Ego

The Game of Life

Frank Schirrmacher

• Publisher: Polity
• Year: 2015
• Print ISBN: 9780745686868
• eBook ISBN: 9780745686905
• Edition: 1
• Topic: Economics
• Subtopic: Economic Theory
• Index: Economics

Twenty-five years after the end of the Cold War, a new Cold War is being waged in our societies. During the Cold War a theoretical model of man was developed by economists and the military, an egotistical being interested only in his own benefit and in duping his opponents to achieve his ends: a modern homo oeconomicus. After his career in the Cold War ended, he was not scrapped but adapted to the needs of the twenty-first century. He became the ringmaster of a new era of information capitalism. He sought to read, control and influence thoughts; to predict, price and eliminate risks. Today stock-market trading is guided by him. He uses computer algorithms and Big Data to build up detailed pictures of our preferences and then suggest and sell goods to us. The model has become a self-fulfilling prophecy. We are no longer the masters of our own fate. The Game of Life runs without us.

Schirrmacher traces the progress of this extreme rationalization of social life from the Cold War games of the 1950s Rand Corporation to the stock-market trading techniques that brought about the financial crash of 2008, showing how these developments were interwoven with the rise of game theory, rational choice theory and neoliberal economics. The state and politics increasingly submitted themselves to the logic of computerized game theory and an economistic view of the world, evading real decision-making in the process. In this brave new world individuals, alone in front of their computers, may think they are constructing a reality of their own choosing, but in fact they are being manipulated all along by others who are setting the rules of the game.

This international bestseller by one of Germany?s most distinguished journalists is a powerful indictment of a way of thinking that has become pervasive and threatens to undermine not only parliaments and constitutions but also the sovereignty of the individual to be the person he or she wants to be.

PART I
OPTIMIZATION OF THE GAME

1
TRANCE

THE MILITARY SEEKS AN ANSWER TO THE QUESTION OF HOW ONE ACTS EGOTISTICALLY

It starts, like a story from The Twilight Zone, with a trance. We are in the first years of the Cold War. Somewhere in America, protected by metre-thick bombproof concrete and steel walls, sit highly trained people. They are members of the United States aerial surveillance units. They are gazing at radar screens.

The soldiers are looking for small blinking dots that appear occasionally on the screen. They register even the slightest movement; every signal could be a Russian aeroplane loaded with an atomic bomb. They have been told repeatedly that no job in the entire American armed forces is more vital.

Then inexplicable things happen. An air force officer, who has survived the Second World War without a scratch, manages to break his leg on the short journey from his screen to the coffee machine. Others nod off for a moment. Some are away answering queries. Then there is the artificial light, the underground doors and passages, the growing bunker mentality, and always the green circles of the radar screen: all this reinforces the sense of being inside a ‘hypnotic organism’.

‘It’s difficult to stay awake,’ admits a crew member, ‘when you’re sitting in a dark room staring at a radar screen day after day, week after week, always looking for a signal that needs a decision.’ And that’s fatal, because ‘a minute asleep could mean a city destroyed’, as a concerned visitor to the bunker wrote in 1955.¹

A team of scientists – economists, psychologists and sociologists – alerted by the military tried to track the absences in the green-lit faces. And they finally realized that it was the computers, these vigilant machines, that were hypnotizing the men operating them.

This presented the researchers with an almost insoluble task: how to train soldiers to resist the hypnotic power of their own tools.

Every thirty seconds the men in the white coats scanned the soldiers’ faces with cameras controlled by punched cards. Every twenty minutes they photographed their screens, drew diagrams on their writing pads, in which they made notes every hour on the crew’s movements and the spatial distances between them – exactly the stuff of many a Hollywood science fiction or horror movie.

The scientists called these ‘psychodrama sessions’. The aim, however, was to describe the soldiers’ minds in mathematical terms. Not only were men operating machines, but machines were learning how to operate men.² To do this, people had to learn how to become machine-readable. And in this way science fiction became reality, because for the first time machines recorded not only movements or time management but also human ‘values’ and feelings.³

It turned out that many soldiers regarded the radar screens as outsize telescopes or as a ‘window’ into the world. This looked like a place to start. They had to be taught that what they were seeing on the screen was a game in which the other player, the Soviet Union, would do anything to trick them. It was a question not just of registering a signal but of predicting at any given moment the next movements of the blinking dot, which could be the Soviet adversary.

Since the Russians had the atomic bomb and a single aeroplane had the destructive power of entire squadrons of aircraft, the need for completely new strategic thinking had become vital. In the paranoid atmosphere of the time (when people didn’t know what we now know in retrospect), when a surprise attack by the Soviet Union was an ever-present threat, the human relationship to information had to be reduced to a simple code: expect the worst. You don’t know, the crews were drilled, what the opponent plans, but you do know that its only aim is to trick you.

The mesmerizing green lights on the monitor didn’t display the ‘truth’ or the world as it was. They showed, as a contemporary report described it, a ‘poker face’.⁴ The soldier at the radar had to imagine himself and the screen as two poker players. It was a cut-throat game, as poker is often described. By seeing himself as a player in a poker game, the soldier was kept awake, stimulated, with his strategic intelligence honed.

The blinking dot could be a harmless commercial aircraft or a Russian aeroplane with a nuclear payload. The man at the machine had to understand that ‘poker face’ meant not spatial movements but strategic moves and could just as well be a bluff as the real thing.

So as not to fall into the trap, there was only one reliable assumption, one that worked well in economics, as the economists involved knew only too well: acting ‘rationally’ can only mean operating in one’s own interests. For strategic intelligence this meant that if people acted in a certain way, it had to be assumed that they were hiding something in order to win the Game of Life.

Fifty years later, the anthropologist Caitlin Zaloom, who worked for two years as a stock exchange trader in order to describe the fully automated trading world, made exactly the same observation. The traders have to train their attention completely on numbers, which are no longer something fixed and stable but turn into continuously changing real-time signals.⁵ Every transaction is a move in a game; all of the players think only of themselves; there are bluffs and surprise attacks, weapons of mass destruction and tactical, pinpoint weapons. The players are permanently screened, and decisions have to be made so quickly that they can only be done by computers.

Above all, however, it is the game theory models developed during the Cold War that are used by today’s hedge funds. Entire investment bank departments use computers and game theory to decipher the intentions of rival traders at breath-taking speed from a huge volume of data so as to adapt their own behaviour accordingly.

This would have come as no surprise to those who designed the mind of the new human. It was probably even their intention. It was not psychologists who devised the new ‘rational self-interest’ behaviour and conceptual models for the military, but economists, physicists and mathematicians. The economists were familiar with markets in which everyone sought their own advantage. Their strategies for an egotistical society were never limited solely to the military in the Cold War. The strategies were said to be universal and applicable wherever decisions were made – in poker, in business, at the stock exchange, in war.⁶

In 1950 the American sociologist David Riesman complained in his international bestseller The Lonely Crowd that in modern society individuals were becoming radar operators of their own life. No longer guided by their inner self but from outside, they could not help picking up signals from others and adapting their behaviour accordingly.⁷ Now the criticism was reversed: everything becomes logical when one recognizes that the world is a poker game and everyone wants to win.

It sounded very convincing. When the first information about this new theory was leaked, a lot of hype developed around it. In a few years RAND Corporation, the organization to which the scientists who analysed the radar crews belonged, developed under the cloak of military secrecy into the most powerful think tank in the United States. It was not just about the Soviet Union anymore. It was about everything.

The birth of this idea has been described as ‘a key transition in American intellectual history’.⁸ It is certainly one of the most underestimated. Only if we accept the premise that individuals always act out of self-interest can the entire complexity of human behaviour be translated into the language of mathematics. Formulae can be written, moves calculated, negotiations and compromises modelled and people trained to a new ‘rationality’, which they master automatically as if in a trance – an operation that is impossible if it is assumed that individuals have to be understood through their unique personal character.

A decisive factor in the worldwide breakthrough was the fact that these calculations could now be done at lightning speed and then also in real time. The first computers offered ingenious tools that were just waiting to be fed with the formulae for people. Calculating machines are bad at psychology but very good at computing profit maximization. Economists began to calculate the most complex decision situations with the aid of computers. With the financial support of the military, this was also tried out first of all on the Soviet Union.

Computers analysed the signals on radar screens and...

Table of contents

• Cover
• Dedication
• Title Page
• Copyright
• Preface
• Part I Optimization of the game
• Part II Optimization of the individual
• Acknowledgements
• Appendix
• References
• Index of names
• End User License Agreement