Profiting from Conflict — The Monkey and the Cats

This question has bothered me for a long time: Why are there riots and other forms of social unrest in India? Are Indians intrinsically unsocial or is there a structural reason for this? What is it in its political makeup that there is inter-group conflict? I explored that question in a piece I wrote for Niti Central a few days ago. I am posting it here, for the record.

Profiting from Conflict — The Monkey and the Cats
{Previously published in NitiCentral on 26th Nov.}

As a child, I had read that tale from the Panchatantra about two cats fighting over the division of a piece of bread and the monkey who mediated in that conflict. In the usual telling of the story, the monkey ends up eating the entire piece of bread and the cats get nothing. I had learned the obvious moral of the story then as a child but it took me some years before I could appreciate the full implications of that tale.

The monkey’s opportunistic behaviour and the stupidity of the cats are plainly obvious. In the story, the cats are already in a quarrel and the monkey cleverly uses the opportunity to profit. If there had been no quarrel, the monkey would not have got all of the bread leaving nothing for the cats.

Fables are models. They essentially model human behaviour and explicate the interactions between humans concisely. Economists too do it with models (as the witticism goes). You could say that economic models are also fables and quite frequently their models are also fables with moral implications. Morality and ethics is a central concern of economics.

Adam Smith, the father of what is called classical economics, is known for his most influential book An Inquiry into the Nature and Causes of the Wealth of Nations which was published in 1776. However, the book that Smith considered superior to it was his first book The Theory of Moral Sentiments published in 1759, which explored the moral and ethical foundations of societies. Economics can be considered to be a specialised branch of moral philosophy. Strictly speaking, economics is the study of human behaviour. The vocabulary of modern economists often reveals that fact: moral hazard, adverse selection, etc.

Now let’s get back to the cats and the monkey. The cats were fighting perhaps because one or both were greedy and wanted more than the fair share. Or perhaps they were both fair minded but could not agree on what a fair division was. In any case, the monkey enters the picture to arbitrate and settles the dispute to its advantage. From its point of view, cat conflicts are profitable. But what if the cats never had a dispute or had settled it themselves when it arose?

That is the lesson I learned later: that an unscrupulous monkey would have an incentive to provoke the conflict in the first place so that it could be called in to arbitrate. It could persuade each of the cats that the other cat was greedy and wanted to take more than it deserved. Having poisoned their minds, the monkey’s role then becomes indispensible. It would claim that without it, there will be no justice, peace or fairness in cat society. In short, it would settle down in the role of the government, dispensing justice, overseeing the just distribution of bread and maintaining the peace.

Now let’s extend this monkey-cats model. What if the cats grow wise and figure out that fighting is not a good thing. Suppose they come up with a rule that ensures fairness in the distribution of bread. One such rule is the “you cut, I choose” rule. The cat which divides the bread now will cut it so that it is happy to have either of the pieces – and hence has the incentive to be as fair as it can. That leads to no conflict, and no monkey business. The moral of this story is that it is better to settle the disputes bilaterally and not invite a third party to arbitrate if that third party has (or develops) an interest in prolonging the conflict.

Let’s consider two countries, A and B, engaged in a costly conflict over some issue. Both buy weapons from country C which is hugely profitable. If hostilities between A and B were to cease, it would be a loss for C. Therefore, C has an interest in the continuation of the conflict. It has an incentive to intervene and help prop up either of the countries which is in imminent danger of defeat. In general, C will help the weaker of the countries so that the conflict does not end.

Wars are generally very costly for most people but are always very profitable for some. It is also not too difficult to start a conflict. Envy, greed and covetousness lie just beneath the surface and can be summoned almost at will. Arms manufacturers and arms dealers have the greatest incentive for provoking, fuelling and maintaining conflict. Follow the money if you want to know why some parts of the world suffer chronic conflict.

Conflicts need not be hot – in the sense of on-going regular battles fought with planes, tanks, guns and bombs. Even a “cold war” is quite profitable: trillions of dollars were spent in the immense build-up of arms and ammunitions in the global superpower conflict. The military-industrial complex that US President Eisenhower had warned his compatriots is a reality. The tactic employed was as simple as it was effective: keep the citizens in a state of fear and suspicion.

The sad thing is that the counterpart of conflict – hot or cold – among countries is also seen within countries, especially in those which are cursed with particularly poor governance. Civil wars are quite common. Hot civil wars are naturally bad but there are what one might call “cold civil wars.” A cold civil war is a low level chronic conflict that occasionally leads to localised hot conflict in which a few hundred people die routinely.

For a cold civil war, you need a combination of factors. First, you need to have two or more identifiable groups within the country. Then you convince at least one of the groups that its interests, if not its very existence, is threatened by the others. Finally, you position yourself as the protector of the threatened group. In short, sell them a problem and then sell them a solution.

This kind of cold civil war is immensely costly to the country. But it is very profitable for those who depend on the continuation of the conflict. Mostly imaginary fears are magnified and the resulting paranoia exploited.

You may be able to recognise this in the context of India. During the waning period of the British Raj, the Muslims of the Indian subcontinent were mobilised by their leaders to suspect non-Muslims and that led to the creation of Pakistan. The two countries and the inter-country wars that followed were profitable for arms manufacturing countries. (I have modelled the India/Pakistan conflict on a little party game called a “dollar auction.”)

Pakistan and India are different in two very salient aspects. First in terms of their respective minorities. And second, in the style of governance. Pakistan started with a minority non-Muslim population but over time has been able to nearly eliminate them. The few that remain are essentially cowed down and don’t really matter. Pakistan’s governance structure is nominally democratic (at least at times) but it is de facto a military state. They have elections but these don’t require the politicians to promote any group paranoia within the country to win elections. All they have to do is to point to non-Muslim India and repeat the same old message that India wants to destroy Pakistan.

India, in sharp contrast, has a sizeable Muslim population. And India is a real democracy (whatever its merits) compared to Pakistan. India’s Muslim population is sizable enough to make a difference in the electoral fortunes of any political party that gets that vote. So to get that vote, the same formula used during the British raj is employed: convince the Muslims that they have problems; that the non-Muslims are at the root of their problems; that they need protection and which protection can only come from this political party.

This leads to what I consider to be a perpetual “cold civil war” in India. The Muslims are frightened into believing that they are in existential danger, just like their ancestors were and some of whom left India for the safe haven of Pakistan. Political parties that profit from this are the monkey that steals the bread.

To reiterate, the moral of the fable is this: don’t have a stupid fight in which you invite a self-serving third party to intervene. Nehru, if he had read that fable, evidently did not understand it. But his inheritors have been very profitably playing the role of the monkey. Monkeys profit and impoverish cats but can only do so because the cats are stupid.

How does one stop monkeys from stealing bread is a matter that I shall take up in the next part of this essay.

{The next part of this essay is “Constitutions and the Generality Principle“.}