It has been funny to watch the rise of "China is beating us" rhetoric against the steady backdrop of "mercantilism is obsolete/bad" dogma, because the elephant in the room is that China has been running a textbook mercantilist playbook.
And then externally Chinese policy is oriented around suppressing the value of its currency, which is basically a monopolist's tactic--artificially lowered prices in order to crowd out competition.
I think that's mercantilist-ish, but kind of a modern version?
It's definitely the opposite of what the US does, the currency is the world reserve and therefore drives the price of the dollar above what it would be without trade, which I guess makes exporting from the US much more difficult?
Anyone who is an expert in global economics please correct me here :)
Remember, governments have a monopoly in areas of life that impact everybody constantly. Private monopolies do not, in every case you can simply ignore them and not purchase their products, and by doing so you exert more control over them than you do casting a meaningless vote every few years.
The idea of democracy being will of the people is pure fantasy. It's useful to prevent governments from doing really bad things, that's it. It doesn't even matter who you vote for, broadly speaking. Just that you are able to exert that pressure.
Haven't read his book, but the idea that monopolies are good isn't typically made in a vacuum, it's made relative to alternatives, most often "ham-fisted government intervention". It's easier to take down a badly behaving monopoly than to change government, so believing monopolies are better than the alternatives seems like a decent heuristic.
What? How is the first alternative poor government instead of multipolar competing companies? When was the last time a Monopoly was actually broken up in the US? ATT/Bell 50 years ago? lol
Over the past few centuries, countless new economic structures and strategies have been discovered and practiced. The rewards for the same action today and in the past can be completely different due to this.
So to me, if someone claimed more than a few decades ago that certain economic strategies and structures are good or bad, its simply not worth listening to them, unless someone reconfirms that the old finding still holds with the latest range of strategies. In that case, the credit and citation goes to that new someone, not the ghosts of the past.
[1] A good interactive demo https://ncase.me/trust/
As you point out, it is all game theory.
But things that arrange for the game to be more beneficial to everyone, that align our interests more, deserve to be called "good", regardless of their inability to universally do so.
The latter would be an impossible bar for anything.
Where I find things frustrating, is when someone thinks because something is "good", it somehow becomes "enough". (Think, capitalized versions of different economic schools of thought.)
Game theory is just math. As with any math, the calculations can all work out, but that says nothing of how it reflects nature. All you can say is that if the axioms are all true, then this is the necessary outcome. Look for string theory as a cautionary tale here.
Game theory assumes rational systems. But we have over 6 decades of behavior science which contradicts that fundamental assumption. Economic behavior is not necessarily rational, and subsequently it is not inherently game theoretic. You will find plenty of dogmatic, idealistic, superstitious, counter productive, etc. behaviors in an economy. You need psychology, and not just math, to describe the economics which happens in the real world.
> Hard to call such actors rational, but that does not stop as from studying them.
This is precisely why I object to your first post. “Shut up and do the math” has not done the wonders which string theorists had hoped. Game theory is a perfectly fine way to mathematics, and to study certain strategies, but it tells us nothing about the nature of economies in the real world.