Transcription
All right. So, let's think about this rationally, or from an economics perspective. All right. So again, number five, he's trying to maximize the game. So he's trying to sleep with all five women. Okay. The problem if he does that is these five know they're all being played, and they recognize that this guy is probably an idiot. So five, the best woman, is like, "You know what? There's not much of a difference between four and five, so I'll just go marry this guy, right?" So number four is gone. And number four is like, "You know what? Five is probably making a good decision, so I'll just go marry number three, right?" And then what happens now is that five, by trying to marry all the women, is stuck with the worst choice. Right? So that's kind of stupid for him. He's stuck with number one.
But guess what? If any of these guys try this crap, the same happens to him, where four is like, "You know what? I can't get five, but I'll try to get four and three together." And then three is like, "Screw you. I'm going to go and marry two." Four is going to marry three. Okay. Then he's stuck with one as well, or he's just alone. So if they try to individually maximize their outcome, they all get screwed in the end.
So the only way out of this is if they cooperate. Okay? And the best way to cooperate is basically, five is like, "You know what? Screw this. I'm not going to go after four or three. I'll just have my five." Okay. Right. Four is like, "Yeah, I'll just go marry four. No dating, no games. I'll just go marry four." And three marries three. Two marries two. And one marries one. Okay? And the world now is perfect. Everyone has a husband and a wife, and they can now just have children. The world is perfect. And this is actually the best strategy for all the players, right? We call this, in game theory, we call this the Nash equilibrium. Okay.
Okay, Nash equilibrium just means that you always reach a state in which all the players maximize their outcome. The Nash equilibrium. And so the world makes sense. Now, there's a problem with this, though. The problem is, in real life, no one does this. Okay? In real life, no one actually follows this rule. Natural living is just a theory we made up. But in real life, that's just not what happens. What happens in real life is we choose to be suicidal. Okay.
So, let me tell you about a game I played. So last year, I was teaching this class, and I asked the boys and I asked the girls, "Pretend you're now 30 years old, right? Your parents are pestering you to get married, and you've been on the dating market for 10 years. There's really no one that you think is perfect for you. You've just given up on love. Imagine that you want to get married now, and tell me, what is the minimum requirement you need in order to agree to marry someone else? Okay. What's a minimum?"
And then I have the boys and the girls write down their responses. The boys were pretty simple, right? "Well, you know, as long as she likes me, and as long as I can put my penis into her, I'm good." Okay. It's that simple. Okay. It really is. Guys are like, "Yeah, I'll settle for anything." That's the boys, right? Girls were different. Girls who were like, "Okay, if I don't love him, if I'm not even attracted to him, I need about a million dollars a month."
"Really?"
"Oh my god."
"Yep. I need about a million dollars."
"Last class."
"Last semester."
"Okay. All right."
So, this makes no sense, right? So, in theory, >> just >> in theory, we should follow Nash equilibrium. But in real life, what happens is this. All the girls want this one guy. Okay? And maybe number four. They'll settle for number four. But three, two, and one, they don't want. And we know because, just look at the world around you. Look at these billionaires, right? Like Elon Musk, how many wives does he have? How many children does he have? Right? All the women in the world, many, not all, but many, just want to marry actors like Brad Pitt, billionaires like Elon Musk, right? And three, two, and one, they what do they do? Well, they watch Netflix, they watch porn, they play video games. They've given up on life, okay? They're like, "We don't care." We call these people incels, right? Involuntary celibates, because basically they've given up on life, and life has given up on them. So this entire competition is between number five and four for all the women in the world. And this is again suicidal. This will lead to the death of humanity.
And the question now is, okay, why are we suicidal? And so let's look at game theory analysis, right? The players, the rules, and incentives. We know, we know who the players are. The players are doing stupid things. The rules, we know. Okay? But the incentives is something that we have to think about. Why are they behaving like this? And the answer is because they're not interested in sex or procreation. What they're interested in is status. Okay? That's the game they're playing. Status. I don't want to marry someone to have children. I want to marry someone so I can take a picture of her and post it on Instagram so I can get a lot of likes. I want to marry someone so I can walk with her in the mall and all the guys are jealous. I want to marry someone who I can brag about. Okay? It's a game about status, not a game about sex or procreation. Do you understand? They are not people are not being rational here. People are trying to maximize their status in life. And that's why everyone's behaving like this. Number five, she may be the ugliest woman in the world, but she's still like, "You know what? It's still my choice whether or not to have kids. And having kids is a pain in the ass. So, if I'm going to make the sacrifice, this guy better be good-looking, okay? Or this guy better be rich. Otherwise, why would I want to have kids?" Okay? So this is why people behave the way they do. If you think about it this way, what you recognize is that people are rational. But to understand why they're rational, you have to figure out what the game is. Okay?
But then this leads us to a question, which is, okay, well, clearly this is wrong, because if we behave like this throughout human history, we wouldn't be here today. Okay? How is it that we have this game today, and we're going to die, but we must have come from somewhere. We've been around for like a long time. So, how is it that humans have survived for so long doing these stupid things? And the answer is, the game changes over time according to the superstructure of society. Okay? The superstructure. The superstructure is what determines the nature of the game. Superstructure, just think about the big picture, right? How many people are there? Is somebody wealthy or poor? Are there enemies to this society? Okay? This is the superstructure, the big picture. Demographics, economics, culture, politics, religion. And these things together is what determines the nature of the game.
All right. So, let's look at three examples of superstructure. All right. Um, example one is, you have a low population society. Okay? Low population is like maybe 200 people, 200 people. Okay? A village, basically. They are poor and um, low technology. Low technology means they don't have access to clean water. They don't know what hygiene is. They don't understand what germs are. So it's very easy for a woman to die in childbirth. Okay? And um, low competition. Low competition just means that there are no competing villages against them. Okay? So that's one kind of superstructure, the early superstructure of human society. Okay?
Then you have maybe growing population. Okay? So we're talking about like maybe 10,000 people, 20,000 people. They are now growing in wealth, growing wealth. Um, they have some technology, meaning they have access to clean water, and they have high competition. Okay? Meaning that they're competing against different villages and societies around them. Okay? That's another superstructure.
And the third superstructure is overpopulation. Okay? Which is the world we live in today. Okay? Where in China, you have a billion people. That's a lot of people. Um, too much wealth. Okay? But with wealth, you have inequality, right? [clears throat] And then you have high technology. This high technology means that every woman who gives birth will not die, and every child born will live on. Okay? And then you have something called an equilibrium. Equilibrium just means that, yeah, there's competition, but they're not going to go to war against each other. The world is basically peaceful. Okay? And according to superstructure, the game is going to change.
So let's go back to the game. Okay? We have 10 people in a low population, poor society. Guess what? They're not going to date. What they're going to do is they might get married, but they're going to have sex with each other. Why? Because as a woman, the only way to ensure that your child survives is if all the men in the village want to protect and nurture the child. They will do that if they believe that the child could be theirs. Okay? So, the woman will maybe have a husband, but the woman will also choose to sleep with other men to disguise paternity. Does it make sense? So, there's no dating. There's just lots and lots of sex in order to maintain social cohesion. Okay?
Now, in a superstructure number two, there's no dating either. Why? Because this society is in competition with other societies, and they need to have as many children as possible. So, what the solution here is to have arranged marriages. Arranged marriages where you know who cares who you marry? Just have lots and lots of kids. Okay? There's no dating either. Just have lots and lots of kids. You marry who your parents tell you to marry. You marry someone that you know. You marry your childhood best friend. Who cares? Okay? But you marry someone. You have lots and lots of kids. Okay? That's superstructure number two.
Superstructure number three is the one we live in. And here you have a dating game, right? Because why? Because the odds of you obtaining status is really, really low. Okay? And the only way that you can change your status is by marrying up. And that's why you have a dating game. A dating game is an opportunity for you to find someone better than your social demographic circumstance can suggest. Okay? And that's why you have low, uh, decreasing fertility rate. Okay? Where over time, because of the dating game, society will collapse. Okay? Does that make sense?
All right. So now you're the government, and all around the world, women who are wealthy, well-educated are refusing to have children, especially in East Asia. Right now, the fertility rate in China is about one. Okay? About one. The replacement rate that you need is 2.1. So just to maintain your current population levels, every woman in China needs to give birth to at least two kids. But right now, on average, women are choosing to have one kid only in China. And the worst thing is that this trend is increasing. So five years ago, the fertility rate was maybe 1.7. Now it's one. Okay? So the trend is very, very negative. Okay?
So governments all around the world are trying to figure out what to do. How do you convince women to have more kids? And what we've discovered is it's impossible. We can pay you more money, like they do in South Korea. Guess what? It doesn't work because people don't want money. They want status. And status is a zero-sum game. Okay? Money is infinite. But status, power, is a zero-sum game. So when you have overpopulation, when you have too many people competing for too few status positions, you have decreasing fertility rates, and there's nothing you can do about it. The moment you give women choice, they choose to improve their lives by marrying someone better. Okay? Not all, but most. And so over time, what happens is your society collapses. If you look at history, the best indicator that a society is about to collapse is if the women who are wealthy and well-educated, if they refuse to have children. This is the same. This is what happened to the Romans who collapsed. This is what happened um to many empires. This is what's happening around the world today in America, in Britain, in Europe, in China. Okay? And this tells us that society is collapsing.
So, in other words, what this really is, okay, these superstructures, it tells us the life cycle of a civilization, right? So this is when you, when civilization is young, then it matures, it grows, and then it collapses. Okay? And if you look at history, all civilizations go through this process of birth, maturation, and then collapse. And there's no way around it. So the power of game theory is that just by studying one aspect, okay, if I just study this game, all right, I figure out who the players are, the rules, and the incentives, I can figure out what the superstructure of the civilization is. Okay? And then once I have these two, I can now figure out where it came from, and where it's going. Okay? That's what I want to teach you in this class. How to analyze a situation so you understand the players, the rules, and incentives, which will give you insight into the superstructure, so that you can figure out where it came from, and then you can also predict where it's going. All right. So, but you can also look at the superstructure and figure out what the game is being played. Okay? So, this is one example, but throughout the semester, we'll be doing many, many different examples of game theory. Is this clear so far? Are there any questions? Any comments? Any questions before I move on?
All right. All right. All right. So let's just look at some basic [clears throat] facts. Okay. All right. All right. This is a map of the world. Okay. As you can see. Okay. Oh, sorry. So the color scheme is this. The red is where the population, uh, the society has an above-replacement fertility rate. Okay? So above 2.1. If it's dark red, like here in the middle of Africa, it's six to seven or six above. Okay? And why is it that the case? Because Africa is in a situation where it's a growing society with middling tech. So a lot of people die, lots of competition. So to survive, families have to give birth to a lot of kids. Okay? They have no choice in the matter.
But then you move to the rest of the world. Okay? So this is, um, North America, Europe, and East Asia, the three wealthiest parts of the world. And guess what? The fertility rate is collapsing because now we've entered the endgame where it is overpopulation, too much wealth, so too much inequality. And so women are forced to pick the best possible mate or not have children at all. All right? And here the situation is very, very dire. North America and Europe are kind of okay. Why? Because of immigration. Because even though their women are not having children, they can choose to import people for their labor force. But East Asia is really, really screwed, guys. Okay? So just look at this region. Okay? So China is one, but the worst is North Korea. Sorry, South Korea. South Korea has the lowest population, uh, rate in, sorry, the lowest fertility rate in the world. They're at between 0.6 to 0.8. So they're probably gone in 50 years' time. It's so bad that when you go to South Korea, they have signs outside restaurants that say, "No dogs and no kids." They think that kids are a problem. Okay?
So you look at these areas again, they are poorer, so women are forced to have more children in order to survive. Okay? But you look at wealthy areas, well, they'll probably be gone in 100 years' time, and it's total, total collapse. The solution that governments are choosing right now is to import immigrants. Okay? Especially. So these are the trends right now, and it's causing a lot of disruption in society because, guess why, guys? People don't like outsiders. People don't like immigrants, but they don't have a choice in the matter because along with the fertility crisis is the aging crisis, where your population is getting older and older. Okay? So life, the world is not that simple. If you want to know who will rule the world in 100 years' time, just figure out which society, in which society do wealthy, educated women choose to have children, and then that society will rule the world. Okay? It's that simple, right? Well, unfortunately, if you do it that way, you get a really, really disturbing answer. Okay?
So this is per capita GDP. Okay? So how much people make. All right. So obviously, if you're zero, you're very poor, and um, if you move to over here, you're very wealthy. Okay? So the United States is the wealthiest side in the world. Right. Sure. We can understand that. Then this is the fertility rate, which tells us how many children women have on average. Okay? So again, 2.1 is replacement rate. Okay? 2.1 is replacement rate. So the United States is actually below replacement rate, but the United States doesn't really care because it can import immigrants. Okay? Um, China is probably around here somewhere. Okay? Um, Angola is up here, but it's poor.
So, what this map tells us is a country that is most likely to be dominant for the next 50 years is this country, Israel. Okay? It is the only wealthy, Western, high-tech society in which women choose to have more than two kids. Okay? This is what game theory teaches us. And yeah, I know there are people like, "Yeah, but Israel, it's um, it has 9 million people, and um, it's in the middle of a desert, and everyone hates Israel." I understand that. Thank you very much. Okay? I understand that. But if you just analyze how the game works, okay, if you just look at it objectively from a game theory perspective, you are forced to conclude that Israel right now has the major advantage over everyone else. Now, it is possible that societies will change the fertility rate as the world changes. Okay? But I'm saying that given the current state of things, Israel, their growth trajectory is very, very high.
But then the question then is, okay, why is it that Israel, they are different from everyone else? And the answer is because the world hates them. Okay? Because they think they are different from everyone else, and they must unite together to survive. So in Israel, fertility is status. Okay? If you are a woman and you give birth to a lot of kids, that means that you love Israel. That means that you are doing what you can in this war for survival. It means you are a patriot. Okay? Um, but this has to do with religion. So what the West has done is not only, um, has it created a dating game where women can choose to have kids, but the Western world has also given up on religion and embraced materialism. Right? So what is valued in our world in the West? It's not patriotism or love of family or religious duty. It's just how many Instagram followers you have. It's how many YouTube subscribers you have. It's how much money you have. Okay? That's all that matters. So given the current state of events, it's very hard for the Western world, and really for China, to survive for the next 50 years. Okay? And I know, like, well, China has a billion people. So even though, you know, we're only giving birth to 10 million kids a year, which will still be around for a long, long time. Okay? So at this rate, by 2100, China will be at a population of about 600 million. That's still a lot of people, man.
Um, okay, here's the problem, though. Okay. This is South Korea. Okay. Okay, South Korea is like the worst-case scenario. And for South Korea, this is actually the best-case scenario where, okay, given current trends, and let's just pretend that nothing bad happens for South Korea. Well, by the year 2100, you have a situation like this, where the vast majority of people are over 65, and you have no kids. Okay? That is a zombie society where no one works, and everyone just, I don't know, walks around the park every day. No one works. So the economy has collapsed. Okay?
So look at this trend where we are now in here. Okay? Where the majority, it's still a working population, which is good. You need that for the economy. But by the time you hit 2040, okay, you've got this huge dependency and a craving population. Do you guys see this? Where we are in, um, Okay. So we're at 2020, right? Okay. All right. So it's still not too bad. But by the time you hit 2040, look at this. Okay? Look at this. Where you have absolutely no kids, and then you have lots and lots of retirees. Okay? And then by the time you hit 60, oh my god, right? Your population, your working population has decreased by half, by 50%. All right? So if things stay the same, if nothing happens, South Korea will be dead in, I don't know, by 20150. Okay? Best-case scenario. But what we know from history is that society should not die naturally. Eventually, South Korea will be forced into wars, economic crisis. So this trend will just increase. And so, if North Korea gets past 2080, I'd be very surprised. Okay? I would be surprised by 2040, South Korea were to face collapse as a nation-state. Okay? Because you need these people to work. But guess what? You also need them to fight wars. So if North Korea ever threatens South Korea, most of your adult population would be dead. Okay? So South Korea cannot fight a war now. The prospects for South Korea is utterly hopeless. There's nothing South Korea can do about this because South Korea is an extremely materialistic society where the only way to get ahead is by making a lot of money. Okay? And if you're a middle-class person in South Korea, it makes no sense for you to have three kids. It makes sense for you to have one kid and put all your resources into this one kid in the hopes that he passes the college examination, gets into a good university, and then gets a good job at Samsung, which is the only company in South Korea. Okay? Samsung. Right. So, the situation is pretty dire in South Korea.