Left Intentionally Blank

It irks me no end to see Yanis Varoufakis, the Greek ‘Finance Minister’ under Syriza, persistently referred to in the press — even on the left — as a game-theorist, when his published position on game theory is very far from being an uncritical endorsement.

To quote from Game Theory: A Critical Text (2004):

As a glimpse of game theory’s increasing confidence, we cited two prominent game theorists’ explanation of the attraction:

Game Theory may be viewed as a sort of umbrella or ‘unified field’ theory for the rational side of social science… [it] does not use different, ad hoc constructs… it develops methodologies that apply in principle to all interactive situations. (Aumann and Hart, 1992)

To overcome the reader’s suspicion that such exuberance was confined to game theory’s practitioners, we also cited Jon Elster, a well-known social theorist with very diverse interests, whose views on the usefulness of game theory did not differ significantly from that of the practitioners:

[I]f one accepts that interaction is the essence of social life, then… game theory provides solid microfoundations for the study of social structure and social change. (Elster, 1982)

(Varoufakis & Hargreaves 2004 1.1.1)

What Varoufakis and Hargreaves noted was the overinflation, if not imperialism, of claims commonly being made about game theory both by the gamers themselves and the social scientists they had influenced, and so together they set about evaluating such claims.They did so from a position of immanent critique, which is to say that they deployed the methodology of game theory in order to demonstrate the insufficiency of its basic assumptions and presuppositions. Particularly damning was game theory’s reliance on methodological individualism and a human subject figured as nothing but a preference-ranking. One of the implications of this dependency (on what is basically a liberal ‘tradition’ of assumptions comprising a set of individualist and preferentist theories of value) is that the ideological underpinnings of game theory undermines its claims to universality and throws into question its understanding of human behavior.

[We] felt that game theory’s further substantial contribution was a negative one. The contribution comes through demonstrating the limits of a particular form of individualism in social science: one based exclusively on the model of persons as preference-satisfiers. This model is often regarded as the direct heir of David Hume’s (the eighteenth-century philosopher) conceptualisation of human reasoning and motivation. It is principally associated with what is known today as Rational Choice Theory, or with the (neoclassical) Economic Approach to social life (see Downs, 1957, and Becker, 1976). Our first edition’s main conclusion (which was developed through the book) was that game theory exposes the limits of these models of human agency. In other words, game theory does not actually deliver Jon Elster’s ‘solid microfoundations’ for all social science; and this tells us something about the inadequacy of its chosen ‘microfoundations’.

(Varoufakis & Hargreaves, 2004, 1.1.3)

It’s my contention that a number of references to Varoufakis as a ‘game theorist’ in the press are simply the result of lazy research and bad journalism. It’s as if you could summarise an economist’s credentials merely by noting he co-authored a book called ‘game theory’. This won’t do. It isn’t enough just to look at the titles of published works to establish a person’s position on anything; perhaps it serves better to read past the title and take a look at what they are actually saying. Varoufakis is far better characterised as a critic of game theory.