A banker, Daily Mail* reader and immigrant worker are sat around a table looking at a large chocolate cake. The banker leans forward, takes a knife and makes two cuts that creates a 20% segment. He then takes the other 80% and puts it on his plate. After a while he turns to the Daily Mail reader and between mouthfulls says “I’d be careful if I were you. He’s after your piece.”
Competition for fixed or finite resources can lead to conflict. The simplest form of competition is a zero-sum-game in which me having more means you having less. I have +1 you have -1 so the sum of the competition is 0. Zero-sum, non-zero-sum and all other sorts of games have been studied extensively. Lots of clever people doing lots of clever maths. There are many applications in economics, politics, evolutionary biology amongst others. There’s even been a film made about one: the Nash Equilibria. OK, the film (A Beautiful Mind) was about John Nash, but Nash was awarded the Nobel Prize in Economics for his work on game theory.
The outcome of a game can depend on the rules, who is playing it (and how well) and luck. There are some games for which the only sane strategy is to simply not play
Here’s a remarkable fact.
In the years since 1990, our global civilisation used more energy than had been used in the previous several hundred thousand years, possibly since modern humans first evolved.
No, really. All the energy extracted by burning wood, coal, gas, oil and obtained from wind, solar, hydro and nuclear fission up to 1990. That same amount of energy used again plus a bit more in a little over 20 years.
How on Earth is that possible? To begin to answer that, we need to acknowledge that we are living in a period of quite incredible change. Yet this rate of change is something that we have gotten used to. Indeed, it was something that we were born into: a period of exponential growth. What does this exponential growth in energy look like? Something like this:
A ponzi scheme is a classic scam that despite being guaranteed to collapse continues to work and leave people penniless. It goes something like this. John tells Jane that he has a fantastic money making opportunity. If Jane invests she will get an annual return on that investment of 20%. Wow! Jane invests and sure enough next year she gets a payment of 20% of her original investment. Other people hear about her success and sign up. Soon John has many investors and a large amount of money in circulation. But none of that money was ever invested.
The second person that signed up to John’s scheme was Jack. John simply took 20% of Jack’s money and gave it to Jane. The rest he pocketed (and most probably promptly spent). Just like he pocketed Jane’s money. Of the third person’s money, John took 20% for Jane and 20% for Jack. The fourth person’s money paid the 20% of the first three. And so on, until John is unable to recruit enough new people to pay the returns of the current list of ‘clients’. There’s a short delay during which John avoids calls, perhaps changes address and if he’s sensible hires a good lawyer (with whatever money is left). Then the whole system collapses in on itself. Well, that’s the basics. Real life ponzi schemes can be much more complicated than that. But they all work on the same principles. Why they work, why people get sucked in and lose perhaps everything they have, are very interesting questions. Questions that get asked quite a lot since Bernie Madoff. If you rip people off to the tune of $18 billion dollars I guess that will make the news for some time. Continue reading