Friday, June 08, 2012

prisoner's dilemma world

The conceptual children of the Cold War came out of its belly with the apocalypse in their eyes, a mindset conditioned by the great global unconditional surrender of the Axis. There was a ghastly optimism in it that danced in the nuked ruins of cities, and then rebuilt them carefully, like the potential targets that they were. Keep your high use population away from the epicenter, and let the low use population take the brunt - that was the day's secret slogan.
Among this progeny one finds the “prisoner’s dilemma.” Like all the problems in game theory, the prisoner’s dilemma arose in the fold between economics and the Air Force – between the Cowles commission and the Rand corporation, between the economy of managed demand of the future and the Air Force’s interest in dropping hydrogen bombs, or at least  threatening to, for maximum effect. In reality, it came out of a problem in game theory developed at Rand and observed by Albert Tucker, a Princeton mathematician who grasped the structure of the game in a story about two prisoners who are confronted with a “game matrix” of three options. They can either both stay silent, they can, one or the other, rat on the other, or they can both confess. The payoffs are structured so that the one who rats on the other will get the most benefit – if, that is, the other doesn’t rat on him as well. If they both confess they will get the least benefit. The most rational option, the “equilibrium” point, is the most irrational from the point of view of self interest: that they both stay silent. That irrationality evolves from the fact that neither knows what the other is doing – they are isolated from each other.

This impressed game theorists, who defined rational in that irrational way that utilitarians and economists define it: as maximizing one’s own ‘advantage’. In this world, the advantage of, say, true repentence a la the end of Crime and Punishment is hogwash – Raskolnikov got it right the first time when he axed the pawnbroker. But in the world of Bentham and Raskolnikov, the prisoner’s dilemma seems to show that situations can arise when an action that is logically rational turns out not to bring the maximum payoff – that is, it turns out to be irrational. Of course, iterated prisoner dilemma games often tend towards the maximum payoff, but this is because iteration sneaks in communication between the two parties.

In Alexander Mehlman’s Games Afoot, which explains the prisoner’s dilemma, he uses a beautiful, hoodish terminology to divide the strategic positions open to the prisoners: the sucker and the traitor.

If we look at the prisoner’s dilemma game long enough, we can see something more than a variation of détente and deterrence between the superpowers: we can see the deep structure of American politics at the moment. It is a politics divided between “individualism” and “collectivism”, or, to put it more frankly, between traitors and suckers. Individualism is not actually a natural position – in the game,  it is a condition enforced on the players. This is a more difficult thing to accomplish outside the think tank laboratory, but you can approximate it through a vast media noise machine. Which is exactly what we have. And then you have the suckers – the “liberals” – who have made their bet on solidarity. But of course this solidarity is a funny thing – suspecting the traitors of having the better deal, accepting the terms of rationality as Raskolnikov defines it, it is solidarity with a bad conscience. Suckers in American politics have long satisfied their thirst for solidarity by being solidaire with liberal financiers and corporate heads. Not, by any means, the dreadful suckers who sweat and, when you give them computers and the Internet, immediately start using them to play online poker and watch porno – a fearful thing recently highlighted by the NYT.

The prisoners dilemma regime is at an interesting point. The neo-liberalism that attempted to “do’ social democracy whilst allowing the 1 percent to gorge themselves with a vast share of the social  product is now disappearing in the maw of “debt” – while who the “debt’ is owed to is a nicely obscured topic, never broached in polite circles. But as this happens, the prisoners start crowding into the cells. The capitalism that in their parents and grandparents lifetimes proved wildly beneficial, elevating lifestyles over three generation, is now spinning back. The generation coming up may be the first since the nineteen twenties to experience capitalism as a curse, rather than a blessing. The prison can only hold so many prisoners before they do start communicating. And who knows what “irrationality”will result.

Tuesday, June 05, 2012

Zona report

Juri Lotman begins one of his essays with the following anecdote:

“There is a story about an episode in the life of the famous mathematician P. L. Chebyshev. At one of his lectures on the subject of the mathematical aspects of cutting clothes, there appeared an unexpected audience consisting of tailors, fashion-able ladies, and so on. However, the first sentence spoken by the lecturer-"Let us suppose for simplicity's sake that the human body has the form of a sphere"-put them to flight. Only mathematicians who found nothing surprising in this opening remark remained in the hall. The text selected its own audience, creating it in its own image.”

The anecdote mixes in just that little bit of Gogol to make a flying leap forward into Lotman’s subject, which is that selection mechanism. I, however, think that the anecdote fits, equally, what has been happening to us in the economic realm in the Zona era. In 2008, I named the coming depression the Zona because it nicely crossed Tarkovsky’s Stalker, which concerned a mysterious radioactive zone, and the New Guinea Fore term for a condition, zona, characterized by trembling, hallucination, catastrophic weight loss and death. The Fore term means, literally, “ghost wind”. A neurologist, Gajdusek, won the Nobel Prize for tracing the cause of the Zona back to the funeral rights of the Fore, which consisted in part of eating the brain of the dead person. Although the West loves its “stone age” image of natives, in fact, this was a recent rite in the 1950s, when Gajdusek first started visiting the Fore. A fad, in other words, that had worked its way down from the north of the island.

Radioactivity and brain cannibalism –they form nice metaphorical crossroads in which to situation the long crisis of financialized capitalism.

To get back to the anecdote: while Chebyshev’s opening proposition was such that the tailors and seamstresses could simply ignore it and go back to what they are doing, the ‘text selection” that we, helpless populations all, are imprisoned in is not so simple. For, of course, our economists and policymakers are proposing exactly the same kind of radical simplification of the human being: the human being as a walking negative demand curve. Demand curves, of course, resist Shylock’s test of the human:

If you prick us, do we not bleed?
if you tickle us, do we not laugh? if you poison
us, do we not die? and if you wrong us, shall we not

Tickle, prick and poison your demand curve as much as you want, it will remain, stolidly, smudgily, there on your sheet of paper or your power point presentation. And certainly so far, the negative demand curves have not sought revenge: they’ve swallowed every insult, just as they were taught to, in the hope that health, education, retirement, a little porno, a small vacation, and a new car will still be there in the future, waving at them. As for the kids, well, what are you going to do? They might not make it in the new age of the Heat Earth anyway.

However, the words of the economic prophets from the very beginning have been, on the one hand, that the Zona for the little people had to be increased until they gave up all resistance and we reverted back to the good old days, pre-1929; and on the other hand, that the successful be advantaged as it is written in the scriptures, to he who has, it shall be given. Of course, Jesus’s idea of he who has was a bit different, what with the meek inheriting the earth, instead of Bill Gates and the merry band of billionaires that we watch buying American elections and such. But Jesus was merely another negative demand curve who got what was coming to him by not going retraining his human capital and moving out of the carpenter trade into, say, the exciting world of clerking at a convenience food store.

Speaking of Jesus, it was near his b-day, around Dec.25, 2008, when the Freakonomics blog, that veritable cornucopia of the Bush ideology, which labeled its contrarian instead of predatorian because the latter name is so icky, published a prophecy:

“John Lippert presents an interesting and extremely well-reported article on the financial crisis’s impact on the thinking of Chicago economists. It does a nice job of capturing the multifaceted nature of the institution, with people on all sides of the issues.
I absolutely love the following excerpt, which better captures what it is like to hang around with Chicago economists than just about any quote I have ever seen:
“We should have a recession,” [John] Cochrane said in November, speaking to students and investors in a conference room that looks out on Lake Michigan. “People who spend their lives pounding nails in Nevada need something else to do.”

Steven Levitt’s love of Cochrane’s sentence is the love that dares us to tell its name. Its name is not freakonomics – it is zonanomics. Levitt’s desire, here, is pretty simple from the psychoanalytic viewpoint, a matter of anal sadism that, in articulating itself, bars itself – the cruelty inflicted on “people who spend their lives pounding nails” is vicariously enjoyed, and the enjoyment is simultaneously denied –rather, we are talking about analytical rigour, here! But it turns out that Cochrane’s spirit has directed the entire policy response, from Obama to Merkel, to the Zona. The liberal version of it tries to double bar the enjoyment of hurting the 99 percent by snuggling up to the old idea that markets do self regulate, and government is an interfering bitch if it meddles in market’s mandate of heaven, but government can nudge a bit – and afterwards, it can cut the social insurance benefits for all, to the sound of trumpets and bond traders peeing in their pants with joy! The Merkel version is simpler: an undisguised hatred of the working class, and a desire to put the boot on their face until they surrender. The latter is more pure Cochrane, but the former basically takes Cochrane’s logic as a given.

Why? Because the crisis of the Zona, the real crisis that we keeps us leaping waterfalls, is that we have an economy that gives insane amounts of money to moneyshufflers, who operate in a system that does absolutely nothing productive. In order to keep that system going, we are going to have to throw more and more negative demand curves on the fire. And that is that.

“…if you wrong us, shall we not
revenge?” Shylock tried that route and didn’t get anywhere with it. Revenge is, after all, another turn of the wheel, another  case of anal sadism, another vicarious enjoyment of cruelty. But wheels do turn, no matter how we try to get off them. This is a total social fact. Cochrane’s logic is doing a good job of destroying Europe; it is bringing down the U.S. And it is creating conditions under which, for the first time since the thirties, the majority of the populations in the capitalist countries will experience capitalism hurting them instead of helping them. That doesn’t  have to go on too long before the cops aren’t enough.


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