# Indian’s Dilemma – Part 3

(Most of the content here on game theory is a direct copy-paste from wikipedia)

This may be one of the most difficult posts I made till now; not because I did’nt have any ideas, but because I find it incredibly difficult to express my thoughts in words; after all a man of few words is what I am.

In the last post I said Iterated Prisoner’s Dilemma ( IPD ) problem could explain many ( if not all ) of the reasons why we never played it right. In this post I will quickly narrate an example IPD type situation involving 4 agents: 2 are from India, and the other 2 from Weasel Land ( where they are really good at IPD games).

Assume that each player faces the other 3 in a match lasting 6 games. If one player gives evidence against a player who does not, the former gains 5 points and the latter nets zero. If both refrain from giving evidence, both gain 3 points. If both give evidence against each other, both gain 1 point.

When a weasel faces off against an Indian, the former refrains from giving evidence in the first game while the Indian does the opposite, gaining the Indian 5 points. In the remaining 5 games, both players give evidence against each other, netting 1 point each game. The final score is Indian, 10; Weasel, 5.

When Weasels face off against each other, each refrains from giving evidence in all 6 games. 6 x 3= 18 points for each Weasel.

When Indians face off, each gives evidence against the other in all 6 games. 6 x 1 = 6 points for both Indians.

The final score for each Weasel is 5 + 5 + 18 = 28 points. The final score for each Indian is 10 + 10 + 6 = 26 points. Despite the fact that the Weasels never won a match and Indians never lost a match, the Weasels still came out ahead, because the final score is not determined by the winner of matches, but the scorer of points. Simply put, the Weasels gained more points tying with each other than they lost to the Indians.

I hope you can see what I am trying to tell here: Envy, is the root of many problems we experience in our economy. Most of the games we play in our lives are not like chess ( which by the way is something Indians are really good at) ….that is, it is not necessary that whenever one person wins, other necessarily loses. In other words, the goal of most of the games in life is to maximize profits, NOT to profit more than your opponent.

To summarize, the reasons why India never played it right are:

1. Absence of “unenforced cooperation” ( cooperation that is evolved from extreme competition )
2. Involuntary Magical Thinking

## 8 thoughts on “Indian’s Dilemma – Part 3”

1. Aurorion says:

Hi Mr. Intellectual,

I think I am a bit too unintelligent to truly understand your wise and apparently esoteric observations. 🙂

But anyway, I think (both from your posts here and my greater interactions with you) that you underestimate your country a bit too much.

True, India may not be the greatest country in the world as judged from the common indicators like economic prosperity, or military might, or even your favourite field, science and technology. And, all the big hype of India being the next big thing in everything from IT to BT may be grossly overstated as well as superficial.

But, I don’t think that India is in such a bad position either, especially considering the fact that India was ruled by an imperialist aggressor till just about 59 years ago. True, there maybe other countries that have achieved far greater successes in shorter spans of time, but in my opinion, it is not always the best idea to compare anything with the greatest and the best in any field.

As an Indian citizen, I am not fully satisfied with the position my country is in now; but I do not think India is beyond repair.

I think what you feel is similar to what a lot of young Indians think about India now, and I don’t think such feelings are entirely without reason. However, in my opinion, such people miss the whole point altogether: that it is they themselves that make the country.

The present generation, mainly the middle class, do not vote, do not read the newspapers, do not do anything to change the situation that they hate, they don’t even like staying in the country. All that most young Indians want to do in the 21st century is to just get out of the country and settle in the USA, Europe, the old favourites like the Middle East, or the new favourite, Australia.

Why can’t these people stay in India and actually DO something instead of just complaining? Why do these people have their highly subsidised education in Indian government institutions and then use their education to go abroad and do productive work in USA and spend what they earn in the USA? IITs produce world-class graduates with the money of a billion people in India; and these graduates go the western heavens and get super-rich.

And their justification? That India is beyond repair.

India is not beyond repair. Nothing ever is.

2. Aurorion says:

By the way, why exactly did you go to Singapore? Why did you leave India where you had already secured a good yet inexpensive education and choose to undergo an expensive undergraduate course in an expensive country?

Was it because you hated the situation in India? Or because you hated the educational system in India? Or because you thought India was beyond repair and thought it was best to get out of India (as you have often advised me) as soon as possible?

I would like to think that it is because you thought you could achieve more with a better education you could obtain in Singapore. If that is the case, then you made the right decision, because I honestly believe that a person like you can be more productive in an educational environment (which I think exists) in Singapore.

If, in the future, you plan to get settled in some western country or in Singapore or anywhere outside India, then I hope it will be for a really good reason; not because you think India is beyond repair.

If you love your country, and if you truly want to do something to improve it, then there are a lot of things you can do. For one, you can actually live in India, do some productive work for some Indian company which spends its money in India and pays its taxes to the Indian government, not to a foreign country that uses that money to wage wars in the name of fictitious reasons (like non-existent WMDs, for example. Even if absence of proof is not the same as proof of absence). You can spend the money that you earn in India, paying that money to impoverished shopkeepers to buy Indian goods, and paying your taxes to the Indian government that will use at least a fraction of that to provide necessary vaccines to babies, who for no fault of theirs, happened to be born in poor Indian families. You can do some social work, run an orphanage or even provide any measure of moral, if not financial, support. You can take part in the local government, organizing and taking part in movements that fight for causes that you believe in. You can vote, help a good candidate elected to be a part of the government. You can even BE the candidate, if you have the ability and the courage and willingness.

But please do not think that you truly want to help India, but you can’t because it would be of no use.

3. Aurorion says:

Regarding your interpretation of the Prisoner’s Dilemma, I can’t decide whether you are glorifying capitalism or communism….

I think that capitalism will be definitely more successful than communism in any society, of humans or of any terrestrial organisms.

Simply because all humans, and even animals, are inherently selfish. No organism has ever been truly selfless in this world, and even if such an organism existed, then I am sure that it was a failure in its life. In my opinion, survival of the fittest requires organisms to be selfish; and those that are not selfish will get extinct sooner or later.

And, Communism depends on a certain degree of selflessness on the part of the people. And Capitalism thrives on selfishness. The more selfish people are, the more successful Capitalism will be and more unsuccessful will be Communism.

So, I think envy is something good in any human society, something that will do more good than harm in any non-Utopian society.

4. Manu says:

for _:
You have an interesting point, but I don’t think that is really the cause of India’s underdevelopment. I think, this theoretical problem is applicable to any individualistic society, especially the US. But the US economy and development has been particularly strong. Also this phenomenon isn’t exactly envy. Envy is when one chooses a decision to hurt another, on the other hand, here the Indians made their decision for individual gain. But I do concur that the envy phenomenon is particularly evident among keralites.

I think your post is a classic collectivist argument. In many cases, the gain from “altruism” is not as evident. Life isn’t exactly this game. Often, you don’t gain by co-operation. Ofcourse, when you have a 20-20 hindsight everything makes sense!

Here is my reason for why Indians have been subpar especially compared to countries such as Israel:
(1) Foreign Policy: India, upon independence aligned with Russia (the worst decision possible). Thus, they alienated the winner of the cold war, US. Until recently (<5 yrs) India was seen as an enemy in the US, than as an ally. This strained relationship with the US hurt India a lot. And it must be reversed at any cost.

Now you may raise the counterpoint Pakistan. But Pakistan was never really a friend of US; they were more the enemy of enemy. On the other hand Israel was a big ally of the US and they gain greatly from it.

(4) Feudal mindset of Indians
The remenence of the Caste system, poor education of the masses, and other factors created a feudal society in much of India, especially Rural North India, [well maybe except kerala]. The feudal lords rarely go questioned. The power of the caste system is quite astounding!

These are I think the most important points now some minor points:

(3) Bureaucracy and curroption
I don’t think I need to explain this. This maybe a residue of India’s love for Russia and byzantine style government.

(4) Laziness: Indians working out of the country work far more than Indians in India!

5. Manu says:

I forgot the biggest and most obvious problem: Closed Market

for sentinel:

I was amused by your thoughts! But I agree with you in some ways but disagree with you on others.

Agree
India is improving tremendously, probably due to the open market policy and improved relations with US.

India is also not in a terrible position. But still needs to improve.

Disagree
(1) Imperial Aggressors
I think Indians have caused more to their ruin than any European.I think my earlier point about feudal nature of Rural india accounts for this.

(2) Paying Indian government more taxes does not help improve Indian economy [It helps bulge the pockets of the corrupt politicians]. What would help is invest in developing the infrastructure of India by creating industries that can offer more jobs, that will reduce unemployment, thereby improving the conditions of the poor. Once corruption is down, sure, taxes will help aid the improvement of the impoverished.

(3) Human Resource is India’s greatest export. The credit for India’s growth should not be for the intellectuals or the politicians, etc. It is rather the hard labor of the expatriates in the Middle east. It is the money that they send home that has helped india. In fact, all of india’s expatriates in Middle east must return. Once they return they spend and invest their money in industries that create more jobs and …

(4) the intellectuals settled in the developed nations have tremendously improved the prestige of India. India was for a long time known simply as the land of the poorest. But now west realizes that India has a lot more to offer. So they come and invest in India. And investment is the key for economic development. Without the software engineers in the US, India would have never gotten any outsourced jobs. So a good service many indians can do, counter intuitively is to go to foreign nations and work

Surely you can’t expect 1 billion people to employed effectively. So as more people go out of the country, the better the opportunities for the rest.

Most expatriates still have families in India. And asia is well known for its close family ties. Now, as the standard of living for the NRIs improve, automatically, their families in India will start living better. Then their neighbors will improve their standard of living.

It is good to have more Mother Theresa’s but without economic investments, India cannot move forward. It will remain backward.
Essentially, social work is not enough to improve India. You can do more service to India by just working out of the country than by being a politician! Don’t get me wrong: being proactive helps, but don’t ever discount the services the expatriate indian community is doing!

Finally, Envy is not exactly the capitalistic attitude. Envy is more like: even if i don’t get better, he shouldn’t. Capitalism is more like: he’s getting better, so I must too.
Socialism ideally is: I am getting better, so i must help everyone get better. [Its ironic that that doesn’t happen!] Now there are essentially two theories in economics: man is inherently selfish, and man is not inherently selfish. The counterargument for the
claim that survival of the fittest must be selfish is provided by edwin on his 3 post on india!

I hope this was insightful! Sorry for making it long

6. Aurorion says:

Hi manu

I don’t have much time here, so I cannot be too long here.

First of all, I have heard so much about you from Edwin, and it’s a pleasure cyber meeting you 🙂

About your comments about India not aligning with the US, I am sure that aligning with the USA can do a lot of good for India. But in my opinion (as I am sure is the opinion of the majority of the people of the country, except the educated middle class and the rich) this would be bit like selling your soul to the devil because you could gain from it. India (and its major political parties like the Congress and the left) have traditionally been aligned with countries like Palestine and Iraq and even, as you said, Russia, and this is all not without reason. I personally dislike most of the foreign policies of the USA and its allies like Israel; and so do many of the people of India. And the USA makes things worse by electing the wrong presidents, by waging wars citing imaginary WMDs as the reason, and by acting as if they are the God’s agent on the earth.

I could go on and on about the USA’s policies; but what I mean is this: I don’t think India’s decision to align with the USSR after independence was based on selfish interests alone, I truly think that India did so largely because of principles. And I have to say, I think India chose the right horse to back, because I think USSR then and Russia now are certainly the lesser of the two evils.

Regarding your point about laziness, I don’t think I agree. I think Indians in India are as hard working as Indians abroad. But maybe not so in the public sector. Also, many people who go abroad are well-qualified people, and such people reached where they are only by hard work, so naturally they would be hard working…. So basically, I think your observation is more due to the fact that many hard working Indian people tend to want to go abroad. I don’t think being in India causes Indians to be less productive.

About your counter-point about Imperial Aggressors, I agree that India’s feudal mindset and social customs and educational backwardness and etc. etc. have all hurt India. In fact, it is all these that caused India to be a victim of colonialism…

About paying taxes, my point was not really to say that Indian government utilises the taxes and funds well. My point was that it is better for Indians to pay taxes to the Indian government, rather than foreign governments. Also, I think I would rather pay to fatten the pockets of corrupt Indian beaurocrats than to fund expensive wars in foreign countries.

“The credit for India’s growth should not be for the intellectuals or the politicians, etc. It is rather the hard labor of the expatriates in the Middle east” I think you overestimate the powers of the “Gulf” Indians. My father himself works in Kuwait, but I don’t think the credit for India’s growth should largely go to Indians in the middle east. All expatriates have helped India’s growth, be it the middle east, or the US, or the UK, but to say that they are THE people responsible for India’s growth would IMO really sound like just a bad slogan for Pravasi Bharatiya Divas.

By the way, I am not anti-expat. But I feel that IIT graduates and IISc fellows can all contribute to the country better if they used their education here.

Finally, about your statement on Socialism. I think what unfortunately happens is: I am not doing well, so I must pull my neighbours down, too.

7. nahiaz says:

Two sentences:

1. Trust the numbers.
2. Don’t trust the numbers.

Edwin, i’ve talked to you about this, and you do understand why. It’s very simple example from choosing a car to statistics. 🙂

But one thing to add from our previous conversation, even though we are living in an imperfect world, there are close-to-perfect examples of corporate and country governance. So it’s applicable (ie. game theory) in some places, but not all.

8. nahiaz says:

ok, i can’t sleep, so well, i have been thinking of the possibilities to use mathematics to find problems in a governance.

The truth is, it could also be used to prove any flaws (such as human corruption), by making sure it closely adheres to the results of a proven theory.

It contradicts what i’ve said before, but worth to think about. Meaning, it’s possible to apply it EVERYWHERE.

The two sentences i wrote before are still true though.

Quantitative thinking. 🙂