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Afghanistan and the Common Knowledge Game

Summary:
Afghani president Ashraf Ghani in happier times, before fleeing Kabul with “four vehicles and a helicopter full of cash” For many months now, the US government knew that the Afghan government would fall to the Taliban. For many months now, the Afghan government knew that the Afghan government would fall to the Taliban. For many months now, every NGO, every foreign government, and every Afghani citizen knew that the Afghan government would fall to the Taliban. For many months now, EVERYONE knew that the Afghan government would fall to the Taliban, and that there would be tens of thousands of Afghani citizens and thousands of US and NATO ally citizens who would need to get the hell out of Dodge when that happened. And yet for many months now, nothing much happened to

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Afghanistan and the Common Knowledge Game
Afghani president Ashraf Ghani in happier times, before fleeing Kabul with “four vehicles and a helicopter full of cash”

For many months now, the US government knew that the Afghan government would fall to the Taliban.

For many months now, the Afghan government knew that the Afghan government would fall to the Taliban.

For many months now, every NGO, every foreign government, and every Afghani citizen knew that the Afghan government would fall to the Taliban.

For many months now, EVERYONE knew that the Afghan government would fall to the Taliban, and that there would be tens of thousands of Afghani citizens and thousands of US and NATO ally citizens who would need to get the hell out of Dodge when that happened.

And yet for many months now, nothing much happened to prepare for the mass exodus that everyone knew would be necessary when the Afghan government fell to the Taliban.

When I say that “nothing much happened to prepare for the mass exodus” I am not only saying that official US policy was bizarrely and cruelly complacent here, under both the Trump and Biden Administrations (and so continuing a grand tradition of bizarre and cruel US policy in Afghanistan under the SIXTEEN YEARS of the Bush and Obama Administrations), but that individual behaviors by the Afghans and non-Afghans who would need to flee the Taliban were pretty complacent, too. I know the visa process was a byzantine joke. I know that 99% of the “blame” here lies squarely on 21 years of misbegotten US policy. And yet.

EVERYONE thought that the Afghan government would fall to the Taliban, and EVERYONE thought that they had plenty of time to square things away. Until they had no time at all.

Why?

The answer is the Common Knowledge Game.

The answer is that mass social behaviors do not change on the basis of private knowledge, no matter how ubiquitous. Behavior doesn’t change based on what everyone knows.

Behavior changes based on what everyone knows that everyone knows.

We’ve written about the Common Knowledge Game a lot in Epsilon Theory, starting in the original “Manifesto” and continuing with notes like “A Game of Sentiment” and “When Does the Story Break” and “Sheep Logic“. Most recently we wrote about the Common Knowledge Game in “Harvey Weinstein and the Common Knowledge Game“.

The classic example of the Common Knowledge Game is the fable of The Emperor’s New Clothes. Everyone in the teeming crowd possesses the same private information — the Emperor is walking around as naked as a jaybird. But no one’s behavior changes just because the private information is ubiquitous. Nor would behavior change just because a couple of people whisper their doubts to each other, creating pockets of public knowledge that the Emperor is naked. No, the only thing that changes behavior is when the little girl (what game theory would call a Missionary) announces the Emperor’s nudity loudly enough so that the entire crowd believes that everyone else in the crowd heard the news. That’s when behavior changes.

And so it was with Harvey Weinstein. Apparently it was no great secret that he is a serial rapist. Apparently everyone in Hollywood was familiar with the stories. It was ubiquitous private knowledge, and pretty darn ubiquitous public knowledge. I mean, if you’re making jokes about it on 30 Rock, it’s not exactly a state secret.

But there was never a Missionary. There was never anyone willing to shout the information so loudly and so publicly that it became common knowledge. That’s what Rose McGowan did, and that’s the power of Twitter and modern celebrity  to establish Missionaries and create common knowledge.

Afghanistan and the Common Knowledge Game

Once that common knowledge was created, once all the private holders of all of Weinstein’s dirty secrets believed that everyone else believed that he is a serial rapist, then everyone’s behavior changed on a dime. His publicists and lawyers and partners and colleagues and board of directors and wife were shocked … shocked! … to hear of his behavior, and certainly would no longer be representing him or working with him or associating with him ever again, even though NOTHING had changed in the information they already possessed.

Exactly the same thing happened in Afghanistan.

The Missionary that transformed the Afghanistan Common Knowledge Game, the only narrative creator with the Missionary power to transform everyone’s private knowledge of the inevitable fall of the Afghan government into common knowledge of the inevitable fall of the Afghan government, was the Biden White House.

When the State Department announced on August 12th that it was removing all remaining non-essential personnel from Kabul within 3 days and was considering a relocation of the US embassy to the more defensible airport, the fall of the Afghan government became common knowledge.

At that point, everyone knew that everyone knew that the Afghan government would fall.

At that point, everyone knew that everyone knew that the emperor had no clothes. There was no more pretending that the US withdrawal would be “orderly” or that it was “highly unlikely” that the Taliban would take Kabul. The time for pretense was gone. Poof. In one nanosecond, the State Department announcement compressed the entire spectrum of possible individual Afghani behaviors into a single rational choice set.

At that point, the only rational behavior by anyone in a position of power within the Afghan army or the Afghan government was to surrender to the Taliban or flee the country.

Immediately.

And so they did.

I mean, they’re not stupid.

But here’s the thing that bothers me: the US Dept. of Defense and the US Intelligence Community aren’t stupid, either.

How is it possible that the world’s preeminent “planning organization” – the US Dept. of Defense – with literally trillions of dollars of resources devoted to the war in Afghanistan, would completely and utterly fail to plan for how the Common Knowledge Game plays out in this theatre? I don’t think it IS possible.

How is it possible that the world’s preeminent “intelligence community” – the NSA and the DIA and the NRO and the CIA and whole alphabet soup of associated agencies – with still more trillions of dollars of resources at their disposal, would fail to identify the catalyzing impact of a State Dept. announcement that the gig was up and the US government was abandoning Kabul? I don’t think it IS possible.

You’ll notice what I’m not saying. I’m not saying that the White House or the US State Dept. are too smart to make a boneheaded announcement of an embassy withdrawal. I’m also not saying that they’re stupid. What I AM saying is that both White House staff and non-career State Dept. staff devote whatever smarts they have to the domestic political ramifications of everything they do. What I AM saying is that the White House does not give a rat’s ass about Afghanistan except as it impacts domestic politics. What I AM saying is that the White House relies on the DOD and the IC to advise them on what’s actually going to happen in a place like Afghanistan if they do this or they do that.

I think the White House got some bad advice and made a boneheaded move.

Or more probably still, I think the boneheaded moves of this White House – designed entirely with an eye towards domestic politics – were met with oh-sure-boss-whatever-you-say indifference by people in the DOD and IC who knew better but were only too happy to see a painful debacle unfold.

The dominant narratives today are all strawmen – intentionally magnified and absurd counterfactuals to which the projected narrative stands in oh-so-bold opposition. You think the Afghanistan endgame was mangled by the Biden White House? Why you must be in favor of Forever Wars! TM. You think the Biden White House has the most coherent and correct policy for Afghanistan of any Administration over the past 20 years? Why you must be in favor of Abandoning Our Allies! TM.

But that’s exactly what I think. I think the Biden White House has the most coherent and correct policy for Afghanistan of any Administration over the past 20 years AND I think that’s faint praise AND I think they completely mangled the endgame because all they think about is domestic politics AND I think the DOD and IC knew better because they of all people understand the Common Knowledge Game.

Everyone is gaslighting everyone. Everyone thinks they are a player.


About Ben Hunt
Ben Hunt
He is the chief investment strategist at Salient, a $14 billion asset manager based in Houston and San Francisco, and the author of Epsilon Theory, a newsletter and website that examines markets through the lenses of game theory and history. Over 100,000 professional investors and allocators read Epsilon Theory for its fresh perspective into market dynamics.

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