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Game Theory #4: The Immigration Trap

Original Transcript

Today we will look at immigration. Who wins the game of immigration and who loses? Why do they win? Why do they lose? So let's look at the United States, which is where most immigrants go. And as you can see from this chart, there are certain ethnic groups that do better than other ethnic groups. The Indian people make the most money in America. This makes sense because India has a very competitive college system where only the best and brightest get into their technical institutes, and then after college they go to the United States to do graduate work, then go on to Silicon Valley to become engineers, some become doctors. Indians as a demographic are very successful. Then you have the other Asian groups — Japanese, Korean, Filipino, Chinese — who also do very well. East Asians do very well in school and are known for being very hard workers. White people are the majority and they are the average, making about seventy thousand US dollars a year. But then what's troubling is that as you go lower, you find certain ethnic groups that don't do well economically — including Mexicans, Latinos, as well as Black Americans who traditionally have been slaves in America.

So the question for us today is: why is it that certain ethnic groups, specifically East Asian groups, do well economically, and other ethnic groups, specifically Latinos and Blacks, do not? The traditional explanation is that certain cultures prize education more than other cultures. In fact, some extremists will go on to say that genetically East Asians are just smarter than everyone else.

This is the PISA rankings from 2018 — the Programme for International Student Assessment. Every three years, the OECD organizes tests for fourteen-year-olds in three subjects: math, science, and reading. Based on these results, the OECD — which is primarily concerned with economic development — forecasts a nation's ability to do well economically in the next ten, twenty, or thirty years. The nations that do really well are primarily in East Asia: Japan, South Korea, Vietnam, China. That's why a lot of people believe that in the future, East Asia will come to dominate the world economically. Then you have nations in red that will suffer economically — Latin and South America, who traditionally have not done very well on the PISA. You also have Africa and the Middle East. Another way to group the underperforming nations is by religion — Muslim-majority countries tend not to do well on the PISA, and that's why there is great concern that Islamic countries will fall behind economically.

Another concern is immigration. Immigrants from Latin and South America have been moving to the United States, and people from Islamic nations have been moving to Europe. A lot of this immigration is driven by war — nations like Libya, Syria, Afghanistan, and Iraq have been destroyed because of America's war on terror, forcing millions of refugees to seek better opportunities in Europe. This is causing a lot of conflict because on one hand these immigrants don't do well economically, and on the other hand they're moving to very wealthy nations.

So from the PISA rankings it seems as though East Asians will come to dominate the world. The problem is that when you actually look at American society and look at who succeeds, it turns out East Asians don't do as well as you'd think. If East Asians are the best students in school and they go to the most prestigious colleges and they are the smartest with the highest IQ, you would think they would come to dominate American society. But that's not actually true. This chart of new CEOs shows that from about two thousand American corporations, they tried their best to bring in more diversity into the corporate boardroom. Traditionally, CEOs of American corporations have been white, middle-aged men. So they're trying to diversify the leadership. It turns out that white women have done the best — white women have been the most successful in climbing the corporate ladder in America. Latino and African-American men do okay, not great, but okay. And who is underperforming are East Asian men.

One reason is DEI — Diversity, Equity, Inclusion — which aims to redress historical wrongs, including the fact that women and minorities have been discriminated against in American society. You can argue that because of DEI, East Asian men have been disadvantaged because historically people believe East Asian men have not been discriminated against, even though that's not correct.

But another way of understanding this is to figure out who succeeds in corporate America. Successful CEOs tend to be aggressive, or assertive. Another way of saying this is that they have high risk tolerance — they take chances. Also, to navigate corporations you need high EQ, emotional intelligence, empathy, and collaboration skills. These are the skills you need in order to do well in American corporations. And unfortunately, the stereotype is that East Asian men don't actually have these skills. East Asian men tend to be much more individualistic, more cautious, and they tend not to speak a lot. East Asian men are not known for being articulate, which is something you need in order to do well in a corporate boardroom where there's a lot of debate, a lot of argumentation, where you have to present your view and your opinion very coherently.

So what's interesting is that the skills you need to do well in the corporate boardroom, East Asian men don't have. And you can also argue that it's because East Asian men have other skills that allow them to do well in school — they are more focused, more grade-obsessed, more compliant, more obedient. They like listening to authority, and that's why they do well in school. But what this means ultimately is a situation in which even though East Asian men do well economically and academically, their status in America is not as great as their income would suggest. In fact, you could make the argument that East Asian men are among the groups with the lowest status in America.

The evidence bears this out, especially in the dating market. Remember, what men want to do is obtain status so that they can find the most attractive mate. Statistics from OkCupid, one of the more popular dating websites in the United States, show the following: if you are an Asian female and an Asian man gets in touch with you, about twenty-two percent of Asian females will respond to a first message if the person is an Asian man. But if it's a white guy, there's more interest — twenty-nine percent. That's a pretty significant difference.

Looking at white women and how interested they are in other ethnicities: if you are Caucasian, white women are most interested. If you're Black, they're not as interested. If you're Hispanic, they're not interested. But if you're Asian, they are the least interested. However, if you are an Asian woman, you're pretty interested in white guys, most interested in Asian guys, and similarly interested in Black and Hispanic guys. So it seems that in the dating market, one group that is most discriminated against is East Asian men. Another group that is also heavily discriminated against is Black women.

Looking at marriage patterns, twenty percent of East Asian women will marry white guys. So if you are an East Asian woman, you are attracted to white guys and to East Asian guys primarily. But if you are an East Asian man, you're not that attractive to white women. Twenty percent of East Asian women will marry a white person, but only nine or ten percent of Asian men will marry a white woman. This leads to a disparity in the marriage market, meaning that for East Asian men under twenty-five years old, seventy-five percent are single — they cannot find a date or a partner.

Studies about the dating market in America arrive at a very stark conclusion. A white woman is more attracted to a white man than to an Asian man. How do we know this statistically? If a white man makes sixty-two thousand dollars a year, for an Asian man to be equally attractive to that white woman, the Asian man needs to make three hundred thousand dollars a year. That's a huge difference. In other words, a white woman will be attracted to the average white guy, but she will only be interested in the highest-earning Asian guys. These Asian guys have to be a surgeon, a top lawyer, or an entrepreneur in order to be attractive to just the average white woman — not even the most attractive white woman.

So you have a really strange situation where East Asian men did everything right. They did exactly what they were supposed to do: went to school, worked hard, got the best grades, then worked hard at their jobs and did very well. But two things have happened because they followed the rules. One is that they're not able to climb into status positions in America — they're not CEOs. The other is that they have problems finding a very good mate. It's easy for them to find someone at their status level or below, but it's very hard for an East Asian man to actually marry up and improve his status and socioeconomic standing in America.

So let's look at this disparity. East Asian men do well in school, have good jobs, are not on welfare, don't go to jail. You look at other minorities — specifically Hispanic, Black, and Muslim — and they don't do as well in school, don't make as much, are more likely to be on welfare and more likely to go to jail. You would think that East Asian men will ultimately triumph in the end. But what is really disconcerting is that according to game theory, East Asian men are playing the game wrong. Whereas these other groups — Hispanics, Blacks, Muslims — are much more likely to win the game.

The explanation is actually pretty straightforward, though disturbing. The answer is: if someone invites you to play his game, don't agree to play by the rules, because the game is set up so that you will lose. Otherwise, why would he invite you? Think of a casino. A casino is like: please come in and play our game. Do you think a casino is fair? If the casino were fair, the casino would go bankrupt. The casino is set up so that you have to lose — otherwise they go out of business. The same thing with immigration. If a nation like the United States is inviting you into their nation and you play by their rules, you will always lose. And this is what's happening to East Asian men — they go to the United States, they play by the rules, and they'll never climb into status positions, and their most attractive women will be married off to white men, while East Asian guys will make their money and stay home and play video games. The game is rigged.

So the only logical strategy according to game theory is to break the game, to cheat. And that's what the other minorities are doing. How do you do that? You don't play the game. You don't go to school and obey the teacher. How to win is by sticking together and having lots of babies. Over time, that will enable you to win the game because of demographics. You're much better off not going to school, being poor, but staying together, being cohesive, and having lots of babies rather than going to school, getting a good job, and doing everything you've been told to do. Because ultimately, your energy will be stolen from you because of the rules of the game.

So again, immigration is very important because all over the world poor people are going to rich countries to seek better opportunities — primarily the United States, Canada, Australia, New Zealand, and Europe. And the countries sending people to these places are China, East Asia broadly, Latin America, Africa, and the Middle East. And again, you have a situation where East Asians are much more likely to go and conform, but then you have other groups that go and refuse to conform. From a game theory perspective, it is better in the long term not to conform, not to play by the rules of the game, than to actually play by those rules.

An example is in Europe. Europe has a large Muslim immigrant population. These Muslims are less likely to integrate. They don't do very well in school, but they will claim welfare and they will have lots and lots of babies, which is a drain on the economy of these nations. What this means is that by the year 2050, in Sweden twenty-five percent of the population will be Muslim, in the UK seventeen percent, in France seventeen percent, in Germany eleven percent, in Italy twelve percent. So it seems as though there's a population replacement going on. Not only that, but because Muslims are much more likely to have more children than Europeans, the Muslim populations will be younger and more energetic, whereas Europeans will be much older and likely retired. If this trend continues, Europe will eventually be taken over by the Muslim minority.

So Muslims don't do well in school and don't make that much money, but look at their advantages: they are cohesive because of their religion, they are energetic because they are young, and they are united — partly because the Europeans don't really like them and treat them as outcasts. If trends continue, it is most likely that Muslims will control Europe in twenty-five years' time.

Look at America. By 2050, the white population will no longer be the majority. Asians are increasing by a bit, but not that much. The real growth is in Hispanics — in absolute numbers, and again they're a much younger and more energetic group more likely to have children. And they are united because they are Catholic — a common religion, a common language, very similar cultural traits.

So according to game theory, if you're an immigrant, your best strategy is not to do well in school and make a lot of money. That will get you nowhere — you're just playing by the rules of the game. Your best strategy is to stick together with your ethnic group, have lots of babies, maintain your religion, and over time your children and grandchildren will come to dominate the nation.

The problem with this is that there is no way the majority — white people — will just sit back and let this happen. You're going to have a lot of violence and a lot of conflict because from the white perspective, this is population replacement. If we just let demographic trends continue, if these outsiders just have a lot of kids and we don't, then eventually our culture will be destroyed. And historically, they're right.

Let's talk about some history. After the ice age, hunter-gatherers spread around. But then because the earth was warming, this allowed for agriculture, and a new group came into being focused on agriculture. These farmers arrived primarily in Anatolia, the Levant, and Mesopotamia because that was the warmest part of the globe most amenable to agriculture. Because of climate change, they were eventually forced to migrate. A lot migrated to Europe and forced out the hunter-gatherers — it was not violent at first because hunter-gatherers have few people and can move about. But eventually the farmers displaced the hunter-gatherers. Some farmers also went into the steppes, but since the steppes are grassland you can't easily farm there, so they developed a new economy called nomadic pastoralism — raising sheep, goats, and cows and migrating from one area of grassland to the next. As a result they became very strong and aggressive people. Because of overpopulation and climate change, these people — the proto-Indo-Europeans — were forced to migrate to Europe. And when they did, there was a war lasting hundreds of years in which the nomadic pastoralists displaced or eliminated the farmers. We know from genetic studies that the European farmer men were killed and the women were taken as brides, basically as slaves. This is population replacement, and historically this is what happens: one group comes in and replaces the other.

Throughout most of human history, this is a constant cycle — the steppes were extremely violent and chaotic, forcing groups to constantly migrate in search of safety, and each time there is population replacement. Primarily in the elite. Because there can only be one elite, one elite must replace the other.

So if this is historically the situation, how did we get to a world where immigration has become the norm? Before, the belief was that you have to stay together as part of your group otherwise you'll be eliminated. Now we believe that if you don't like where you are, it's okay to just get up and move somewhere else for better economic opportunities. This shift in mindset came about because of the British Empire and later the American one.

Spain, because of the Ottoman Empire, could not access the East Indies trade. It had to figure out new ways to access East Asia, China, and India because that was where the spices were. Spain and Portugal started charting new territories and discovered South America — where there was a huge population and a lot of mineral wealth in silver and gold. They could go over there and enslave the population and convert them to Catholicism. Britain later played this game as well. But in what became the United States, there was no large population to enslave and there were a lot of aggressive indigenous peoples. So the solution was: after independence from Britain, the United States welcomed immigrants from Europe — specifically Ireland, Germany, Poland. The reason was they needed to displace the natives. Immigrants were then encouraged to go to Canada and Australia to build those economies as well.

In other words, immigration today is a historical accident. Americans were responding to the specific needs of that time: they were a small population against a hostile people in a very large area, and they needed people to come and farm and industrialize. That's why America welcomed immigrants. And this was new in human history — usually if you went to a new place, you went because you were a slave, conquered in war and sent as cheap labor. America welcomed you as a citizen if you were willing to contribute and allowed you to get rich if you worked hard.

Fast forward — America becomes an empire, accumulating all this energy. Then World War II comes and America triumphs. Now America can set the rules of the game for most of the Western world. America said to Europe: you fought wars, you had fascism, because you are a closed society. A closed society means you don't want immigrants, you're nationalistic, and therefore you are violent. America won the war because America is an open society that welcomes immigrants, a multicultural society that encourages people to get rich and be happy. So America told Europe: if you want to be like us, if you want to prevent another World War II, you have to become an open society and welcome immigrants just like we do. And that's why we have the situation today where Muslims are going to Europe and others are going to America.

What we need to recognize is that immigration is a new game developed because of certain historical circumstances, but it's not sustainable in the long term. The idea that you can just work hard in school, then go to America and become wealthy — that can't be true anymore. In the future, according to game theory, what's going to happen are violent conflicts between demographic groups because each group is trying to set the rules of the game. Because whoever sets the rules of the game will always win — they have access to the best jobs, the highest status, and access to the most attractive mates, which is ultimately what every man is looking for.

A student asked: can we really do something about the current immigration situation, or do we have no ability to change it? The problem is that immigration is not natural. If you're born into a community, what is natural is for you to want to help this community grow and develop. What is not natural is to say: this community sucks, I'm going to find a new community — because if everyone did that, no communities could ever exist. So ninety-nine percent of people's natural inclination is to want to work hard and make the community a better place. You're always going to have maybe one or two percent who are different and can't conform to the community. Historically these people have often had to leave. But that's only a small group.

What's natural is for people to want to stay where they are because they love their neighbors, their family, and they want to help the community grow stronger. Unfortunately, because of globalization, mass media, and the internet, young people believe that what's important is their own individual happiness and economic opportunity. The very best Chinese students are like: I'm probably going to make more money in the United States, so I'm going to work hard, then immigrate, start my own company, and get rich. And some people succeed at that. But if you think about it, this is not good for China as a nation. Why would you encourage your best and brightest to take their skills, move somewhere else, and contribute to that economy rather than your own?

We are in a very strange situation, and we are in it because for the longest time America was a global hegemon and could write the rules of the game. Whoever writes the rules of the game will always win. Globalization was a system so that America could extract resources from the world, including talent. The best and brightest go to America because that's where they're most likely to thrive. But now the world is changing — America is no longer the sole global hegemon. Russia and China are rising as well. Nations are now much more interested in retaining their human capital. If you're born in China, your priority ought to be how to make China a better place — not how to get a visa to study in the United States.

And look, the reality is that if you go to the United States, you can make a lot of money, but you're still going to be low status. That's the situation I found myself in in North America. I went to Yale and I could have made a lot of money as a lawyer or a doctor, but I recognized that if I just stayed in America, I would never achieve high status. I may be wealthy, but I would never achieve the status my potential warranted. That's why I chose to come to China — I thought there were more opportunities to obtain higher status in China than in the United States, where I'm East Asian and there are a lot of stereotypes and prejudice against me. And quite honestly, I was right in my assessment.

If you're East Asian in America, according to game theory, you're mostly stuck where you are. There are certainly thousands of very happy East Asians who married well and have very good lives. But for the majority, you can have decent lives, but you're always going to be relatively low status. And a lot of East Asians are happy with that situation — just getting by, making good money, not worrying too much about status. But the problem is that their children and grandchildren face a harder situation, because it's going to be very hard for them to marry up. There are already a lot of East Asian men who are single and have difficulties in the dating market.