Wolf for Thanksgiving dinner — a Fairy Tale

Nov. 22, 2012

By Mark Cabaniss

Democracy, it has been said, is two wolves and a sheep voting on what to have for dinner.

Yes, the sheep gets to vote.  And yes, in theory he could appeal to one of the wolves to break rank and vote with him instead of the other wolf.  But in reality, the sheep loses.  Every time.

The only way that the sheep could win, in a closed system, or zero-sum game, would be for him to convince one of the wolves that the other wolf would make a tastier meal than would the sheep himself.  Alternatively, he could try to convince one or both of the wolves that they are not, in fact, in a zero-sum game.  Historically, the sheep has had a difficult time doing this.

We can construct a simple model with only three voting blocs, each of which considers only its own economic interests when voting, each represented by one of the animals:

1. People who don’t pay taxes (Transfer Wolf);

2. Public employees (Public Wolf);

3. Private sector employees (Sheep).

At dinner time — oh, excuse me — voting time, there are two propositions on the ballot:

A. Shall we raise (or decrease) taxes and use the money to raise (or decrease) spending on Public Wolf?

B. Shall we raise (or decrease) taxes and use the money to raise (or decrease) spending on Transfer Wolf?

Voting

The voting goes like this:  On Proposition A, Public Wolf votes to raise taxes and raise his own pay.  Sheep votes to lower taxes and to lower Public Wolf’s pay.  Public Wolf and Sheep are at a stalemate.

Transfer Wolf sits this vote out.  Since he doesn’t pay taxes, he doesn’t care what tax rates are.  Nor does he care how much Public Wolf is paid, unless — unless he is paid to care.

On Proposition B, Transfer Wolf votes to raise his own benefits and to raise taxes to pay for them.  Both Public Wolf and Sheep vote against him.

Transfer Wolf has a problem. He has been outvoted.  But luckily for him, Public Wolf also has a problem: He is in a stalemate with Sheep.  The two wolves realize that they need each others’ votes, so they agree to work together, against Sheep.  Each will support the other’s position, and Sheep will be outvoted on both propositions.

In actual practice, the evidence suggests this is exactly what is happening — transfer payment recipients and government workers have formed a successful political coalition.  According to a recent article by demographer Nicholas Eberstadt, since 1960 total United States transfer payments have grown from $24 billion to just short of $2.2 trillion in 2010, nearly a 100-fold increase in the last half century.

Simultaneously, total government spending, federal and state and local, has gone from about 24 percent of GDP in 1960 to about 36 percent in 2010, growth of 50 percent.

Nash equilibrium

A Nash equilibrium, as popularized in the book and movie “A Beautiful Mind” about mathematician John Nash, posits a game stalemate dependent on two conditions: first, each player knows every other player’s strategy; second, despite knowing everything, each player is nonetheless unable to adjust his own strategy to make it more advantageous.

In politics, there are no secret strategies, since elections involve trying to gain adherents to your strategy over the other side’s.  But in our simple Fairy Tale, even though the first condition for Nash equilibrium is there — everyone knows everyone else’s position — there is nonetheless no equilibrium.

Public Wolf and Transfer Wolf will continue to vote in tandem, and thereby grow; Sheep will continue to be outvoted, and shrink.  If we graphed Sheep’s life expectancy, it would be a curve breaking straight down, inversely proportional to the growth of his two compatriots.

But when we consider the second condition necessary for a Nash Equilibrium, we see how Sheep can get out of his predicament: He simply has to change strategy and start competing with Public Wolf by directly bidding for Transfer Wolf’s vote.

Why hasn’t Sheep already thought of that?  He could, after all, promise to cut Public Wolf’s pay and then split the savings with Transfer Wolf, much as Public Wolf promises to raise taxes and split it with Transfer Wolf.

The reason for this is history, and the simple inability to think past it.

Sheep has always been opposed to raising taxes, whether it is to increase the size and pay of Public Wolf or whether it is to increase the size and pay of Transfer Wolf.

But, just because Sheep has always been opposed to these ideas in the past does not mean that he has to stay opposed to them in the future.  If Sheep could let go of his historical antipathy to Public Wolf and Transfer Wolf, he could seek to make a deal with one against the other.

Of course, there is yet one more way out for Sheep. He could potentially try to convince one or both of the wolves that their dinner choice is not a zero-sum game; that they could, in fact, join forces and go foraging in the woods together for something that all three animal friends could eat.

Historically, this approach has been a loser for Sheep.  At dinner time, both of the wolves are usually too hungry to listen to reasoned pleas about thinking outside the zero-sum model.

So the only bet for Sheep may be to undergo a paradigm shift, overcome his qualms, and make a deal with one of the wolves to dismember and eat the other.

22 comments

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  1. Douglas
    Douglas 22 November, 2012, 05:14

    I have a sister in Mississippi who likes to forward anything anti Obama. Including one ‘clever’ article (like this one) about the takers and the makers, and, you know, socialism and John Galt and other tedious crap.

    Thing is, when she was in her twenties, with three daughters, her husband was killed in an auto accident. The family helped her out, but for the most part, she and her children were raised on the dole.

    She VOTES with the ‘makers’

    Many of the ‘wolves’ (state workers) that I know, vote consistently AGAINST tax increases. If I were to guess, I would pick a random number like 47% of GOVERNMENT WORKERS vote against tax increases.

    There are NOT two wolves and a sheep. There are a lot more private sector workers than public. And even public sector workers have private sector family.

    People don’t always vote their pocket book, and the ‘transfer’ sheep, on average, are more likely not to vote at all.

    Reply this comment
  2. Rex the Wonder Dog!
    Rex the Wonder Dog! 22 November, 2012, 08:26

    Many of the ‘wolves’ (state workers) that I know, vote consistently AGAINST tax increases. If I were to guess, I would pick a random number like 47% of GOVERNMENT WORKERS vote against tax increases.
    ==
    Your random, uninformed “guesses” are as bad as your comments dougie 😉

    Reply this comment
  3. Douglas
    Douglas 22 November, 2012, 10:11

    The problem with Romney’s 47% fiasco was not that he was cold hearted and elitist.

    The problem was a total lack of common sense. Because 47% of Americans don’t pay federal taxes, and about 47% of Americans support Obama, he was making the inference that they were the same 47%. In fact, they are overlapping groups. Roughly half of those who do not pay federal taxes are likely Romney voters. Are they wolves, or are they sheep?
    ———-
    “In 2009, according to Internal Revenue Service studies, six of the 400 U.S. tax filers with the highest adjusted gross income (meaning AGI of at least $77 million) paid no U.S. income tax, while 19,551 U.S. households with income above $200,000 owed no U.S. or foreign income tax.”

    Are they wolves, or are they sheep?

    Reply this comment
  4. Rex the Wonder Dog!
    Rex the Wonder Dog! 22 November, 2012, 21:33

    In 2009, according to Internal Revenue Service studies, six of the 400 U.S. tax filers with the highest adjusted gross income (meaning AGI of at least $77 million) paid no U.S. income tax
    ==
    So 1.5% paid nothing, doesn’t that prove that the tax system is working, at least 98.5% of the time for the richest Americans???

    Reply this comment
  5. Ted Steele, Prosecutor
    Ted Steele, Prosecutor 22 November, 2012, 21:49

    Good post Douglas—- the dummies, John Galt
    groupies, tea baggers, repub’s, neo nazi’s and the am radio crowd! Ya gotta laugh!

    Reply this comment
  6. Hondo
    Hondo 23 November, 2012, 08:36

    There will be an epic fight between the wolves. The welfare wolves will be fighting against the public union wolves when they find out that raising taxes does not bring in any more revenue. In Connecticut, Illinois and 09 California, huge tax increases were rammed through and the end result is more deficits.
    There is no more money left to steal. There will be blood on the streets when gigantic cuts to the welfare wolves are made to protect the gigantic immoral pay and pensions of the public union wolves.
    And Ted. I’d not bring up the tea party when your Occupy movement was the largest mass rape organization since the soviets marched into Germany in 1945. One of them tried to kill the president. Several were caught planning violent terrorists bombings. A huge fire in Colorado. Dozens of assaults and robberies. A hate crime robbery in Oakland against a gay woman. The Occupy movement was possibly the most violent political movement since the Nazi party.
    Your Occupy movement. The tea party was just against abortion and for the constitution. I happen to be pro choice but for the constitution.
    Ted, are you pro rape?
    Hondo……

    Reply this comment
  7. Rex the Wonder Dog!
    Rex the Wonder Dog! 23 November, 2012, 08:45

    the dummies, John Galt
    groupies, tea baggers, repub’s, neo nazi’s and the am radio crowd!
    =
    yteddy, when you result to name calling you have lost.

    Teddy =0-14 😉

    Reply this comment
  8. Ted
    Ted "Eddy Baby" Steele, Associate Prof. 23 November, 2012, 09:05

    LOL— Wow— Rexy Poodle does not like name calling?

    Ironic?

    and of course………..wait for it…….

    he remains 0 for 14 ™ !

    Reply this comment
  9. Rex the Wonder Dog!
    Rex the Wonder Dog! 24 November, 2012, 10:06

    Teddy how many CORRECT predictions have YOU made???

    let me tell you trougher boi………wait for it……

    0 for 29 ™ ! BAM!!!!!!!!!!!!!!!

    Now you can resumne your name calling, b/c it’s all you have really 😉

    Reply this comment
  10. Ted
    Ted "Eddy Baby" Steele, Associate Prof. 24 November, 2012, 13:05

    Wrong–

    I predicted the cop’s pension case little buddy– I said it would win at the trial court– the app court and the State Supremes! LOL nice try!

    I won’t even count prop 30!

    You remain…..

    yes…

    0 for 14 ™ !

    Back peddle on sweet troll!

    Reply this comment
  11. Rex the Wonder Dog!
    Rex the Wonder Dog! 24 November, 2012, 17:14

    What’s Prop 30?

    Reply this comment
  12. Ted
    Ted "Eddy Baby" Steele, Associate Prof. 25 November, 2012, 07:45

    Poodle–

    Is a back peddling big mouth.

    0 for 14 ™ !

    Reply this comment
  13. Rex the Wonder Dog!
    Rex the Wonder Dog! 25 November, 2012, 11:16

    Name calling will get you nowhere Steals 😉

    Reply this comment
  14. Ted
    Ted "Eddy Baby" Steele, Associate Prof. 25 November, 2012, 13:35

    0 for 14 ™ !

    no comment on your many losses?
    Guess you’re not all that smart, no?

    Reply this comment
  15. Rex the Wonder Dog!
    Rex the Wonder Dog! 25 November, 2012, 13:57

    Losses?? Please little one…… you picked the cop pension case, one CASE!!!!!!!!! That’s it. And it was a long shot anyway, so you were really not any predictor, but keep thinking that small fry 🙂

    I am still waiting for your SB CalTURDS prediction…… until I turn 200!

    Reply this comment
  16. Ted
    Ted "Eddy Baby" Steele, Associate Prof. 26 November, 2012, 06:37

    no comment still on your many losses???

    lol

    Reply this comment
  17. Rex the Wonder Dog!
    Rex the Wonder Dog! 26 November, 2012, 14:09

    Me lose?? name one loss!

    Reply this comment
  18. Ted
    Ted 26 November, 2012, 15:44

    LOL

    Oc Cops pension trial level case

    OK there’s one– want more??

    LOL– and of course have ALL of the archives!

    Reply this comment
  19. Ted
    Ted 26 November, 2012, 15:45

    any comment on that loss? You were SO certain!

    Reply this comment
  20. Ted
    Ted 26 November, 2012, 15:46

    This was fun–

    Rex The Wonder Dog! says:
    April 12, 2012 at 4:05 pm
    The tax hikes are DOA, and unless Clown starts cutting pensiosn and other give aways there will ocntinue to be problems.

    0 for 14 ™ !

    Reply this comment
  21. Rex the Wonder Dog!
    Rex the Wonder Dog! 26 November, 2012, 18:52

    OC Cop case doesn’t cout, I was only kidding 😉

    Reply this comment
  22. Ted
    Ted "Eddy Baby" Steele, Associate Prof. 27 November, 2012, 19:58

    Great article Mark!

    back peddle some more Poody! I love it….

    Reply this comment

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