paranoia and public illusion/private truth

[prozak at anus.com]

The "Prisoner's Dilemma"
This all creates what in Game Theory has been called the "Prisoner's 
Dilemma." The basic idea is that if you are a prisoner planning to 
escape with some fellow prisoners, you have the choice of being 
faithful to them and benefiting from their plan, or you can betray 
them and earn what may be a very considerable reward from the 
authorities. You also must consider that this choice will have 
occurred to the others, which means that you stand in danger of 
special retribution if you are betrayed first. This kind of problem 
can be abstracted into a little game. 

A,B B, Keep
Faith B, Betray 
A, Keep Faith 3,3 0,5 
A, Betray 5,0 1,1 
In the game all the players choose secretly whether to Keep Faith or 
Betray each other, and then points are scored when the choices are 
revealed. If two players (A & B) Keep Faith with each other, then 
moderate benefits are earned by both. If both players Betray each 
other, then there is a minimal benefit. But if one player can sucker 
the other into Keeping Faith while Betraying him, he earns the 
maximum benefit while the victim gets nothing. 

Game Theory was developed by the great mathematician John von Neumann 
(1903-1957) [3]. To von Neumann, the Prisoner's Dilemma was a paradox 
that all but destroyed what he hoped Game Theory would accomplish: 
there did not seem to be a strategy that would benefit both parties 
to the extent that they would not want to betray each other. Instead, 
it seems that the best strategy for a player is to continually devise 
a way to sucker an opponent into Keeping Faith while being Betrayed. 
A familiar example of this is the famous recurring piece in the comic 
strip "Peanuts," where Lucy over and over fools Charlie Brown into 
trying to kick the football she holds, even though every single time 
she pulls the ball away and he falls painfully on his back. The 
benefit for both them of getting the football kicked is obviously 
less than the benefit Lucy enjoys at Charlie Brown's humiliation. 
Lucy has a very large score, while Charlie Brown still has zero [4]. 

Public Choice theory gives rise to a serious Prisoner's Dilemma. The 
largest benefits with the least effort come from political rent-
seeking, and those who fail to participate in the political process 
will have their wealth drained way with no corresponding return. Even 
if it is obvious to all that not everyone can live off of the wealth 
of everyone else (1,1), and that the best mutually beneficial course 
is for everyone to give up political rent-seeking (3,3), [ it is 
obvious that the best course for each individual group is to get 
everyone else to give up rent-seeking while they alone covertly 
continue to collect their monopoly rents (5,0) ]. The fear that 
others will pursue such a strategy is easily sufficient motivation 
not to give up rent-seeking. No one, of course, blatantly advertises 
their rent-seeking in terms of their own self-interest. Instead, 
there are always high sounding, moralistic slogans and 
rationalizations, arguments that special benefits are necessary 
because of poverty, compassion, discrimination, racism, the 
environment, greedy insurance companies, greedy businessmen, etc. 
Whatever the arguments, the significant question to ask is whether 
they can be translated, as P.J. O'Rourke says, into "Give me a 
dollar." 

The solution to the dilemma is simple, but it does not sound like it 
will directly provide any obvious benefit: the Classic 19th century 
Liberal principles of (1) the Rule of Law, (2) the Sanctity of 
Private Property (including self-ownership), and (3) the Freedom of 
Contract. The Rule of Law, in its proper meaning, completely erases 
political rent-seeking by the limitation of the power of government; 
and the other principles are simply those that guarantee the growth 
of wealth through the economic distribution of goods in the free 
market. The Freedom of Contract is the most easily misunderstood, 
since it is the principle that any agreement which is not an 
agreement to commit a crime and results from mutual consent is valid. 
"Mutual consent" does not mean, however, that both parties have to 
particularly like their agreement. It is simply the one that, in the 
absence of other options, they would prefer over nothing. Not liking 
the options you may have is actually a powerful motive of political 
rent-seeking. 

One may ask, "What if we prefer to pursue our self-interest through 
political rent-seeking, with its self-serving moralistic rhetoric, 
rather than renouncing that for a Liberal economic order that can 
only benefit us much less directly?" Then we will have to face the 
consequences of the sequel to the Prisoner's Dilemma; for it turns 
out that there really are TWO Prisoner's Dilemmas, one for the short 
term and one for the long run. This circumstance emerged in 1980 when 
Robert Axelrod, a professor of political science at the University of 
Michigan, invited computer program entries for a computer 
"tournament" of a Prisoner's Dilemma game like the numerical one 
above. The tournament goes on for many turns, and one particular 
entry won easily, both the first time and later when Axelrod had 
published the results and asked for new entries to challenge the 
first winner. The champion entry was called "TIT FOR TAT" and was one 
of the simplest possible. It only contained two rules: (1) start with 
Keep Faith, and (2) do the next the turn what the opponent did on the 
last turn. Any entry willing to Keep Faith with TIT FOR TAT will 
consistently do well. Any entry trying to Betray TIT FOR TAT will not 
be able to betray it more once in a row, and a particularly 
treacherous entry will consistently be Betrayed itself, accumulating 
little. A consistently Faithful entry will do fine with TIT FOR TAT, 
but it will of course get wiped out by the treacherous entries, so 
its overall score will be lower. 

These results contain a stunning moral and political lesson. The two 
rules clearly can be 
translated into three traditional moral injunctions: (1) be honest 
(rule one), (2) an eye for an eye 
(rule two), and (3) forgive (rule two). We can say that the results 
demonstrate that the honest will 
prosper while thieves will not. Furthermore, we can say, with F.A. 
Hayek, that the Liberal 
capitalist economic order will surpass in prosperity and overwhelm 
any system based on theft or 
political rent-seeking. This can even explain why evolution by 
natural selection results in altruism 
and social cooperation, since the cooperative can ultimately do 
better than the uncooperative and 
be naturally selected. However, this still leaves the difference 
between the Prisoner's Dilemma as 
a matter one of turn and as a matter of many. Someone might think 
that the virtues that emerge over 
the long run are not relevant when making decisions about a unique 
case. Of course, when faced 
with betraying someone for the greatest gain, one does not know for 
sure that it is a unique case. 
Furthermore, someone who thinks that it is simply wrong to betray an 
agreement will not have to 
worry and plan about doing that, and will also be properly prepared 
for the long run. Part of the 
simplicity of TIT FOR TAT is that is relieves one of the necessity of 
constantly looking for the 
best way to betray the good faith of an associate. Instead, the 
problem is simplified, and a person 
can focus all their energy on the most productive forms of 
cooperation. Those who waste their time looking for a dishonest angle 
devote themselves to an enterprise that is essentially sterile. 
Without trust and cooperation no truly great enterprise can be 
undertaken, while the fruit of such enterprises is wealth beyond the 
dreams of narrow chiselers. 

http://www.friesian.com/rent.htm

-- 
Backup Rider of the Apocalypse
www.anus.com/metal/
DEATH AND BLACK METAL