Game Theory and Moral Economics

I have become a fan of game theory. Since I believe I am physically allergic to mathematics (it makes my brain hurt real bad), it is not the application of formulaic minutiae that intrigues me so much as some of the defining concepts and understanding how to apply them to questions of moral importance. But before we get to far, let’s chat about what game theory is. I think the title of Roger Myerson’s book, Game Theory: Analysis of Conflict (Harvard University Press, 1991), goes very far. Game theory is a scientific approach to understanding the past and predicting future performance. It is a powerful tool to help overcome the downfall that besets those who refuse to understand history as it informs how to live into the future, i.e., informing wise decision-making.

Since I am much more interested in the moral issues of decision-making (which only sometimes make my brain hurt) than the migraine inducing wrath of higher mathematics, I engage game theory only as a framework for the discussion because, as said, its logic includes terminology that has enormous moral implications. I will not go deep into that terminology since derivations within the constructs of game theory introduce ideas that require proofs and theorems, which are precursive symptoms of my migraines and untowardly involve actually indulging in calculations and odd symbols that need too much explaining, so much that I refuse to have them explained to me. Frankly, proofs and theorems have no place in genteel discourse as they necessarily require at least everyone other than the speaker in most social settings being left feeling the fool and afraid to ask the detailed questions, nor take the years of additional education, necessary to grasp whatever it is the speaker seems to be rambling on about. I always nod, think of other things, and take her or his word for it.

However, all that rambling behind, there are some baseline concepts that are useful: there are two types of games (we all understand games, right?) which are actually three (and see already it is starting to involve mathematics so I will tread very lightly). The two types of games are zero-sum games and…wait for it, non-zero-sum games, the opposite of zero sum games…but not so much. Non-zero-sum games can be either negative sum games or positive sum games. Allow me to illustrate each simply.

A zero-sum game is one in which whatever reward one player achieves cannot be achieved by another player and the outcomes are of a fixed amount. For example, in a poker game, the sum total of all the bets are no more or less than the sum total of all the bets. The outcomes are simply a matter of who goes home with other folks money and who eats Ramen noodles until payday. If $100 comes to the table, that amount is exactly what leaves the table. If one person gains, another person loses. That’s the way we expect most games to be played…but it ain’t so!

There are games which result in negative sums. The classic example is war. While conquest may be yield tribute or immediate gain through loot, the downside is incalculable simply due to the long term lost productivity of those killed in the war and the productivity of all of their progeny into the unforeseeable future. The immediate loss of life in a war is only a small measure of the ultimate accumulation of losses. A lot of criminal activity is also negative sum, especially if it results in loss of life (same progeny issues as war) or physical harm (whether to limb or property), but also in the overall costs to society for legislative expenses, policing, jailing, courts, etc. A large portion of the costs of the legal system include the housing and attempts at rehabilitation of criminals. The accumulated losses of such games outweigh any measurable positive that may have resulted, though in war and crime it is difficult to justify that there is much in the way of positive gain other than some forms of immediate gratification (though the establishment of freedom and the removal of economic and political oppression can throw a monkey wrench into the calculations).

BUT! There is one type of game, the positive sum game, which holds real promise. In fact, throughout biological and cultural evolution, the proliferation of plant and animal life, as well as the advancement of creature comfort and security for humankind, it is the accumulation of positive sum games far outweighing the negative or zero sum games that delivers us to this day wherein, despite an increasing global population, material wealth is accumulating more quickly than population…and the world is getting better off.

The fundamental principle of God introducing Eve into the Garden of Eden as helpmate (before He called her Adam’s wife) is cooperation. The greater the cooperation (and the incumbent collaboration – the sharing of information, whether data, processes, or creative ideas), the greater the productive efficiency and economic growth and prosperity.

So, here the logic of game theory meets morality: we can choose how we play the game! That is, we can intentionally avoid zero and negative sum games, if we can muster up the will power, and focus entirely on how to craft positive sum games. Jeffrey Sachs, the author of The End of Poverty, makes clear that there is now more than enough wealth in the world to end abject poverty. Thus far, we (the human race) have not demonstrated the political will to make it happen.

In addition to the abundance that already exists, there is an upside potential among the global poor, of some two billion people, that remains largely untapped. The productivity of these folk, once unleashed, will enhance global economics to levels only dreamed of before. Now, for the first time in human history, we have the resources (beyond the purely financial, especially in information and communications) to make that change happen. Will we choose to do so?

I invite conversation on possible strategies that can far surpass the failed beliefs and practices of of central planning, trickle-down economics (which has lent itself to deeper levels of wealth distribution inequity), and dependency-creating aid models. What is most encouraging is that game theory models can prove that the upside of investing in small enterprises, especially among the poor and marginalized, creates a more decentralized system, which even creation bears out (look into the diverse, decentralized complexity of the global ecosystem) as holding the greatest potential, that will bear the much more fruit.

The inequitable distribution of global wealth is THE moral issue of our day. Poverty lends itself to the proliferation of numerous evils, including crime, revolution, abortion, and so on. Much of the impact of these travesties can be mitigated by economic empowerment. I believe that changing how we do things economically is the standard by which this generation will decide if we see the next major movement in advancing God’s Kingdom in hearts, as the witness of economic justice, intentionally carried out by Christians, will gloriously demonstrate the love of God for all creation.