0:03 This semester we are going to analyze a
0:06 question together which is how do
0:10 societies behave? Why do we do what we
0:15 do? What motivates us? What drives us?
0:17 And there have been different theories
0:20 as to what drives human behavior. Okay.
0:24 So let's go over some theories.
0:26 The first theory
0:30 comes to us from
0:37 And the idea is that
0:40 we are all driven
0:43 in a war between good
0:45 and evil.
0:47 There's a good side to us and there is
0:50 an evil side to us. There's Satan and
0:55 there's God. and we are constantly in a battle
0:56 battle
0:59 in ourselves.
1:02 Okay? Do we move towards Satan or do we
1:06 move towards God? And that's the core of
1:09 human civilization. So religion is meant
1:13 to give us the strength to show us the
1:16 path towards goodness. Okay, that's one
1:22 theory. Another theory is comes to us
1:29 from biology. Okay. And the idea is sex.
1:33 We want to pass on our genes
1:35 forward because that's the point of our
1:38 existence. If we cannot have children,
1:42 we all die. So the point of existence is to
1:44 to
1:47 have children and have them pass on
1:52 their genes to others. Okay? And for
2:00 life is different because as a man, you
2:02 have a penis and all you have to do is
2:04 stick your penis into a woman and you're
2:07 good. Okay? That's all you have to do.
2:09 So you want to stick your penis in as
2:11 many women as possible and that's the
2:13 point of your existence.
2:15 But as a woman, your life is different
2:20 because it's hard to give birth. It
2:22 takes 9 months to incubate the child in
2:26 your womb and then p child birth is the
2:29 most painful experience anyone will have
2:32 ever experienced. And then the child
2:34 it'll take like 16 18 years to raise a
2:36 child to maturity. So it's a huge
2:39 investment on your part. So as a female,
2:42 you have to be very cautious,
2:45 very careful about who you marry or have
2:46 or or you or who you have sex with.
2:49 Okay? And so life is a struggle between
2:51 men who want to put their penis into
2:54 anything and women who want to be
2:57 careful about who they marry. Okay? So
3:00 that's the idea of biology. Then of
3:04 course you have the idea of race and culture
3:10 that the world it's a struggle between
3:13 these different races and cultures for
3:16 dominance and each race each culture has
3:18 their own characteristics.
3:21 Okay. So maybe the yellow rays it's
3:24 they're very clever but they're very
3:28 weak. And then the white race are brave
3:31 but kind of stupid. And the black people
3:33 like anyway anyway that's another
3:35 theory. I'm not saying it's correct. I'm
3:36 just saying it's a theory that people
3:46 right? And what they believe is that we
3:54 We want to make as much money as possible
3:57 possible
3:59 and that's what drives us. Okay, that's
4:03 pretty simple. And the last big theory
4:07 is the idea of liberalism
4:18 And here the theory is that history is a
4:22 progress towards enlightenment to
4:26 rationality to truth and to justice. So
4:29 the inevitability of history of human
4:31 development is towards paradise towards
4:34 heaven. And maybe you know we go off
4:38 track now and then but inevitably we
4:41 move towards God. Okay. And this comes
4:44 to us from the enlightenment. We call
4:47 this liberalism. Okay. So these are five
4:49 theories. There are others but these are
4:50 five theories that show you the
4:54 diversity, the variety of ideas out there.
4:56 there.
4:58 What I will do this semester is present
5:02 to you another theory which I call game theory.
5:05 >> [snorts]
5:08 >> And my argument to you is that game
5:13 theory is the best way to understand how
5:18 humans behave, what drives nations, what
5:22 drives societies, what drives humans.
5:24 Okay? So that's my that's my argument to
5:26 you this semester. So the entire
5:29 semester we will study game theory. All
5:32 right. So what is game theory? All
5:36 right. Game theory is very simple. The
5:40 idea is that there are three components
5:44 to a game. Just three aspects to a game.
5:55 Okay. Then there are the rules
5:58 or the constraints.
6:00 Um in mathematics we would call this the
6:04 boundary conditions. Okay, the limits to
6:07 the game. And the third aspect are the incentives.
6:14 Basically, how do you win this game?
6:16 What do you get from this game? My
6:20 argument to you this semester is that if
6:22 you study all three, okay? Figure out
6:24 who the if you figure out who the
6:26 players are, figure out what if you
6:28 understand the rules, you understand the
6:30 incentives, then you understand how the
6:34 game works and then therefore you can
6:38 predict how the game will turn out.
6:41 Okay, that's the skill that I want to
6:44 teach you this semester.
6:47 And what I want to show you or what I
6:51 promise you is that if you learn game
6:54 theory, there'll be three major benefits
6:57 to you as a student.
6:58 Again, you don't have to learn game
7:00 theory. You don't have you don't have to
7:03 come to class. But if you spend the
7:08 effort to learn game theory from me,
7:11 then three things will benefit you.
7:15 Okay. The first benefit
7:24 The point of education guys, it's not to
7:26 get good grades or get into university
7:29 or get a good job. What I believe is the
7:32 point of education is to make you into a
7:35 better person which means that you are a
7:38 much more thoughtful person who can
7:40 better analyze yourself in the world
7:42 around you. That allows you to make
7:44 better better decisions. This makes you
7:47 a much more curious, much more moral and
7:51 much more imaginative person. Okay. So
7:53 one benefit of learning game theory is
7:55 you become smarter and therefore you
7:58 become a better person.
8:02 Okay, that's number one.
8:04 Number two is
8:07 you'll be able to understand
8:10 the world
8:14 that we live in because this world is
8:17 kind of stupid. Okay, so you may have
8:19 heard that Donald Trump
8:21 um and the American military went into
8:23 Venezuela for no real for no good
8:26 reason, kidnapped a president of
8:28 Venezuela, which is against which is
8:30 against international law and then
8:32 brought him back to New York City where
8:34 he will stand trial. It's really stupid
8:38 what happened. But then, but our class,
8:41 it's not meant to say this is stupid or
8:43 this is wrong because we all know it's
8:44 stupid and wrong. We're trying to figure
8:48 out why this happened and what this will
8:52 lead to. And so we will be in this class
8:55 studying and analyzing current events to
8:58 understand how the world really works,
9:00 why people behave the way they they do,
9:03 and understand how the game of the world
9:07 works. And this requires you to actually
9:09 follow the news. Okay? It's not hard to
9:12 spend five minutes and just read up on
9:14 the news, but we'll be looking at the
9:16 the war in Ukraine. We'll be looking at
9:19 a new war between Israel and Iran. We'll
9:20 be looking at what's happening in South
9:22 America. We'll be looking at the
9:25 conflict between China and Japan. We'll
9:27 be looking at the relationship between
9:29 United States and China. Okay? So this
9:33 is relevant to your lives because you'll
9:36 be you will eventually have to work and
9:38 live in this really screwed up world
9:41 that we live in. Okay.
9:43 And the third benefit is
9:50 once you understand the game you will
9:53 have predictive powers. You'll be able
9:56 to understand how the world will
9:58 develop. You'll be able to analyze your
10:01 own life and understand how you will
10:06 develop and that gives you control,
10:10 sovereignty over your own destiny.
10:12 Okay, that's my promise to you. If you
10:15 actually spend the time to listen
10:17 carefully in class, to participate
10:20 fully, to follow the news, uh, and you
10:23 spend the entire semester doing so, then
10:26 these three benefits will start to acrue
10:29 in you. Okay, this is a lifelong
10:31 struggle to learn game theory. I'm a lot
10:33 older than you are. I have a lot more
10:36 experience than you. Okay, but I want to
10:39 show you how to look at the world
10:42 through game theory. Another phrase that
10:46 you you learn in school is I'm going to
10:48 teach you how to think critically about
10:50 the world or I'll just teach you how to
10:53 think. Okay.
10:57 All right. Are we clear? Any questions
11:01 before I move on? All right. So, this is
11:03 all very abstract. And so, what what I'm
11:05 going to do now is I'm going to use an
11:09 example of a game to show you how game
11:12 theory works. Okay. All right. So, let's
11:14 let's use a really simple game. Okay.
11:17 Let's imagine there are five boys and
11:19 five girls
11:23 and they want to get married. Okay. So,
11:25 these are the players
11:27 and what we're going to do is we're
11:30 going to divide up them up into male and female.
11:32 female.
11:33 Then what we're going to do is we will rank
11:35 rank
11:38 the males and the females. Okay? Okay.
11:40 So, we're going to rank 10 players and
11:43 to five 4
11:53 3 2 1 5 4 3 2 1. Okay. And so, how do we
11:55 rank them? Well, we rank them according
11:58 to their attractiveness using three
12:02 criteria. Uh the first is genes,
12:06 the second is wealth
12:10 and the third is status.
12:12 Okay. So genes is very simple. It means
12:14 that you're good-looking.
12:17 It means you're tall. It means you're
12:18 healthy. You you will live a long time.
12:21 Okay. Genes is pretty simple to
12:24 understand. Wealth just means that you
12:26 or your family have a lot of money.
12:28 Status means that you have a lot of
12:32 friends, you have a high status job,
12:34 you come from a really
12:37 powerful family. Okay, so these are the
12:40 three criteria that we can use to judge
12:43 a person's attractiveness. And then what
12:47 we can do is rank them from five to one.
12:51 Five means really the best, one means
12:56 the worst. Okay? And we can rank all 10
13:00 according to these metrics.
13:04 So according to biology, what we call
13:06 evolution biology or ev evolution psychology,
13:08 psychology,
13:11 we're always trying to find the best
13:14 genes to procreate because this ensures
13:19 that our genes pass on. Okay. So um
13:22 remember that men have a penis which
13:25 they can stick into anything. Women have
13:27 to give birth. So the strategies are
13:30 different. Okay. So basically five
13:32 number five is trying to have sex with all
13:34 all
13:39 five women. Right? That's his strategy. Um
13:42 Um
13:45 but fear one number five wants to ensure
13:50 that she only gets five. Okay. So these
13:53 are different strategies. And
13:55 And
13:58 if this according to evidence psychology
14:02 all five of these females should try to procreate
14:03 procreate
14:07 with number five. Okay. But we know you
14:10 can't do this. and suicidal.
14:13 Why is it suicidal? Because
14:14 the human rights couldn't survive,
14:17 right? It'd be idiotic to do something
14:20 like this where all five women are just
14:22 trying to marry this one guy and maybe
14:24 him. Okay? But these three are
14:27 eliminated because then your society
14:29 would collapse. You wouldn't you can
14:32 have that many children. So this can't
14:34 possibly be true, right?
14:38 So let's figure out what rationally what
14:45 All right. So let's think about this
14:47 rationally [snorts]
14:49 or from an e economics perspective. All
14:53 right. So again number five,
14:57 he's trying to maximize the game. So
14:59 he's trying to sleep with all five
15:01 women. Okay.
15:05 The problem if he does that is these
15:08 five know they're all being played and
15:10 they recognize that this guy is probably
15:14 an So five
15:16 the best woman is like you know what
15:18 there's not much of difference between
15:20 four and five so I'll just go marry this
15:23 guy right? So number four is gone and
15:27 number four is like you know what
15:29 five is probably making a good decision
15:32 so I'll just go marry number three right
15:36 and then what happens now is that five
15:39 by trying to
15:42 marry all the women is stuck with the
15:44 worst choice. Right?
15:46 Right?
15:47 So that's kind of stupid for him. He's
15:50 stuck with number one. But guess what?
15:53 If any of these guys try this crap, the
15:55 same thing happens to him. Where four is
15:58 like, you know what? I I can't get five,
16:00 but I'll but I'll try to get four and
16:01 three together. And then three is like,
16:04 screw you. I'm I'm going to go and marry
16:05 two. Four is going to marry three. Okay.
16:08 Then he's stuck with one as well. Or
16:10 he's just alone.
16:14 So if they try to individually
16:16 maximize their outcome, they all get
16:18 screwed in the end. So the only way out
16:22 out of this is if they cooperate. Okay?
16:23 And the best way to cooperate is
16:26 basically five is like, you know what?
16:28 Screw this. I'm not going to go after
16:30 four or three. I'll just I'll just have
16:37 Right. Four is like, yeah, I'll just go
16:41 marry four. No dating, no games. I'll
16:44 just go marry four. And three marries
16:47 three. Two marries two. and one marries
16:50 one. Okay. And the world now is perfect.
16:53 Everyone has a husband and a wife and
16:55 they can now just have children and the
16:57 world is perfect. And this is actually
17:01 the best strategy for all the players,
17:04 right? We call this the wording game
17:06 theory we call we use for this is called
17:16 Okay. Nash equilibrium just means that
17:19 you always reach a state in which all
17:22 the players maximize their outcome, the
17:25 Nash equilibrium.
17:28 And so the world makes sense. Now
17:31 there's a problem with this though. The
17:35 problem is in real life no one does
17:41 this. Okay? In real life no one actually
17:44 follows this rule. Natural living is
17:47 just a theory we made up. But in real
17:50 life, that's just not what happens. What
17:55 happens in real life is we choose to be suicidal.
17:58 suicidal. Okay.
18:11 So, let me tell you about a game I
18:13 played. So last year I was teaching this
18:15 class and I asked the boys and I asked
18:17 the girls. Pretend you're now 30 years
18:20 old, right? Your parents are pestering
18:23 you to get married and you've been on
18:25 the dating market for 10 years. There's
18:27 really no one that you think is perfect
18:29 for you. You've just you you've have
18:34 basically give up on love. Imagine
18:36 that you want to get married now and
18:41 tell me what is the minimum requirement
18:45 you need in order to agree to marry
18:47 someone else. Okay. What's the minimum?
18:49 Okay. And then I have the boys and the
18:53 girls write down response. The boys were
18:55 pretty simple, right? Well, you know, as
18:59 long as she likes me and as long as I
19:02 can put her my penis into her, I'm good.
19:04 Okay, it's that simple. Okay, it really
19:08 is. Guys are like, "Yeah, I'll settle
19:10 for anything.
19:12 That's the That's the boys, right?"
19:15 Girls were different. girls who were
19:17 like, "Okay,
19:20 if I don't love him, if I'm not even
19:23 attracted to him, I need about a million
19:26 dollars a month." >> Really?
19:26 >> Really?
19:27 >> Oh my god.
19:29 >> Yeah. I need about a million dollars.
19:30 >> Last class.
19:33 >> Last semester. Okay. All right. So, [laughter]
19:34 [laughter]
19:38 this makes no sense, right? So, in theory,
19:40 theory,
19:42 >> in theory, we should follow Nash
19:45 equilibrium. But in real life, what
19:49 happens is this. All the girls want this
19:52 one guy.
19:54 Okay? And maybe number four. Look at
19:56 them for number four. But 321 they don't
20:00 want. And we know because just look at
20:02 the world around you. Look at these
20:04 billionaires, right? Like Ellen Mus, how
20:06 many wives does does he have?
20:09 >> How many children does he have? Right?
20:11 All the women in the world, many, not
20:15 all, but many just want to marry actors
20:17 like Brad Pitt,
20:20 billionaires like Ellen Musk, right?
20:22 right?
20:25 And 3, two, and one,
20:27 they what do they do? Well, they watch
20:29 Netflix, they watch porn, they play
20:30 video games. They've given up on life,
20:32 okay? They're like, "We don't care." We
20:36 call these people incels, right?
20:38 involuntary celibates because basically
20:40 they have given up on life and life has
20:43 given up on them. So this entire
20:45 competition is between number five and
20:49 four for all the women in the world. And
20:52 this is again suicidal. This will lead
20:56 to the death of humanity.
21:00 And the question now is okay why are we suicidal?
21:07 And so let's look at game three
21:10 analysis, right? The players, the rules,
21:12 and incentives. We know we know what the
21:13 players are. The players are doing
21:17 stupid things. The rules, we know, okay,
21:19 but incentives
21:21 is something that we have to think
21:23 about. Why are they behaving like this?
21:26 And the answer is because they're not
21:30 interested in sex or procaration. What
21:35 they're interested in is status.
21:37 Okay, that's the game they're playing. Status.
21:39 Status.
21:42 I don't want to marry someone to have
21:44 children. I want to marry someone so I
21:46 can take a picture of her and post it on
21:48 Instagram so I can get a lot of likes.
21:51 Oh my god. I want to marry someone so I
21:52 can walk with her in the mall and all
21:55 the guys are jealous. I want to marry
21:57 someone who I can brag about.
22:01 Okay. It's it's a game about status, not
22:04 a game about sex or procreation. Do you
22:05 understand? They are not people are not
22:08 being rational here. People are trying
22:11 to maximize their status in life. And
22:13 that's why everyone's behaving like
22:16 this. Number
22:18 she may be the ugest woman in the world,
22:19 but she's still like, you know what?
22:21 It's still my choice where not to have
22:22 kids. And having kids is a pain in the
22:25 ass. So, if I'm if I'm going to make the
22:27 sacrifice, this guy better be
22:29 good-looking, okay? Or this guy better
22:33 be rich. Otherwise, why would I want to
22:37 have kids? Okay,
22:40 so this is why people behave the way
22:42 they do. If you think about this way,
22:45 what you recognize is that people are rational.
22:47 rational.
22:49 But to understand why they're rational,
22:53 you have to figure out what the game is. Okay.
22:59 But then this leads to us to a question
23:01 which is okay. Well, clearly this is
23:03 wrong because if we behave like this
23:05 throughout human history, we wouldn't be
23:07 here today.
23:10 Okay, how is it that we have this game
23:13 today and we're going to die, but we
23:15 must have come from somewhere. We've
23:17 been around for like a long time. So,
23:19 how is it that humans have survived for
23:22 so long doing these stupid things? And
23:25 the answer is basic game changes over
23:28 time according to the superructure of
23:41 the superructure is what determines the
23:42 nature of the game. Superructure just
23:45 think about the big picture, right? How
23:49 many people are there? Is somebody
23:52 wealthy or poor? Are there enemies to
23:54 this society? Okay, this is the
23:56 superructure, the big picture,
23:58 demographics, economics, culture,
24:01 politics, religion. And these things
24:04 together is what determines the nature
24:08 of the game. All right. So, let's look
24:16 All right.
24:19 Um example one is you have a low
24:22 population society. Okay, low population
24:24 is like maybe 200 people, 200 people.
24:27 Okay, a village basically
24:30 they are poor
24:35 and um low technology. Low technologies
24:37 means they don't have access to clean
24:40 water. They don't know what hygiene is.
24:42 They don't understand what germs are. So
24:44 it's very easy for a woman to die in childbirth.
24:46 childbirth.
24:51 Okay. And um low competition.
24:54 Low competition just means that
24:56 there are no competing villages against
24:58 them. Okay. So that's one kind of
25:00 superructure, the early superructure of
25:04 human society. Okay. Then you have maybe
25:06 growing population.
25:08 Okay. So we're talking about like maybe
25:11 10,000 people, 20,000 people. They are
25:16 now growing in wealth, growing wealth.
25:19 Um, they have some technology meaning
25:22 they have access to clean water and they
25:25 have high competition. Okay, meaning
25:26 that they're competing against different
25:28 villages and societies around them.
25:30 Okay, that's another superructure. And
25:32 the third superructure is overpopulation.
25:35 overpopulation.
25:36 Okay, which is the world we live in
25:38 today. Okay, where in China you have a
25:41 billion people. That's a lot of people. Um,
25:43 Um,
25:48 Okay. But with wealth, you have
25:50 inequality, right?
25:52 And then you have high technology. This
25:54 high technology means that every woman
25:57 who gives birth will not die and every
26:00 child born will live on will live. Okay?
26:02 And then you have something called an
26:05 equilibrium. Equilibrium just means that
26:07 yeah, there's competition, but they're
26:08 not going to go to war against each
26:11 other. The world is basically peaceful.
26:15 Okay. And according to super structure,
26:18 the game is going to change. So let's go
26:21 back to the game. Okay. We have
26:24 10 people
26:27 in a low population, poor society. Guess
26:29 what? They're not going to date. What
26:31 they're going to do is they might get
26:32 married, but they're going to have sex
26:34 with each other.
26:37 Why? Because as a woman, the only way to
26:40 ensure that your child survives is if
26:43 all the men in the village
26:47 want to protect and nurture the child.
26:49 They will do that if they believe that
26:53 the child could be theirs. Okay? So the
26:56 woman will maybe have a husband, but the
26:57 woman will also choose to sleep with
27:01 other men to disguise paternity.
27:03 Doesn't make sense. So there's no
27:04 dating. There's just lots and lots of
27:07 sex in order to maintain social
27:11 cohesion. Okay. Now, in a superructure
27:17 there's no dating either. Why? Because
27:19 this society is in competition with
27:20 other societies and they need to have as
27:23 many children as possible. So, what the
27:25 the solution here is to arrange marriages.
27:27 marriages.
27:29 arrange marriages where
27:31 where
27:33 you know who cares who you marry? Just
27:35 have lots and lots of kids. Okay,
27:36 there's no dating either. Just have lots
27:38 and lots of kids. You marry who your
27:39 parents tell you to marry. You marry
27:41 someone that you know. You marry your
27:43 childhood best friend. Who cares? Okay,
27:44 but you marry someone. You have lots and
27:46 lots of kids. Okay, that's super
27:49 structure number two. Superst number
27:51 three is the one we live in. And here
27:54 you have a dating game, right? Because why?
27:56 why?
28:00 because the odds of you obtaining status
28:03 is really really low. Okay? And the only
28:06 way that you can change your status is
28:10 by marrying up. [clears throat]
28:12 And that's why you have a dating game. A
28:14 dating game is opportunity for you to
28:16 find someone better than your social
28:21 demographic circumstance can suggest.
28:27 Okay? And that's why you have low uh decreasing
28:29 decreasing
28:35 Okay. Where over time because of the
28:38 dating game
28:41 society will collapse.
28:44 Okay. Does that make sense?
28:46 All right.
28:49 So now you're the government and all
28:53 around the world women who are wealthy,
28:56 well educated are refusing to have
29:00 children, especially in East Asia. Right
29:02 now the fertility rate in China is about one.
29:04 one.
29:06 Okay, about one. The replacement rate
29:09 that you need is a 2.1. So just to
29:12 maintain your current population levels,
29:14 every woman in China needs to give birth
29:19 to at least two kids. But right now on
29:21 average, women are choosing to have one
29:24 kid only in China. And the worst thing
29:29 is that this trend is increasing. So 5
29:31 years ago, the fertility rate was maybe 1.7.
29:32 1.7.
29:37 Now it's one. Okay. So the trend is very
29:41 very negative. Okay. So governments all
29:43 around the world are trying to figure
29:51 out what to do. How do you convince
29:55 women to have more kids?
29:58 And what we've discovered is
30:00 it's impossible.
30:02 We can pay you more money like they do
30:04 in South Korea. Guess what? It doesn't
30:06 work because people don't want money.
30:08 They want status. And status is a zero-
30:12 sum game. Okay? Money is infinite. But
30:16 status power is a zero sum game. So when
30:18 you have overpopulation, when you have
30:19 too many people competing for two
30:22 status, too few status positions, you
30:24 have decreasing
30:26 fertility rates and there's nothing you
30:29 can do about it. The moment you give
30:33 women choice, they choose to improve
30:38 their lives by marrying someone better.
30:41 Okay? Not all but most. And so over
30:43 time, what happens is your society
30:46 collapses. If you look at history, the
30:49 best indicator that a society is about
30:51 to collapse is if the woman who are
30:53 wealthy and well educated, if they
30:54 refuse to have children. This is the
30:56 same. This is what happened to the
30:58 Romans who collapsed. This is what
31:01 happened um to many empires. This is
31:02 what's happening around the world today
31:05 in America, in Britain, in Europe, in
31:07 China. Okay? And this tells us that
31:11 society is collapsing. So in other words,
31:12 words,
31:16 what this really is, okay, these superructures,
31:17 superructures,
31:21 it tells us the life cycle of a civilization,
31:23 civilization, right?
31:25 right?
31:28 So this is when you when civilization is
31:32 young then it mature it grows
31:40 Okay.
31:42 And if you look at history all
31:46 civilizations go through this process of birth
31:48 birth
31:51 maturation and then collapse.
31:54 and there's no way around it. So the
31:57 power of game theory is that just by
31:59 studying one aspect, okay, if I just
32:02 study this game, all right, I figure out
32:04 who the players are, the rules and the
32:05 incentives, I can figure out what the
32:08 super structure
32:10 of the civilization is. Okay, and then
32:13 once I have these two, I can now figure
32:17 out where it came from and where it's going.
32:18 going. Okay,
32:25 that's what I want to teach you in this
32:29 class. How to analyze a situation so you
32:31 understand the players, the rules and
32:32 incentives which will give you insight
32:34 into the superructure
32:36 so that you can figure out where it came
32:38 from and then you can also predict where
32:41 it's going. All right.
32:43 All right.
32:44 So, but you can also look at the
32:46 superructure and figure out what the
32:53 Okay. So, this is one example, but but
32:54 throughout the semester, we'll be doing
32:57 many many different examples of game
33:01 theory. Is this clear so far?
33:04 Are there any questions?
33:05 Any comments? Any questions before I
33:08 move on? All right.
33:15 All right.
33:17 All right. So let's just look at some basic
33:19 basic
33:27 All right. All right. This is a map of
33:30 the world. Okay.
33:34 As you can see. Okay. Oh, sorry. So the
33:38 color scheme is this. The red is where
33:40 the population
33:42 uh the society has an above replacement
33:45 fertility rate. Okay. So above 2.1. If
33:47 it's dark red like here in the middle of
33:50 Africa, it's six to seven or six above.
33:52 Okay? And why why is it that the case?
33:54 Because Africa is in a situation where
33:57 it is a growing society with middling
33:59 tech. So a lot of people die, lots of
34:02 competition. So to survive, families
34:04 have to give birth to a lot of kids.
34:06 Okay? They have no choice in the matter.
34:08 But then you move to the rest of the
34:10 world. Okay? So this is um North
34:13 America, Europe, and East Asia. the
34:15 three wealthiest parts of the world. And
34:17 guess what? The fertility rate is
34:19 collapsing because now we've entered the
34:23 endgame where it is overpopulation, too
34:25 much wealth, so too much inequality. And
34:27 so women are forced to pick the best
34:29 possible mate or not have children at
34:32 all. All right? And here the situation
34:35 is very very dire. North America and
34:37 Europe are kind of okay. Why? Because
34:40 immigration. because even though their
34:42 women are not having children, they can
34:44 choose to import
34:48 people for their labor force.
34:53 But East Asia is really really screwed
35:02 Okay, so China is one but the worst is
35:05 North Korea. Sorry, South Korea. South
35:08 Korea has the lowest population
35:10 uh rate in sorry the lowest fertility
35:12 rate in the world. They're at between
35:16 0.6 to 0.8. So they're probably gone in
35:18 50 years time. It's so bad that when you
35:20 go to South Korea, they have signs
35:23 outside restaurants that says no dogs
35:26 and no kids. They think that kids are a
35:31 problem. Okay. So you look at the these
35:36 areas again they are poorer so women are
35:38 forced to have more children in order to
35:41 survive. Okay. But you look at wealthy
35:44 areas well they'll probably be gone in
35:46 100 years time.
35:50 Okay. You it's total total collapse.
35:52 The solution the governments are
35:56 choosing right now is to import immigrants.
35:58 immigrants.
36:01 Okay? Especi So these are the trends
36:03 right now and it's causing a lot of
36:05 disruption in society because guess why
36:08 guys people don't like outsiders people
36:10 don't like immigrants but they don't
36:12 have a choice of matter because along
36:16 with the fertility crisis is the aging
36:19 crisis where your population is getting
36:24 older and older. Okay. So life the world
36:26 is not that simple. If you want to know
36:28 who will rule the world in 100 year
36:30 time, 100 years time, just figure out
36:33 which society in which society do
36:36 wealthy educated women choose to have
36:38 children and then that society will rule
36:40 the world. Okay, it's that simple,
36:43 right? [snorts] Well, unfortunately, if
36:47 you do it that way, you get a really
36:51 really disturbing answer. Okay. So this is
36:52 is
36:56 per capita G uh GDP. Okay. So how much
36:59 people people make. All right. So
37:01 obviously if you're zero you're very
37:05 poor and um if you move to over here
37:06 you're very wealthy. Okay. So United
37:08 States is the wealthiest society in the
37:11 world. Right? Sure we can understand
37:14 that. Then this is the fertility rate
37:18 which tells us how many children women
37:23 have on average. Okay, so again 2.1
37:25 is replacement rate. Okay, 2.1 is
37:26 replacement rate. So United States is
37:28 actually below replacement rate, but the
37:29 United States doesn't really care
37:32 because it can import immigrants. Okay,
37:36 um China is probably around here
37:39 somewhere somewhere. Okay.
37:43 Um, Angola is up here, but it's poor.
37:46 So, what this map tells us is a country
37:48 that is most likely to be dominant for
37:52 the next 50 years is
37:55 this country, Israel. Okay? Is it is the
38:01 only wealthy western high-tech society
38:06 in which women choose to have more than
38:09 two kids.
38:11 Okay, this is what game theory teaches
38:13 us. And yeah, I know there are people
38:16 like, "Yeah, but Israel, it's um it has
38:19 9 million people
38:22 and um it's in the middle of a desert
38:24 and everyone hates Israel. I understand
38:26 that. Thank you very much." Okay, I
38:29 understand that. But if you just analyze
38:32 how the game works,
38:36 okay, if you just look at it objectively
38:38 from a game theory perspective, you are
38:41 forced to conclude that Israel right now
38:43 has the major advantage over everyone
38:46 else. Now, it is possible that societies
38:50 will change the fertility rate as the as
38:52 the world changes. Okay? But I'm saying
38:55 that given the current state of things
38:59 Israel their growth trajectory is very
39:01 very high.
39:05 But then the question then is okay
39:08 why is it that Israel
39:12 they are different from everyone else?
39:15 And the answer is because the world
39:17 hates them. Okay? Because they think
39:21 they are different from everyone else.
39:26 and they must unite together to survive.
39:29 So in Israel, fertility
39:32 is status.
39:35 Okay? If you are a woman and you give
39:38 birth to a lot of kids, that means that
39:42 you love Israel. That means that you are
39:45 doing what you can in this war
39:47 for survival.
39:50 It means you are a patriot. Okay?
39:51 Okay?
40:01 So what the west has done is not only um
40:03 has it created a dating game where women
40:06 can choose to have kids but the western
40:08 world has also given up on religion and
40:10 embraced materialism. Right?
40:12 Right?
40:15 So what is valued
40:18 in our world in the west? It's not patriotism
40:20 patriotism
40:24 or love of family or religious duty.
40:26 It's just how many Instagram followers
40:28 you have. It's how many YouTube
40:31 subscribers you have. It's how many how
40:33 much money you have. Okay? That's all
40:35 that matters.
40:37 So given the current state of state of
40:41 events, it's very hard for the Western
40:45 world and really for China to survive
40:47 next for the next 50 years. Okay. And I
40:49 and I know like well China has a billion
40:52 people. So even though um
40:54 um
40:57 you know we're only giving birth to 10
40:58 million kids a year which will still be
41:01 around for a long long time. Okay. So at
41:03 this rate by 2100
41:05 China will be will be at a population
41:06 about 600 million. That's still a lot of
41:09 people man.
41:12 Um okay
41:15 here's the problem though. Okay. This is
41:16 South Korea. Okay. South Korea is like
41:19 the worst case scenario and for South
41:20 Korea this is actually the best case
41:23 scenario where okay given current trends
41:25 and let's let's just pretend that
41:27 nothing bad happens to South Korea.
41:30 Well, by the year 2100 you you have a
41:32 situation like this where the vast
41:34 majority of people are over 65 and you
41:39 have no kids. Okay, that is a zombie
41:41 society where no one works and everyone
41:44 just I don't know walks around the park
41:45 every day.
41:47 No one works. So the economy has
41:50 collapsed. Okay. So look look look at
41:53 this trend where we are now in here.
41:55 Okay. Where the majority it's still a
41:57 working population which is good. You
41:59 need that for the economy. But by the
42:01 time you hit 2040,
42:04 okay, you got this huge dependency and a
42:06 creating population. Okay. You you guys
42:09 see this where we are in um Okay. So
42:12 we're at 2020, right? Okay. All right.
42:15 So it's still not too bad. But by the
42:18 time you have 2040, look at this. Okay,
42:20 look at this m look at this. Where you
42:22 have absolutely no kids and then you
42:26 have lots and lots of retirees. Okay?
42:28 And then by the time you hit 60, oh my god,
42:30 god, right?
42:32 right?
42:34 Your population, your working population
42:39 has decreased by half, by 50%. All right?
42:41 All right? So
42:43 So
42:45 if things are stay the same, if nothing
42:48 happens, South Korea will be will be
42:52 dead in I don't know by 20
42:55 20
42:57 150. Okay, best case scenario. But what
43:00 we know from history is that societies
43:02 will not die naturally.
43:05 Eventually South Korea will be forced
43:08 into wars, new economic crisis. So this
43:13 trend will just increase and so if North
43:16 Korea get got past 2080 I'd be very
43:18 surprised. Okay, I would be surprised by 2040
43:20 2040
43:23 South Korea were to face collapse as a
43:25 nation state.
43:28 Okay, because you need these people to
43:29 work but guess what? You also need them
43:31 to fight wars. So if North Korea ever
43:35 threatens South Korea, most of your
43:37 adult population will be dead.
43:40 Okay. So, South Korea cannot fight a
43:44 war. Now, the prospects for South Korea
43:46 is utterly hopeless. There's nothing
43:50 South Korea can do about this because
43:51 South Korea is an extremely
43:55 materialistic society where
43:58 the only way only way to get ahead is by
44:00 making a lot of money. Okay? And if
44:02 you're a middle class person in South
44:05 Korea, it makes no sense for you to have
44:07 three kids. makes sense for you to have
44:09 one kid and put all your resources into
44:12 this one kid in the hopes that he passes
44:14 the college examination, gets in a good
44:16 university and then gets a good job at
44:18 Samsung, which is the only company in
44:21 South Korea. Okay, Samsung,
44:24 right? So, the situation is pretty dire
44:27 in South Korea.
44:32 All right. Okay, that's it for
44:34 today. Any questions, guys, about what
44:36 we've learned? Yeah.
44:36 Yeah. >> Okay.
44:43 >> Yeah. Speaking of mic, please.
44:46 >> So, so for the last graph that uh we
44:49 talked about Israel and I've noticed
44:53 that the Saudi Arabia that is also like
44:58 uh at uh have not bad GDP per capita and
45:01 fertility rate. So, but for Saudi
45:03 Arabia, maybe I'm wrong, like uh
45:06 stereotypically that they didn't receive
45:09 uh much hate as Israel. So, so why did
45:12 they like at the similar position as Israel?
45:13 Israel?
45:14 >> Okay, that's actually really good
45:17 question. Okay. All right. So,
45:19 So,
45:21 South Saudi Arabia, as you can see from
45:24 this map, has it's a very wealthy society.
45:26 society.
45:30 um and families have about 4K on
45:32 average. All right. So, South Saudi
45:34 Arabia is actually an outlier. And the
45:37 reason why is that it gets all the money
45:39 from oil revenues. Okay? So, it sells
45:41 with oil around the world. What what
45:43 does it do? It creates a welfare state
45:45 using this oil.
45:50 Um so, you're incentivized to have um
45:51 many children as possible because the
45:52 government will pay for it. free
45:54 schooling, free health care, free
45:57 housing, and then a guaranteed job. So,
45:59 it's basically like socialism. Uh it's
46:02 also a Muslim country. So, you have this
46:03 religious duty imperative to have have
46:06 as many children as possible.
46:08 Okay. But the problem with Saudi Arabia
46:12 is the idea of human capital
46:17 where it is not really a Mar society in
46:19 which people are well educated and
46:20 they're contributing to the to the
46:23 economy. Okay. Saudi Arabia just just
46:24 gets all its money from oil and that's
46:27 it. It's trying to grow terrorism. It's
46:31 trying to develop its uh human capital,
46:33 but it doesn't really work. Okay. So, so
46:36 you're right in that Saudi Arabia
46:40 um it is uh it seems to be doing well,
46:42 but it's not really. Okay.
46:45 Um but also like people will argue about
46:47 Israel as well. We're like, well, Israel
46:48 gets all its money from the United
46:50 States and it's the American military
46:54 that supports Israel. Um, that's true to
46:55 a certain extent, but I would argue that
46:57 you actually go to Israel, you will see
47:00 that it's an open dynamic society in
47:01 which you're allowed to ask questions,
47:02 which you're allowed to criticize the
47:06 government, uh, in which you are given a
47:07 lots of opportunities for social
47:10 mobility. Okay. So, Israel has democracy,
47:12 democracy,
47:18 it has uh innovation, okay, it has um
47:22 um technology,
47:24 okay? And Saudi Arabia doesn't have
47:26 these things. If you want to be a really
47:28 strong nation, then you need innovation,
47:30 you need openness, you need you need
47:32 technology, okay? It's also um really
47:34 highly educated,
47:37 right? Okay. Does that make sense? Okay.
47:40 So Saudi Arabia is really an outlier
47:42 here. All right. But the problem is what
47:45 happens if
47:47 Saudi Saud runs out of oil, right? Or
47:48 there's a war in the Middle East and
47:51 Saudi Arabia is kind of screwed. All right.
47:53 right.
47:54 All right. But you can also argue, no,
47:56 well, you know, Saudi Arabia, it has a
48:00 lot of money and maybe Okay. So, so game
48:03 theory doesn't give us the answers. Game
48:06 theory we it just gives us a guide to
48:08 ask questions and do research. Okay.
48:11 Does that make sense? Uh yeah.
48:14 >> I have a question about
48:17 I have a question about like when is
48:22 this data? It's it's rose about 2009,
48:24 right? So how about now? Did it change a
48:28 lot or like is there anything change?
48:31 >> Um okay.
48:34 Okay. Yeah. So you ask you asked about
48:37 the sourcing of the data. Okay. And
48:38 you're right in that there there will be
48:41 fluctuation. Okay.
48:47 But the um but this is 2024. Okay. 2024.
48:53 And this is Israel right here. Okay. All
48:55 right. So if it's red, it's above replacement.
48:57 replacement.
49:00 All right. And if you just Google Israel
49:03 population fertility rate, Israel is the
49:05 only wealthy nation in the world that
49:08 has an above replacement fertility rate. Okay.
49:10 Okay.
49:14 [snorts] [clears throat]
49:15 [clears throat]
49:23 All right. Great. So, I will see you
