Is the economy a (fool’s) game?

When coordinated behavior takes place without a central authority or obliging regulation, we often attribute the coherent action to the existence of a functioning market economy. It is a world that some people say, resembles a game.

A game theory approach to the economy assumes that people choose the kind of behavior that gives them the greatest expected benefit over time, given their expectations about what the other players will do and the rewarding or punishing feedback they get as a result of their own actions. Economic players, for example now in Russia or in Greece, are thought to learn by trial and error, keeping strategies that work and altering the ones that turn out badly. Players observe each other and each others’ actions and responses. The expectation is that what has worked is likely to be used again. Game theorists claim that if you want to know the future, you should study the past.

In most games who wins and who loses is the whole point of playing. It would be hard to imagine a more unpopular outcome in the reality TV-series that today are watched by millions, than an announcement that all the players ended up as winners! It is, of course, beneficial that the place of the lazy, the incompetent, and the unmotivated is taken by those who are better motivated and more enterprising.

But there are growing problems. As our best intentions play into each other, patterns emerge that none of us really want.

Most games we play have been played under the postulation that you play against others and you win independently, without help from others. That is fair, but, in real life the unit of survival is the actor as an interdependent, not independent, part of the game being played. Following Darwinian rhetoric, the unit of survival is not a species but the species in its environment. In competitive games, and our society in general, there is an inbuilt lack of understanding of this interdependence.

This creates the world we live in. Have you ever asked why there are more losers than winners in our games and why the divide between winners and losers is growing constantly? The conundrum is that the winners end up having to take care of the losers. In the end, the winners have to pay the price of winning in one way or another. The bigger the divide is, the bigger the price that has to be paid. As losers are excluded one by one, as happens on the TV, they are excluded from the possibility of learning to win. Competitive social games then create shadow systems of losers competing at losing, the way it happens in jails and gangs. Human beings as a species are thoroughly social and interdependent. Because of this, totally different social cultures start to form, as is happening in big cities. Losers multiply as winning behaviors are replicated in the smaller winners’ circles and losing behaviors are replicated in the bigger losers’ circles.

We need a new relational approach that combines competing and collaborating. In games that were paradoxically competitive and collaborative at the same time, losers would not be eliminated from the game. In competitive/collaborative games the winners would be all those whose participation and contributions were incorporated. The players then have the responsibility not only for adhering to the existing rules, but also for developing the rules further — specifically when the game decays as a result of the actions of the players.

The criteria for success do not lie solely in winning but in the development and continuation of the game. Who wins and who loses is of minor importance compared to the decay of the (game) environment as a result of our outdated zero-sum thinking and winner-take-all philosophy.

Winning and losing are thoroughly social phenomena. We are our relations. We lose together but we can also win together. It is possible!

    Esko Kilpi

    Written by

    Everything that needs to be said has already been said. But, since no one was listening, everything must be said again. -André Gide

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