[OUTLOOK]A beautiful world takes cooperation

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[OUTLOOK]A beautiful world takes cooperation

I saw the movie "A Beautiful Mind" last weekend. I was impressed by the troubled genius of the mathematician John F. Nash (1920-), the love between Mr. Nash and his wife, their efforts to overcome his mental illness and his glorious triumph in winning a Nobel prize for economics. After watching the movie, I thought about other geniuses in mathematics and economics, game theory and the trade policy of U.S. President George W. Bush.

I first thought of conflicts and cooperation between geniuses. When Mr. Nash was a graduate student, he came to see John von Neumann (1903-1957), his academic adviser and the originator of game theory, and presented an idea that was critical to the theory in its current form. But Mr. Nash's idea received a cool reception by Mr. Von Neumann. Mr. Nash then completed a doctoral dissertation under the direction of another professor. The 27-page dissertation, written when Mr. Nash was 21, developed the remarkable game theory and eventually gave him his Nobel prize 44 years later. But Mr. Nash did not study game theory any more after the dissertation and the rebuff by Mr. von Neumann.

On the contrary, another mathematical genius, Frank P. Ramsey (1903-1930), left some important economic work in full support of the renowned John Maynard Keynes (1883-1946). Coincidentally, Mr. Ramsey was born in Britain the same year as Mr. von Neumann. When young Mr. Ramsey sharply criticized Mr. Keynes' theory of probability, Mr. Keynes recognized the genius of Mr. Ramsey and treated him as a colleague, though Ramsey was 20 years younger. Mr. Keynes encouraged Mr. Ramsey and gave him a post to enable him to begin further study of economics. Mr. Ramsey's three economics papers marked a new epoch respectively in information economics, tax theory and economic growth theory. Unfortunately, he died at only 26. Many economists say that if Mr. Nash and Mr. von Neumann had worked together, - had cooperated - and if Mr. Ramsey had lived longer, economics would have developed much more rapidly.

It is interesting that Mr. Nash's game theory shows that it is very difficult for companies and nations as well as geniuses to cooperate with each other. Mr. Nash regarded noncooperative games as more realistic and said the equilibrium at those games (Nash Equilibrium) are common phenomena. And he regretted that they are.

U.S. President George W. Bush, who has recently imposed heavy tariffs on steel imports to protect his nation's steel industry, could gain a good lesson from Mr. Nash's theory. Even though it is difficult to make and keep a cooperative relationship, individuals and groups should try it. For, as Mr. Nash said, working together can cause great benefits to individuals or societies. In the movie "A Beautiful Mind," Nash stressed this idea to his friends, when he explained the strategy of dating female students.

According to Mr. Nash, if each male student responded to his selfishness, none would be partnered with the female student he wanted. But if a male student chose a cooperative strategy, he would see better results. Mr. Nash boasted his theory surpassed the limit of classic economics founded by Adam Smith (1723-1790), who only stressed the selfishness of human beings.

If Washington imposes tariffs of up to 30 percent on steel imports for selfish purposes, other countries will retaliate by restricting agricultural products or films imported from the United States.

Then, U.S. companies will not be able to buy Korea's low-price, high-quality steel, and Korean citizens will not be able to see good Hollywood movies such as "A Beautiful Mind." Finally, the exports of every country will decline, which will in turn cause a reduction in national income and an increase in the jobless rate.

In order to prevent these declines and to work together, countries should remove trade barriers in cooperation.

Mr. Bush should not neglect the lessons of game theory. He should withdraw the safeguard measures in order to cause great profits to the United States as well as other countries. Washington should remember that one of the chief causes of the Great Depression of the 1930s was the trade war triggered by a U.S. protective trade policy.


The writer is director of the JoongAng Ilbo Economic Research Institute and an editorial writer.

by Ro Sung-tae

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