To solve the game, the pope has to look ahead to figure out what the king is likely to do. The king’s decision depends very much on how valuable the income is from the bishopric. When the diocese has a small income—just 1 extra point—the king can get 3 points by agreeing to the pope’s choice of a bishop loyal to the papacy, but only 1 point—the value of the income—by rejecting that nominee. Now, the king would of course do even better if the pope chose one of the king’s relatives to be bishop—then the king would receive 5 points in value by accepting the nominee. The Concordat of Worms, however, stipulates that the pope moves first, nominating a candidate to be bishop. The pope has worked out that if he nominates someone loyal to him he will get 6 points, 5 for the bishop and 1 (in the case of this poor see) for the income. That is more than he can get by nominating a relative of the king. So in a poor bishopric, the pope picks someone he likes, forcing the king’s hand. The king agrees to the pope’s choice, and all is right with the world. This is the world that historians think prevailed because they noticed that kings almost never turned down a nominee to be bishop.

  FIG. 11.2. A Numerical Example of the Game Set Up at Worms

  The historians, however, are mistaken, in my opinion. If we look at differences in the income from dioceses in France, for instance, during the reign of Philip Augustus (1179—1223), we discover that the pope overwhelmingly chose people from his own court in poor dioceses, but he chose relatives of the king in moderately well-to-do bishoprics. That is exactly what the game set up at Worms back in 1122 leads us to expect, and that is the key fact that will make the pope want to limit the economic growth that kings can tap into.

  When the income is worth 4 points instead of 1, the king gets more value by rejecting a candidate to be bishop who is a papal loyalist than from agreeing to the nominee (4 points versus 3). But if the pope chooses a relative of the king to be bishop, the king is better off saying yes to the candidate than saying no, even though this means giving up the bigger income. The king receives a value equal to 5 points if his relative becomes bishop and only 4 from the income earned in a moderately well-off bishopric. So in wealthier sees, an attentive, politically savvy pope switches his strategy and gives the king someone the king wants. Then the pope earns 3 points for the choice of bishop and another 4 in income. That is the best he can do when he knows the king has an incentive to reject a candidate for bishop that the pope really wants.

  Now imagine a really wealthy diocese where the income is worth 6 points. The income from the diocese is worth even more to the king than getting along with the pope. The Church can no longer compete with the monarch for political control—the king just doesn’t care about bishops anymore. He just wants the income, and so he rejects any and all nominees. The Concordat at Worms breaks down and we are in a new world in which kings keep incomes in their territory and popes can pick whomever they want as bishops. That, of course, is essentially the situation for the modern Catholic Church. It remains a major religious body, but it is not a major political-military player.

  We can see that Worms set up a system that creates some interesting incentives. The higher the income from a see, the harder it is for the pope to get his preferred candidate as bishop. Valuable sees require the pope to make sacrifices. He has to agree to a bishop who in a pinch is more likely to support the king than the pope—or else the pope loses income. This gives the pope a reason to stymie economic growth outside the Church’s domain. In fact, shortly after 1122, the Church adopted a series of new programs that were likely to hinder economic progress outside the Church. Was that a coincidence? We cannot know, we can only see that changes introduced by the Church—and by kings—after 1122 were consistent with their new incentives created at Worms.

  For example, in the First Lateran Council (1123), a gathering of Church leaders to agree on important new rules, we can see that the role of celibacy for the clergy was made more important. The council prohibited the clergy from marrying or having concubines. The Church was clear about the motivation behind the stricter celibacy rules. They seem not to have been designed to promote purity so much as to clarify the Church’s claims on property. The new rules improved the odds that the property of the clergy would belong to the Churc
h rather than to heirs. At the Second Lateran Council (1139), more serious changes were instituted. This council dealt with questions of inheritance and usury. On the inheritance of the private property of deceased bishops, the Church raised the stakes and ensured that they, and not any secular venue, would be the beneficiary:

  The goods of deceased bishops are not to be seized by anyone at all, but are to remain freely at the disposal of the treasurer and the clergy for the needs of the church and the succeeding incumbent. … Furthermore, if anyone dares to attempt this behaviour henceforth, he is to be excommunicated. And those who despoil the goods of dying priests or clerics are to be subject to the same sentence.1

  By imposing excommunication on violators, the Church raised the risks that families or monarchs ran in trying to seize the “personal” property of deceased clerics. That put the money right where the Church wanted it: in its coffers.

  The council went on to make usury “despicable and blameworthy by divine and human laws,” and cut off usurers from the Church, depriving them even of a Christian burial unless they repented. “Usury” in those days just meant lending money with the expectation of making a profit, not necessarily a big profit as the term implies today. Before 1139, usury had been forbidden to the clergy, but it had not been elevated to a mortal sin for ordinary people. The effect of banning moneylending for profit was to raise the price of money and to create a potential shortage of would-be lenders.