Shane Warne, Game Theory & Geopolitics
The choices the World will have to make & their effects.
Shane Warne once quipped that “Spin bowling is about making the batsman think that something special is going to happen when it isn’t.” Lawrence Booth so succinctly wrote yesterday after Warnie’s sad & untimely demise “a genius who one moment held the ball in the palm of his hand, and the next the entire game”. Warne was a versatile & skilful proponent of Game theory, which is not only omnipresent in cricket but in today’s geopolitical conflict of Russia — Ukraine and many other things under the Sun whenever & wherever decision making is required.
Game theory is nothing but a strategy by competitors for making optimum decisions, in which one player’s gain or loss is contingently dependent on the other player’s strategy. To apply this to a cricketing scenario, If Shane Warne were bowling to Brian Lara, as a batsman, Lara could do any of these 3 things as strategies:
- Attack
- Defend
- Leave the ball
As a counter-strategy, Warne could employ one of these strategies:
- Leg spin
- Googly
- Top spinner & a few other choices
These choices make the outcome uncertain, as Peter Bernstein said “true sense of uncertainty lies in the intentions of others”. Whenever we are in a situation where the outcome is dependent not only on our strategy but also on what the competitor does, we have to make a choice between the dominant strategy and the best strategy.
A dominant strategy is about playing your best response in all the situations, while the best strategy is the best response considering what you think your competitor will do. Like Warne, Putin has excelled at the art or science of Game Theory as well. Whether his actions can be termed at dominant strategy or best strategy, only time will tell as a clear outcome is yet unknown to us.
Churchill’s made a very famous remark about Russia during WW2: “It is a riddle wrapped in a mystery inside an enigma,” and Putin is an enigma within enigma driven by his notion of “national interests”. In his wonderful book called “Prisoners of Geography,” Tim Marshall wrote “The annexation of Crimea showed how Russia is prepared for military action to defend what it sees as its interests in what it calls its “near abroad.” The same is applicable to Russia’s recent actions in Ukraine.
Putin is a man of ideas driven by history who has always considered the disintegration of the USSR as a tragedy. Sensing the weakness in western leadership and their disclination in taking some meaningful steps to him, Putin is endeavouring to rebuild Russian Empire by citing the history of centuries back. In his recent speech, he even accused Ukraine of squandering the great inheritance left behind by USSR.
All this has some serious ramifications for the world we live in and we will also be forced to make many choices. Some of the things which are likely to get influenced greatly are:
- Energy & Commodities: A lot has already been written on the gas reliance of Europe on Russia. Many countries will now look at alternates of being energy secure. There will be renewed efforts on new explorations of Oil& Gas domestically. Elon Musk has already given a call to put efforts into increasing US production. Europe will certainly look at increasing the pace of research in the area of Hydrogen as a fuel. For India also, this is a wake-up call. We will see more efforts on adoptions of Electric Vehicles as well as Solar Power & hydrogen. Countries would want to hoard different commodities.
- Defence: Countries surrounded by neighbours with conflicts will become cognizant of fighting their battles on their own, rather than waiting for help from so-called allies. Defence budgets will see a jump, China for that matter just announced an increase of 7.1% for its defence budget. India will be forced to do so as well. A Silver lining is that the localisation of defence production will increase.
- Finance: The freezing of assets of the Russian Central Bank & the threat of Russia being excluded from SWIFT are likely to create a rift on Global Financial System. Many countries would want to look at alternatives of keeping their sovereign funds in USD along with Russia likely to move in China’s corner to use CIPS as an alternate of SWIFT. Gold will again gain some prominence as it can still be used as tender or barter in common usage, the same currently doesn't hold true for Cryptocurrencies for broad usage by common citizens.
- Trade: According to some reports, Russia will not return airplanes leased from European aircraft leasing companies. If it were to actually happen, the trust in the protection of property rights & enforceability of contracts will evaporate. It will not only impact Russia but other countries also as the terms of trade may become far more stringent. Various types of business insurances will become costlier for all.
- Technology: due to their own limitations, the conflicting countries shy away from getting militarily involved but this opens the realms of getting increasingly involved in Cyberwarfare on their own as well as thru surrogates. Like in “Star Wars”, clones were converted into Jedi Hunters, there will be state proxies on both sides who will create different forms of Cyberattacks. Colonial Pipeline in the US faced a cyberattack in 2021, Solarwinds had a similar experience in 2020. In the current conflict, a group hacked the Belarussian railroad to slow down the movement of Russian troops. The intensity & frequency of cyber attacks will increase only, and not only for countries involved in the conflict but for others also.
There are decades when nothing happens, and there are days when decades happen. We are currently witnessing such “Days”. More than 2 millennia ago, Marcus Aurelius had said “Everything we hear is an opinion, not a fact. Everything we see is a perspective, not the truth.”. The World will hear a lot of opinions & it will surely see many perspectives, and on basis of that many choices will be made. We will need to keep on readjusting according to those choices & their outcomes.
