Utopia, you are standing in it!

The Roman maxim ‘If you want peace, prepare for war’ is about the power of credible commitments in avoiding a violent form of bargaining called war. If you look threatening – have a great power to hurt – you can compel people to do what you want, which includes not attack you. Threats are cheap especially when you do not have to carry them out. You get what you want without any fighting.

Those that show the greatest credible prior commitment – those that burn their bridges – extract much more from bargaining that those that have options to fall back on. People fear cornered opponents.

Who picks a fight with someone who looks crazy or cannot back down? Who picks a fight with someone who carries himself or herself like a seasoned bar fighter?

As explained by David Friedman:

“Consider a bar room quarrel that starts with two customers arguing about baseball teams and ends with one dead and the other standing there with a knife in his hand and a dazed expression on his face.

Seen from one standpoint, this is a clear example of irrational and therefore uneconomic behaviour; the killer regrets what he has done as soon as he does it, so he obviously cannot have acted to maximize his own welfare.

Seen from another standpoint, it is the working out of a rational commitment to irrational action – the equivalent, on a small scale, of a doomsday machine going off.

Suppose I am strong, fierce, and known to have a short temper with people who do not do what I want. I benefit from that reputation; people are careful not to do things that offend me.

Actually beating someone up is expensive; he may fight back, and I may get arrested for assault. But if my reputation is bad enough, I may not have to beat anyone up.

To maintain that reputation, I train myself to be short-tempered. I tell myself and others that I am a real he-man, and he-men don’t let other people push them around. I gradually expand my definition of “push me around” until it is equivalent to “don’t do what I want.”

We usually describe this as an aggressive personality, but it may make just as much sense to think of it as a deliberate strategy rationally adopted.

Once the strategy is in place, I am no longer free to choose the optimal response in each situation; I have invested too much in my own self-image to be able to back down…

Not backing down once deterrence has failed may be irrational, but putting yourself in a situation where you cannot back down is not. Most of the time I get my own way; once in a while I have to pay for it.

I have no monopoly on my strategy; there are other short-tempered people in the world.

I get into a conversation in a bar. The other guy fails to show adequate deference to my opinions.

I start pushing. He pushes back. When it is over, one of us is dead.”

Tom Schelling’s fellow Nobel Prize winning game theorist Robert Aumann argued well that the way to peace is like bargaining in a medieval bazaar. Never look too keen, and bargain long and hard, for otherwise people will take great advantage of you! But again to quote Schelling:

“A government never knows just how committed it is to action until the occasion when its commitment is challenged.

Nations, like people, are continually engaged in demonstrations of resolve, tests of nerve, and explorations for understandings and misunderstandings…

This is why there is a genuine risk of major war not from ‘accidents’ in the military machine but through a diplomatic process of commitment that is itself unpredictable.”

That is why there was World War I. A state also can be tempted to start a war now to avoid having to deal with a stronger opponent in the future. That is why Britain and France declared war on Germany in 1939.