Persistent plus-sum play

Intro

The history of mankind can be perceived as an extended tutorial in plus-sum games, slowly learning the art of productive cooperation between individuals, groups, tribes and recently even nations. Successful play requires a moral foundation based on honesty and openness. The first commandment of any plus-sum game is:
“Thou shalt not cheat”.

 

The Spirit of the Game

Well-known zero-sum games, like poker, do not create value; the amount of money around the table is only changing hands but does not grow. In a zero-sum game, the main competitive weapon is deception or, at the very least, withholding information – ergo the proverbial poker face. In contrast, the decisive success factors for plus-sum play are honesty and openness, which creates and maintains the requisite trust between the parties.

A society exists in order to produce added value for its members through fruitful cooperation. The internal rules of the game should therefore promote value-enhancing plus-sum games and minimize futile zero-sum play. Destructive minus-sum games should be totally unacceptable. By defining these interrelations in mathematical terms, game theory becomes applicable and fundamental insights can be gained.

The perverse logic of evil permeates all minus-sum games and predestines a parasitic, self-punishing course. Evil has no future; left to itself it comes to an inglorious end. But neither can the plus-sum game be perfected without losing its inherent creativity. Perfectionism is not of this world; dishonesty and injustice, anxiety and ill fortune can be minimized but never abolished. All bodily infirmities may be eliminated in the future, but we can never get rid of our spiritual sufferings. Setbacks, privations and sorrows are unwelcome but mandatory.

The actual content of the plus-sum remains dependent on subjective evaluation, but a clear pattern emerges if we draw on universal human virtues and shortcomings. Zero-sum games provide the exemplar of nullity; the minus-sum means negation, waste and destruction. Only the plus-sum implies the generation of value, enhancing the level of the game, encouraging commitment, altruism, ethical thrust. The plus-sum game is an enunciation of agape, divine love, which seeks not its own but suffers and endures, believes and creates all things.

Society and culture

During human evolution, group productivity and efficiency − that is the capability to play plus-sum games − became an important competitive weapon and thus the subject of selection. Group selection through cultural competition brings moral capital to the fore. Furthermore, the added value per individual grows with an increase in group size. But so does the opportunity and temptation to cheat, which intensifies the quest for cooperative morals.

Vigorous cultures are based on cumulative plus-sum play, a kind of moral capitalism in which the profit stands in direct proportion to the spiritual investment in coalition-building. Particularly in its Protestant-Calvinist version, our Western culture is – or at least has been – molded by the idea of accumulation, based on the strength of the work ethic and individual responsibility.

When looking for universal causes for the miscarriage of ‘natural’ development the relative isolation stands out. Close contacts with other societies – near by or far away – increases the relevant population and expedites the plus-sum game. The exchange of goods, ideas, genes and beliefs enhances the richness of variety, intensifies competition and augments the cultural capital. Traditional policies and practices are opened up to falsification while economic and political entrepreneurship is invigorated.

Society cannot and should not guarantee absolute justice for its citizens, no more than their happiness or success. But we can try to alleviate obvious injustices without creating undue restrictions on the opportunities for personal self-realization. As customary in a democracy it is a matter of a reasonable compromise, a social-psychological plus-sum game. Freedom in all its aspects is the precious joint heritage which should be optimized.

Politics

On the surface, practical politics is all about zero-sum play but at bottom it is a very demanding plus-sum game. Honesty and openness are therefore highly rated. Linguistic usage reflects our understanding of the political game and its actors. Horse-trading is a zero-sum game where the parties usually extract a gain at the expense of the taxpayer. Statesmen are perceptive plus-sum players, whereas run of the mill politicians myopically look for temporary advantage. Democracies have a tendency to despise their politicians, but the truth is that parliaments and politicians faithfully reflect the moral level of the electorate. A democracy has the politicians it deserves.

A successful plus-sum game, not least a democracy, will always provide scope for free-riders who sponge off the loyal players. In a small community free-riders are easily identified and get short shrift. But when society and the state machinery grow, so does the temptation to cheat despite intensified public supervision. In an expanding society bureaucracy anyhow tends to proliferate, which open the gates for inefficiency and corruption. A far-flung, complex community cannot take on extensive social responsibilities without weakening its moral spine and thus its future prosperity.

The main task of government is to establish a safe and predictable frame for value–creating plus-sum games, providing adequate scope for free enterprise. To quote James Buchanan: “Government should lay down the rules but not interfere in the game”. Petty supervision spiced with envy and distrust erodes societal creativity. After all, the government participates, via the taxman, up to a level of 50% in every private company.

More than anything else, the European Union is a moral challenge, a measure of our moral capital, of our ability to play plus-sum games. Under conditions of unprecedented complexity, religions and values must be reconciled, language barriers surmounted, old enmities and prejudices overcome. A clutch of nationalities with century-old traditions of hostility and bad will are forced to agree among themselves and on their relations with the surrounding world.

We need a minimum of civic virtues, some sense of purpose, a grain of faith, hope and love to maintain the social coalition and sustain the plus-sum play. The market economy and democratic rule both economize on such ‘love’, which is always in short supply: “Man’s moral capacity makes democracy possible but also makes it indispensable” (Reinhold Niebuhr).

The market

By definition, every market transaction creates value. The goods or services rendered must be more valuable to the buyer than to the seller, otherwise there would be no deal. Added value is the driving force of commerce which thus constitutes a vast plus-sum game. But the division of the spoils is a zero-sum game which can give rise to time-consuming haggling, wasting part of the accrued added value.

The market discipline is an efficient stand-in for the frail morality of man, but its effectiveness depends on the official and unofficial system of rules. Ideally the norms should promote long-term, fruitful plus-sum play.

It should be obvious that a global economic plus-sum game offers the only opportunity for the developing countries to escape their vicious circle. From this point of view there is a globalization deficit, because the developed countries are breaking the rules by trade restrictions and subsidies. Losers can be found in all countries, loudly protesting when the free market robs them of their privileged positions. But the great majority of consumers benefit, even if they are mostly mute, and the process moves on with the indisputable logic of plus-sum play.

Business and management

Companies are vehicles of strictly planned economy navigating the perilous seas of the market economy. They extract efficiencies from a seamless internal plus-sum game, reducing uncertainty and eschewing the costs and delays of market transactions.

Business life has undeniable and unavoidable zero-sum aspects but it is, or at least it should be, mainly a plus-sum game, producing value for customers, employees, shareholders and the taxman. Consequently integrity and dependability become key elements of success.

Moral leadership is a key if not the key responsibility of top management. Integrity at the top provides a powerful example and creates the right atmosphere for a fruitful plus-sum game. Honest leaders attract honest people, fostering adherence to company values at all levels. Control, supervision and reporting can be slimmed down to the minimum. Hierarchical shackles are eliminated and self-organization is encouraged, ensuring high flexibility and motivation. At best, the virtuous circle of decentralization produces the necessary conditions for its implementation.