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America’s two-player Nash dynamics

Figure 1, Nash dynamics of the wealthy, powerful, and privileged, diagrams the macro-social ‘Prisoner’s Dilemma’ in American politics currently. In this two-player ‘Nash dynamics’ the state mutually most beneficial to both the ruling elite and populist middle class is the utopian alliance {P, E} (see Figure 1 below for key to letters). However, if the ruling elite were to fail to follow through in choosing P, then {E, E}, the alliance most favorable to the ruling elite and less favorable to the middle class, would follow. Similarly, if the middle class were to fail to follow through in choosing E, then {P, P}, the alliance most favorable to the middle class and less favorable to the ruling elite, would follow.

So that, in order to most assuredly work toward a state of the nation that is most favorable to their respective class, regardless of what the other class does, each class must choose the strategy favoring their own, which political disconnect between the ruling elite and populist middle class today has resulted in the real-world Nash equilibrium {E, P}; which unfortunately appears to be the only ‘state of the nation’ that is logically possible in America’s two-player metaeconomics. Given the real-world Nash equilibrium {E, P} in Figure 1 current today, neither player – elite or populist – can do better by unilaterally changing its strategy. The populist-favored alliance {P, P} and elitist-favored alliance {E, E} are different alliances of elites and populists having differing degrees of relative benefit for the two players involved. The utopian alliance {P, E} requires a degree of cooperation between the elite and middle class, based on mutually felt benevolence for each other, that will be difficult to engineer in America’s ultra-competitive society in which wealth, power, and privilege are all that count in the collective mind of the ruling elite.

Figure 1. Nash dynamics of the wealthy, powerful, and privileged 

Nash Dynamics of America’s Darwin metaeconomy: Corporate Ruling Elite v. Middle Class Populists Strategies of the populist middle class: the 99% and their economic, political, and social surrogates.
P E
Strategies of the ruling elite: society’s wealthiest 1% and their economic, political, and social surrogates. P Roosevelt’s New Deal: 1933-1980 Utopian enterprises that depend on corporate benevolence
E The political disconnect of the corporate elite from the ideal of a robust middle class and opportunity for all: 2009-? Reaganomics: 1981-2008
Strategy P: create legislation, implement policies, and carry out political agendas that ‘promote the general welfare’ of society’s populist middle class; including the economically dispossessed, politically disenfranchised, and socially disempowered of the 99%.

Strategy E: create legislation, implement policies, and carry out political agendas that promote the interests of the elite ruling class: society’s wealthiest 1%, aka the politicians’ so-called ‘job creators.’

Alliance {P, P}: the elite-populist compromise in which, for the purpose of achieving societal stability, priority is given to the general welfare.

Alliance {E, E}: the elite-populist compromise in which, after societal stability has been achieved, priority is given to elite special interests.

Equilibrium {E, P}: a political disconnect of the elite ruling class from the American ideal of a robust middle class and opportunity for all in which there is no alliance between the ruling elite and the middle class; the elitist politics of which has minimal regard for the welfare of the middle class, and the American populace generally.

Alliance {P, E}: an utopian political agreement, between the populist middle class and elite ruling class, in which each class supports the interests of not only its own, but benevolently that of the other class as well.

L. Frederick Zaman

  1. Paul Schächterle
    January 4, 2016 at 11:21 am

    To be honest, I find this “game theory” model rather incomprehensible. Also there are a lot of strange assumptions buried in this:

    Re: “{P,P}”
    Do you really think the elites of the 1930s were all for the New Deal? A lot of them fought it. Some of them even tried to overthrow Roosevelt in a fascist coup (https://en.wikipedia.org/wiki/Business_Plot) which was only prevented because Smedley Butler was not a traitor.

    Re: “{E,E}”
    Do you really think that a society can be stable if all priority is given to a tiny elite?
    What about mass unemployment and therefore mass incomelessness?
    What about the erosion of the tax base?
    How do you think all this (potential) productivity through modern technology can be used if it is not used to produce goods for the masses?

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