Predictive History - The Story of "Civilization", "Secret History", "Game Theory" and more - Game Theory #1: The Dating Game

Episode Date: February 6, 2026

Game Theory #1: The Dating Game ...

Transcript
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Starting point is 00:00:00 This semester, we are going to analyze a question together, which is how do societies behave? What do we do? What motivates us? What drives us? And there have been different theories as to what drives human behavior. Okay, so let's go over some theories. The first theory comes to us from Religion and the idea is that We are all driven and a war between good and evil There's a good side to us and there is an evil side to us. There's Satan and there's God and We are constantly in a battle in ourselves Do we move towards Satan or do we move towards God?
Starting point is 00:01:04 And that's the core of human civilization. So religion is meant to give us the strength to show us the path towards goodness. Okay, that's one theory. Another theory is, comes to us from biology. Okay, and the idea is sex. We want to pass on our genes forward. Because that's the point of our existence. If we cannot have children, we all will die.
Starting point is 00:01:39 So the point of our existence is to have children and have them pass on their genes to others, okay? And for males and females, life is different. Because as a man, you have a penis. And all you have to do is stick your penis into a woman and you're good, okay? That's all you have to do. So you want to stick your penis in as many women as possible.
Starting point is 00:02:11 And that's the point of your existence. But as a woman, your life is different because it's hard to give birth. It takes nine months to incubate the child in your womb. And then childbirth is the most painful experience. Anyone will ever experience. And then the child, it'll take like 16, 18 years to raise a child to mature. child to maturity. So there's a huge investment on your part. So as a female, you have to be very cautious, very careful about who you marry or you have sex with, okay? And so life is a struggle
Starting point is 00:02:48 between men who want to put their penis into anything and woman who want to be careful about who they marry. Okay? So that's the idea of biology. Then of course you have the idea of race and culture. That the world, it's a struggle between these different races and cultures for dominance. And each race, each culture has their own characteristics. Okay, so maybe the yellow race, they're very clever, but they're very weak. And then the white race are brave, but kind of stupid. And the black people are like, anyway, that's another theory.
Starting point is 00:03:33 I'm not saying it's correct, I'm just saying it's a theory that people believe it. Then you have economics. What they believe is that we are driven by money or self-interest. We want to make as much money as possible and that's what drives us. Okay, that's pretty simple. And the last big theory is the idea of liberalism that comes from the Enlightenment. And here the theory is that history is a progress towards enlightenment, to rationality, to truth and to justice. So the inevitability of history of human development is towards paradise, towards heaven. And maybe, you know, we go off track now and then, but inevitably we move towards God.
Starting point is 00:04:40 And this comes to us from the Enlightenment. We call this liberalism. So these are five theories. There are others, but these are five theories that show you the diversity, the variety of ideas out there. What I will do the semester is presented to you another theory, which I call game theory.
Starting point is 00:05:03 And my argument to you is that game theory is the best way to understand how humans behave. What drives nations, what drives societies, what drives humans, okay? So that's my argument to you this semester. So the entire semester, we will study game theory. All right, so what is game theory?
Starting point is 00:05:31 All right, game theory is very simple. The idea is that there are three components to a game. Just three aspects to a game. They're the players, the participants, okay? Then there are the rules or the constraints. In mathematics, we would call this the boundary conditions, okay? The limits to the game. And the third aspect are the incentives.
Starting point is 00:06:11 Basically, how do you win this game? What do you get from this game? game my argument to you the semester is that if you study all three okay if you got who the if you figure out who the players are if you know if you understand the rules you understand the incentives then you understand how the game works and then therefore you can predict how the game will turn out okay that's the skill that I want to teach you this semester and what I want to I'm going to show you, or what I promise you is that if you learn game theory, there'll
Starting point is 00:06:52 be three major benefits to you as a student. Again, you don't have to learn game theory. You don't have to come to class. But if you spend the effort to learn game theory from me, then three things will benefit you, okay? The first benefit is that... is that you become a better person. The point of education, guys,
Starting point is 00:07:23 it's not to get good grades or get any university or get a good job. What I believe is the point of education is to make you into a better person, which means that you are a much more thoughtful person who can better analyze yourself in the world around you. That is allows you to make better decisions. This makes you a much more curious,
Starting point is 00:07:45 much more moral and much more imaginative person, okay? So one benefit of learning game theory is you become smarter and therefore you become a better person. Okay, that's number one. Number two is you'll be able to understand the world that we live in because this world is kind of stupid, okay? So you may have heard that Donald Trump and the American military went into Venezuela for no good reason kidnapped a president of Venezuela, which is against international law, and then brought him back to New York City where he will stand trial.
Starting point is 00:08:33 It's really stupid what happened. But our class, it's not meant to say this is stupid or this is wrong because we all know it's stupid and wrong. We're trying to figure out why this happened and what this will lead to. And so we will be in this class studying and analyzing current events to understand how the world really works, why people behave the way they do and understand how the game of the world works. And this requires you to actually follow the news. Okay? It's not hard to spend five minutes and just read up on the news.
Starting point is 00:09:12 But we'll be looking at the war in Ukraine, we'll be looking at a new war between Israel and Iran, we'll be looking at what's happening in South America, we'll be looking at the conflict between China and Japan, we'll be looking at the relationship between the United States and China. Okay, so this is relevant to your lives because you will eventually have to work and live in this really screwed up world that we live in. Okay? And the third benefit is once you understand the game, you will have predictive powers. You'll be able to understand how the world will develop. You'll be able to analyze your own life and understand how you will develop.
Starting point is 00:10:01 And that gives you control sovereignty over your own destiny. Okay, that's my promise to you. If you actually spend the time to listen carefully in class to participate fully to follow the news and you spend the entire semester doing so, then these three benefits will start to accrue in you. This is a lifelong struggle to learn game theory. I'm a lot older than you are. I've a lot more experience than you. Okay, but I want to show you how to look at the through game theory. Another phrase that you learn in school is, I'm gonna teach you how to think critically
Starting point is 00:10:48 about the world. Or I'll just teach you how to think, okay? All right, are we clear? Any questions before I move on? All right, so this is all very abstract. And so what I'm gonna do now is, I'm gonna use an example of a game to show you how game theory works, okay?
Starting point is 00:11:09 All right, so let's use a really simple game. Let's imagine there are five boys and five girls and they want to get married. So these are the players. What we're going to do is we're going to find them up into male and female. Then what I'm going to do is we will rank the males and the females. Okay, so we're going to rank 10 players into five. four, three, two, one. Five, four, three, two, one, okay?
Starting point is 00:11:52 And so how do we rank them? Well, we rank them according to their attractiveness, using three criteria. The first is genes, the second is wealth, and the third is status. Okay, so genes is very simple. it means that you're a good looking, it means you're tall, it means you're healthy,
Starting point is 00:12:17 you will live a long time, okay? Genes is pretty simple to understand. Wealth just means that you or your family have a lot of money. Status means that you have a lot of friends, you have a high status job, you come from a really powerful family, okay? So these are the three criteria
Starting point is 00:12:38 that we can use to judge a person's attractiveness and then what we can do is rank them from five to one five means really the best one means the worst okay and we can rank all ten according to these metrics so according to biology what we call evolution biology or evolution psychology we're always trying to find the best genes to procreate because this ensures that our genes pass on okay so remember that men have a penis which they can stick into anything woman have to give birth so the strategies are different okay so basically five number five is trying to
Starting point is 00:13:31 have sex with all five women right that's his strategy But female one number five, what you're ensuring that she only gets five. Okay? So these are different strategies. And in this, according to evidence psychology, all five of these females should try to procreate with number five, okay?
Starting point is 00:14:05 But we know you can't do this. It's suicidal. Why is it suicidal? Because the human rights couldn't survive, right? It'd be idiotic to do something like this. Where all five women are just trying to marry this one guy and maybe him, okay? But these three are eliminated. Because then your society would collapse.
Starting point is 00:14:28 You wouldn't, you can have that many children. So this can possibly be true, right? So let's figure out what rationally, what should happen. Okay, all right. So let's think about this rationally. Or from an economic perspective. All right.
Starting point is 00:14:50 So again, number five, he's trying to maximize the game. So he's trying to sleep with all five women, okay? The problem if he does that is these five know they're all being played. And they recognize that this guy is, is probably an asshole. So five, the best woman is like, you know what? There's not much difference between four and five.
Starting point is 00:15:18 So I'll just go marry this guy, right? So number four is gone. And number four is like, you know what? Five is probably making a good decision. So I'll just go marry number three, right? And then what happens now is that five, by trying to marry all of the three, woman, it's stuck with the worst choice.
Starting point is 00:15:44 Right? So that's kind of stupid for him. He's stuck with number one. But guess what? If any of these guys try this crap, that's something happens to him, where four is like, you know what, I can't get five,
Starting point is 00:15:58 but I'll try to get four and three together. And then three is like, screw you, I'm going to go and marry two, four is going to marry three. Then he's stuck with one as well. Or he's just alone. So if they try to individually maximize their outcome, they all get screwed in the end.
Starting point is 00:16:17 So the only way out of this is that they cooperate. And the best way to cooperate is basically five is like, you know what, screw this, I'm not going to go after four or three, I'll just have my five, okay? Four is like, yeah, I'll just go married four. No dating, no games, I'll just go married four. and three, marries three, two, marries two, and one marries one, okay?
Starting point is 00:16:47 And the world now is perfect. Everyone has a husband and a wife, and they can now just have children, and the world is perfect. And this is actually the best strategy for all the players, right? We call this, the word in game theory we use for this, it's called the Nash Equilibrium.
Starting point is 00:17:14 Okay, Nash Equilibrium just means that you always which is state in which all the players maximize their outcome, the Nash equilibrium. And so the world makes sense now. There's a problem with this though. The problem is, in real life, no one does this, okay? In real life, no one actually follows this rule. National equilibrium is this a theory we made up.
Starting point is 00:17:46 But in real life, that's not what happened. What happens? What happens in real life is we choose to be suicidal. Okay? So let me tell you about a game I played. So last year I was teaching this class and I asked the boys and I asked the girls. Pretend you are now 30 years old. Your parents are pestering you to get married.
Starting point is 00:18:21 And you've been on the dating market for 10 years. There's really no one that you think is perfect for you. for you. You've just you've you've have basically given on love. Imagine that you want to get married now and tell me what is the minimum requirement you need in order to agree to marry someone else. Okay, what's a minimum? Okay? And then I have the boys and the girls write down response. The boys were pretty simple, right? Well, you know, as long as she likes me and as long as I can put my penis into her, I'm good, okay? It's that simple, okay?
Starting point is 00:19:04 It really is. Guys are like, yeah, I'll settle for anything. That's the boys, right? Girls were different. Girls who were like, okay, if I don't love him, if I'm not even attracted to him, I need about a million dollars a month. Yeah, I need about a million dollars.
Starting point is 00:19:28 Last class. Last semester. Okay, all right. So, this makes no sense, right? So in theory, in theory, we should follow the national equilibrium. But in real life, what happens is this. All the girls want this one guy. Okay, and maybe number four.
Starting point is 00:19:53 But still number four, but three to one, they don't want. And we know because just, just, you know, Just look at the world around you. Look at these billionaires, like Ellen Musk. How many wives does he have? How many children does he have? Right? All the women in the world, many, not all,
Starting point is 00:20:11 but many, just wanna marry actors, like Brad Pitt. Billionaires like Ellen Musk. Right? And three, two, and one, they, what do they do? Well, they watch Netflix, they watch porn, they play video games. given up on life, okay? They're like, we don't care.
Starting point is 00:20:32 We call these people in cells, right? Involuntary celibates, because basically, they've given up on life and life has given up on them. So this entire competition is between number five and four for all the women in the world. And this is again, suicidal. This will lead to the death of humanity. And the question now is, okay, why are we suicidal?
Starting point is 00:21:01 And so let's look at game three analysis, right? The players, the rules, and incentives. We know what the players are. The players are doing stupid things. The rules we know, okay, but incentives is something that we have to think about. Why are they behaving like this? And the answer is because they're not interested in sex or procuration. what they're interested in is status.
Starting point is 00:21:35 Okay, that's the game to play, status. I don't want to marry someone to have children. I want to marry someone so I can take a picture of her and post it on Instagram so I can get a lot of likes. I want to marry someone so I can walk with her in the mall and all the guys are jealous. I want to marry someone who I can brag about. Okay, it's a game about,
Starting point is 00:21:59 status, not a game about sex or procreation. Do you understand? They are not being rational here. People are trying to maximize their status in life. And that's why everyone's behaving like this. She may be the other woman in the world, but she's still like, you know what? It's still my choice without having kids is a pain in the ass. So if I'm going to make the sacrifice, this guy better be good looking. Okay. Or this. guy better be rich. Otherwise, why would I want to have kids? Okay? So this is why people behave the way they do. If you can think about this way, what you recognize is that people are rational. But to understand why they're rational, you have to
Starting point is 00:22:50 figure out what the game is. Okay? But then this leads to us to a question which is, okay, well clearly this is wrong because if we behave like this throughout human history, we wouldn't be here today. Okay? How is it that we have this game today and we're going to die, but we must have come from somewhere. We've been around for like a long time.
Starting point is 00:23:17 So how is it that humans have survived for so long doing these stupid things? And the answer is because the game changes over time according to the superstructure of society. Okay, the superstructure. The superstructure is what determines the nature of the game. Superstructure, just think about the big picture, right? How many people are there?
Starting point is 00:23:47 Is society wealthy or poor? Are there enemies to the society? Okay, this is the superstructure, the big picture, demographics, economics, culture, politics, religion. And these things together is what determines the nature of the game. All right, so let's look at three examples of superstructure. All right. Example one is you have a low population society.
Starting point is 00:24:21 Low population is like maybe 200 people, 200 people, okay? A village, basically. They are poor and low technology. Low technology means they don't have access to clean water. They don't know what hygiene is. They don't understand what germs are. So it's very easy for a woman to die. in childbirth, okay?
Starting point is 00:24:47 And local competition. Local competition just means that there are no competing villages against them. Okay, so that's one kind of superstructure. The early superstructure of human society, okay? Then you have maybe growing population. Okay, so we're talking about maybe 10,000 people, 20,000 people. They are now growing in wealth,
Starting point is 00:25:12 growing wealth, they have some technology, meaning they have access to clean water, and they have high competition, meaning that they're competing against different villages and societies around them. Okay, that's another superstructure. Now, the third superstructure is overpopulation, which is where we live in today, okay?
Starting point is 00:25:37 Where in China, have a billion people. That's a lot of people. Too much wealth. Okay, but with wealth of inequality, right? And then you have high technology. This high technology just means that every woman who gives birth will not die. And every child born will live off, will live, okay? And then you have something called equilibrium.
Starting point is 00:26:03 Equilibrium just means that, yeah, there's competition, but they're not going to go to war against each other. The world is basically peaceful. Okay? And according to superstructure, the game is going to change. change. So let's go back to the game. Okay, we have 10 people. In a low population, poor society, guess what? They're not going to date. What they're going to do is they might get married, but they're going to have sex with each other. Why? Because as a woman, the only way to
Starting point is 00:26:37 ensure that your child survives is if all the men in the village want to protect and nurture the And they will do that if they believe that the child could be theirs, okay? So the woman will maybe have a husband, but the woman will also choose to sleep with other men to disguise paternity. Doesn't make sense. So there's no dating, there's just lots of lots of sex in order to maintain social cohesion, okay? Now in a superstructure number two, there's no dating either. Why?
Starting point is 00:27:17 society is in competition with other societies and they need to have as many children as possible. So what the solution here is to have arranged marriages, arranged marriages, where, you know, who cares who you marry, just have lots and lots of kids, okay? There's no dating either, just have lots and lots of kids. You marry who your parents tell you to marry. You marry someone that you know. You marry your childhood best friend. Who cares, okay?
Starting point is 00:27:43 But you marry someone, you have lots and lots of kids. Okay? That's superstructure number two. Superstrand number three is the one we live in. And here, you have a dating game, right? Because why? Because the odds of you obtain status is really, really low, okay? And the only way that you can change your status is by marrying up.
Starting point is 00:28:09 And that's why you have a dating game. A dating game is an opportunity for you to find someone better then your social demographic circumstance can suggest. And that's why you have low decreasing fertility rate, where over time, because of the dating game, society will collapse. Doesn't make sense. All right. So now you're the government, and all right,
Starting point is 00:28:49 the world, women who are wealthy, well-educated, are refusing to have children, especially in East Asia. Right now the fertility rate in China is about one. Okay? About one. The replacement rate that you need is a 2.1. So just to maintain your current population levels, every woman in China needs to give birth to at least two kids. But right now, on average,
Starting point is 00:29:19 average women are children have one kid only in China and the worst thing is that this trend is increasing so five years ago the fertility rate was maybe 1.7 now it's one okay so the trend is very very negative okay so good ones all around the world are trying to figure out what to do how do you convince women to have more kids. And what we've discovered is it's impossible.
Starting point is 00:30:00 We can pay you more money like they do in South Korea. Guess what? It doesn't work. Because people don't want money. They want status. And status is a zero-sum game. Okay? Money is infinite, but status, power, is a zero-sum game. So we have overpopulation, we have too many competing for two few status positions, you have decreasing
Starting point is 00:30:24 and there's nothing you can do about it. The moment you give woman choice, they choose to improve their lives by marrying someone better. Not all, but most. And so over time, what happens is your society collapses. If you look at history, the best indicator
Starting point is 00:30:48 that a society is about to collapse is, if the woman who are wealthy and more educated, if they refuse to have children. This is the same, this is what happened to the Romans who collapse. This is what happened to many empires. This is what's happening around the world today, in America, in Britain, in Europe, in China. Okay, and this tells us that society is collapsing.
Starting point is 00:31:10 So in other words, what this really is, okay, the superstructures, it tells us that, tells us the life cycle of civilization, right? So this is when civilization is young, then it mature, it grows, and then it collapses. And if you look at history, all civilizations go through this process of birth, maturation, and then collapse.
Starting point is 00:31:50 and there's no way around it. So the part of game theory is that just by studying one aspect, okay, if I just study this game, all right, I figure out who the players are, the rules, and incentives, I can figure out what the superstructure of this realization is, okay? And then once I have these two, I can now figure out where it came from
Starting point is 00:32:16 and where it's going, okay? That's what I want to teach you in this class, how to analyze a situation so you understand the players, the rules and incentives, which will give you insight into a superstructure so that you can figure out where it came from, and then you can also predict where it's going. All right.
Starting point is 00:32:43 So, but you can also look at the superstructure and figure out what the game is being played. So this is one example, but throughout the semester, we'll be doing many, many different examples of game theory. Is this clear so far? Or any questions? Any comments, any questions before I move on?
Starting point is 00:33:08 All right. All right, so let's just look at some basic facts. Okay. All right, this is a map of the world, okay? As you can see, okay, oh sorry, so the color scheme is this. The red is where the population, the society has an above replacement for 30 rate, okay?
Starting point is 00:33:43 So above 2.1. If it's dark red, like here in the middle of Africa, it's six to seven or six above, okay? And why is that the case? Because Africa is in a situation where it's a growing society with middling tech, so a lot of people die, lots of competition, so to survive, families have to give birth to a lot of kids, okay?
Starting point is 00:34:04 They have no choice in the matter. But then you move to the rest of the world, okay? So this is North America, Europe, and East Asia, the three wealthiest parts of the world. And guess what? The fertility rate is collapsing, because now we've entered the end game, where it is overpopulation, too much wealth,
Starting point is 00:34:23 so too much inequality, and so women are forced to pick the best possible mate or not have children at all. All right? And here, the situation is very, very dire. North America and Europe are kind of okay. Why? Because of immigration. because even though their women are not having children,
Starting point is 00:34:41 they can choose to import people for their labor force. But East Asia is really, really screwed, guys, okay? So just look at this region. So China is one, but the worst is North Korea. Oh, sorry, South Korea. South Korea has the lowest population rate in, sorry, the lowest for rate in the world. They're at between 0.6 to 0.8. So they're probably gone in 50 years time. It's so bad that when you go to South Korea, there are signs outside restaurants that says
Starting point is 00:35:21 no dogs and no kids. They think that kids are a problem. Okay, so you look at these areas. Again, they are poorer so women are forced to have more children in order to survive. Okay? But, you look at wealthy areas, well, they're probably gone in a hundred years' time. It's total collapse. The solution that governments are choosing right now is to import immigrants. Okay?
Starting point is 00:35:59 So these are the trends right now. And it's causing a lot of disruption in society because guess why guys, people don't like outsiders. People don't like immigrants. But they don't have a choice of matter because along with the fertility crisis, it's the aging crisis where your population is getting older and older. Okay? So life, the world, is not as simple. If you want to know who will rule the world in a hundred years time, just figure out which society, in which society do wealthy, well-educated woman choose to have children.
Starting point is 00:36:37 And then that society will rule the world. Okay, it's that simple, right? Well, unfortunately, if you do it that way, you get a really, really disturbing answer. Okay, so this is per capita GDP, okay? So how much people make? All right, so obviously, if you're zero, you're very poor, and if you move to over here,
Starting point is 00:37:05 you're very well-fuel. Okay, so the United States is the welfare side in the world. Right? Sure, we can understand that. Then this is the fertility rate, which tells us how many children women have on average. Okay, so again, 2.1 is replacement rate, okay? 2.1 is replacement rate. So the United States is actually below replacement rate, but the United States doesn't really care because they can import immigrants. Okay?
Starting point is 00:37:33 China is probably around here somewhere, okay? Angola is up here, but it's poor. So what this map tells us is a country that is most likely to be dominant for the next 50 years is this country. Israel. Okay? It is the only wealthy Western high-tech society in which women choose to have more than two kids.
Starting point is 00:38:09 This is what game theory teaches us. And yeah, I know there are people like, yeah, but Israel, it has nine million people. And it's in the middle of a desert. And everyone hates Israel. I understand it. Thank you very much, okay? I understand that.
Starting point is 00:38:28 But if you just analyze how the game works, if you just look at it objectively, from a game theory perspective, you are forced to conclude that Israel right now has the major advantage over everyone else. Now, it is possible that studies will change the fertility rate as the world changes, okay? But I'm saying that given the current state of things,
Starting point is 00:38:55 Israel, their growth trajectory is very, very high. But then the question then is, okay, why is it that Israel, they are different, from everyone else. And the answer is because the world hates them. Because they think they are different from everyone else
Starting point is 00:39:20 and they must unite together to survive. So in Israel, fertility is status. Okay? If you are a woman and you give birth to a lot of kids, that means that you love Israel.
Starting point is 00:39:39 That means that you are doing what you can in this war for survival. It means you are a patriot. Okay? But this has to be with religion. So what the West has done is not only has it created a dating game where a woman can choose to have kids, but the Western world has also given up on religion and embraced materialism. Right? So what is valued in our world in the West,
Starting point is 00:40:17 it's not patriotism or love of family or religious duty, it's just how many Instagram followers you have. It's how many YouTube subscribers you have. It's how much money you have. Okay, that's all that matters. So given the current state of events, it's very hard for the Western world, Western world and really for China to survive for the next 50 years okay I and I know
Starting point is 00:40:47 like well China has a billion people so even though um you know we're only giving birth to 10 million kids a year which we'll still be around for a long long time okay so at this rate by 2100 China will be at will be at a population about 600 million that's still a lot of people man okay here's a problem though okay this is South Korea okay South Korea is like the worst-case scenario and for South Korea this is actually the best case scenario where okay given current trends and let's let's just pretend that that that happens with South Korea well by the year 2100 you know you have a situation like this
Starting point is 00:41:30 where the vast majority of people are over 65 and you have no kids okay that is a zombie society where no one works and everyone just I don't know, walks around the park every day. No one works, so the economy has collapsed. Okay, so look at this trend where we are now in here, okay? With the majority, it's still a working population, which is good. You need that for the economy, but by the time you hit 2040, okay, you've got this huge dependency and a creating population, okay?
Starting point is 00:42:05 Do you guys see this where we are? And, so we're at 2020, right? Okay. Alright, so it's still not too bad, but by the time you get 2040, look at this. Okay, look at this, Matt, look at this, where you have absolutely no kids, and then you have lots and lots of retirees. Okay? And then, by then you hit 2060, oh my God, right? Your population, your working population has decreased by half, by 50%.
Starting point is 00:42:37 All right? So if things are staying the same, if nothing happens, South Korea will be, will be dead in, I don't know, by 2150, okay? Best case scenario. But what we know from history is that society should not die naturally. Eventually South Korea will be forced into wars, economic crisis. So this trend was, will just increase. And so if North Korea got past 2080, I'd be very surprised, okay? I'd be surprised by 2040,
Starting point is 00:43:20 South Korea were to face, collapse, as a nation state. Because you need these people to work, but guess what? You also need to fight wars. So if North Korea ever threatened South Korea, most of your adult population would be dead. Okay? So South Korea cannot fight a war now.
Starting point is 00:43:42 The prospects for South Korea is utterly hopeless. There's nothing South Korea can do about this because South Korea is an extremely materialistic society where the only way to get ahead is by making a lot of money, okay? And if you're a middle class person in South Korea, it makes no sense for you to have three kids. It makes sense for you to have one kid and put all your resources
Starting point is 00:44:08 into this one kid in the hopes that he passes the college examination, gets into a good university, and then gets a good job at Samsung, which is the only company in South Korea, okay? Samsung. Right, so the situation is pretty dire in South Korea. All right. Okay, that's it for today. Any questions, guys, about what we've learned? Okay.
Starting point is 00:44:40 Speaking of my place. So for the last graph that we talked about Israel, and I've noticed that the Saudi Arabia that is also like at half, not bad GDP per capita and fertility. But for Saudi Arabia, maybe I'm wrong, like stereotypically that they didn't receive much hate as Israel these. So why did they like at that? similar position as this rule.
Starting point is 00:45:12 That's actually a really good question, okay? All right. So Saudi Arabia, as you can see from this map, has, it's a very wealthy society, and families have about four kids on average. All right, so Saudi Arabia is actually an outlier. And the reason why is that it gets all the money from oil, oil revenues. Okay, so it sells with oil around the world.
Starting point is 00:45:40 What does it do? It's a welfare state using this oil. So you're incentivized to have many children as possible because the government will pay for it. Free schooling, free healthcare, free housing, and then a guaranteed job. So it's basically like socialism. It's also a Muslim country, so you have this religious duty imperative to have as many children as possible.
Starting point is 00:46:07 But the problem with Saudi Arabia is the idea of human capital. where it is not really a martial society in which people are well educated and they're contributing to the economy, okay? Saudi Arabia just gets all its money from oil and that's it. It's trying to grow terrorism, it's trying to develop its human capital,
Starting point is 00:46:31 but it doesn't really work, okay? So you're right in that Saudi Arabia, it is, it seems to be doing well, but it's not really, okay? But also, like, people will argue about Israel as well. We're like, well, Israel gets all its money from the United States. And it's the American military that supports Israel. That's true to a certain extent.
Starting point is 00:46:54 But I would argue that you'd actually go to Israel, you will see that as an open dynamic society in which you're allowed to ask questions, which you're allowed to criticize the government, in which you are given a lot of opportunities for social mobility, okay? Israel has democracy, it has innovation, it has technology, okay, and Saudi Arabia doesn't have these things. If you want to be a really strong nation, then you need innovation, you need openness, you need technology, okay?
Starting point is 00:47:31 It's also really highly educated, right? It doesn't make sense. So Saudi Arabia, it's really an outlier here. All right, but the problem is what happens if a Saudi Arabia runs out of oil, right? Well, there's a war in the Middle East. And Saudi Arabia is kind of screwed. All right. But you can also argue, no, well, you know, Saudi Arabia, it has a lot of money and maybe, okay?
Starting point is 00:47:58 So game theory doesn't give us the answers. Game theory, it just gives us a guide to ask questions and do research. Okay, doesn't make sense. Yeah. I'm sorry about like when is this data. It's wrote about 2009, right? So how about now? Did it change a lot or like is there anything change?
Starting point is 00:48:28 Um, okay. Okay, yeah. So you asked about the sourcing of the data. Okay, and you're right in that there would be fluctuation, okay? But this is 2024, okay? 2024, and this is Israel right here. Okay? All right, so if it's red, it's above replacement.
Starting point is 00:48:57 All right, and if you just Google Israel population fertility rate, Israel is the only wealthy nation in the world that has an above replacement fertility rate, okay? All right. Okay. Any more questions, guys? All right, great.
Starting point is 00:49:22 So I will see you guys next class.

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