Game Theory #14: The Law of Proximity

Predictive History 50min 5 min #133
Game Theory #14:  The Law of Proximity
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Summary

  • Professor Jiang’s March 19, 2026 lecture to his Beijing high school students analyzes the escalating Iran-Israel war through the lens of internal civil conflicts within nations, introducing the “law of proximity” — the idea that people and states are shaped most by the conflicts closest to them (domestic struggles) rather than by geopolitics alone. He argues that the war cannot be understood through traditional foreign policy analysis; instead, the driving forces are internal power struggles in America, Israel, and Iran, each of which makes compromise or ceasefire nearly impossible.

The War’s Current State

  • Israel bombed Iranian oil fields; Iran retaliated by attacking Gulf energy infrastructure, including Qatar, which supplies 20% of the world’s LNG — a major escalation aimed at destroying the global economy by cutting off cheap energy.
  • Iran also struck Tel Aviv with cluster warheads that air defense cannot stop; footage is being censored.
  • Iran confirmed the assassination of Ali Larijani, the de facto head of its war effort — a pragmatic figure who could have negotiated a ceasefire. His death makes a negotiated end to the war almost impossible.
  • Speculation is growing that Israeli Prime Minister Netanyahu may be dead or injured, based on his prolonged absence from public view and the circulation of blatant AI-generated fake videos of him.
  • Both sides are pursuing maximalist objectives: the US and Israel aim to destroy Iran’s state capacity, decapitate its leadership, target civilian infrastructure including water, and provoke ethnic fragmentation (Balkanization). Iran aims to destroy the global economy by attacking GCC energy infrastructure and closing maritime chokepoints (the Strait of Hormuz and potentially the Bab el-Mandeb via Houthi proxies).
  • Flashpoints to watch: Kharg Island (where Iran stores ~9% of its oil for export — easy to take but hard to defend due to coastline and Zagros mountains, creating “mission creep”), Saudi Arabia (whose mutual defense pact with Pakistan could open an eastern front and bring nuclear weapons into play), and potential forced entry of energy-dependent nations like Japan and South Korea.

The Law of Proximity

  • The core concept of the lecture: individuals and nations are always playing multiple simultaneous games (family, school, work, city, nation), but the game that most influences behavior is the one most proximate — the one they can see directly in front of them.
  • Applied to international relations: what appears to be a war between nations is actually driven by conflicts within nations. The internal civil conflicts in America, Israel, and Iran determine how each behaves in this war.
  • This framework is used to answer three questions: How are leaders being killed? Why are they being killed? What does this mean for the war and the world?

Civil Conflict in America

  • Democrats and Republicans both support the war but for different internal reasons: Democrats believe the war’s unpopularity will let them dominate the 2026 midterms and 2028 presidential election, destroying the Republican Party permanently. Republicans are willing to accept an unpopular or losing war because wartime emergency powers let the president suspend or delay elections, and they aim to pass voter ID laws (the “Save America Act”) that historically function to suppress minority voters.
  • The deeper divide is between the “elite” (Democrats, representing Wall Street/finance, favoring the existing global order) and the “counter-elite” (Republicans/MAGA, representing Silicon Valley/AI, favoring America First retrenchment) — a framework drawn on Peter Turchin’s theory of “elite overproduction” leading to civil conflict.
  • Both finance and AI are parasitic bubbles seeking government bailouts: the private credit bubble (~$2 trillion in reckless intercompany lending) and the AI bubble (companies like Microsoft, OpenAI, Oracle, Nvidia circularly lending to each other, heavily funded by GCC investment). The GCC’s inability to continue funding due to the war threatens the AI bubble. The government can only bail out one side, so the two factions are fighting over who controls Washington — if Democrats win in 2028, finance gets bailed out; if Trump stays in power, AI gets bailed out.

Civil Conflict in Israel

  • Israel is deeply divided between Tel Aviv (secular, democratic, cosmopolitan, Western-oriented) and Jerusalem (religious theocratic, conservative). These represent two fundamentally different visions of Israel and two different readings of King David: Tel Aviv sees David as the king of a glorious, open, innovative empire; Jerusalem sees David as a prophet who achieved redemption and repentance through suffering and sin.
  • The Jerusalem religious faction views the current war and the destruction of Tel Aviv positively — Tel Aviv represents the “animal soul” (materialism, hedonism, secularism) while Jerusalem represents the “divine soul” (spirituality, loyalty to God). They believe suffering is necessary for the Jewish people to rediscover God, and that only through destruction and repentance will the Messiah come.
  • A prominent Jerusalem rabbi declared the Messiah would arrive on Thursday (the day of the lecture), reflecting genuine excitement among religious zealots about the war’s destruction.
  • This faction does not care about the global economy, Iran, or the United States — only about the spiritual redemption of the Jewish people, which they believe will bring peace to the entire world.
  • Israel’s political dysfunction is long-standing: the Knesset has many small parties requiring unstable coalitions; Netanyahu has faced massive corruption protests; and Jewish factional infighting dates back to ancient times (Sadducees, Pharisees, Essenes fighting each other even as Rome besieged Jerusalem in 70 AD).

Civil Conflict in Iran

  • Iran has a complex dual governance structure (religious clerics at the top, secular government below) and is divided along political, religious, and ethnic lines.
  • The most important divide is between secular nationalists (urban, educated, wanting democracy and progress) and the Islamic theocracy (rural, religious).
  • War radicalizes both sides: the theocrats are moving toward Shia eschatology and martyrdom ideology (the return of the 12th Imam/Messiah to fight the “great Satan”), while secular nationalists are moving toward “Persian exceptionalism” — the belief that Persian civilization is the greatest in human history and worth dying for, more important than the survival of the Iranian state itself.
  • The critical question is whether these two strands can reconcile or whether Iran will descend into civil war — which it cannot afford while being bombed by the US and Israel, but which the law of proximity suggests is inevitable because internal conflicts always take priority.

Answering the Three Questions

  • How are leaders being killed? Through human intelligence (spies embedded in local networks) provided by internal factions within each country who share intelligence with the enemy to eliminate their domestic rivals. This is more plausible than electronic surveillance alone, given how difficult it is to precisely locate protected leaders.
  • Why are they being killed? Because internal factions prioritize defeating their domestic enemies over national unity. Killing a leader removes an internal rival and is seen as serving the faction’s interests, even if it eliminates the possibility of a ceasefire. Historically, targeting enemy leaders is avoided because it removes the off-ramp for negotiation and leads to more extreme replacements — but internal factions don’t care about off-ramps.
  • What does this mean for the world? The war is really between two competing world orders: the global secular financial order versus a nationalist theocratic order. Over the next 5–10 years, Iran will become more theocratic and extreme, Israel will abandon democracy for theocracy, and America will also move toward theocracy. The world is heading toward economic depression and rupture, which will force people away from materialism and individualism toward spirituality, community, and introspection — a painful but potentially redemptive transformation.

Student Questions and Discussion

  • A student asked whether the Messiah’s coming would affect China. Professor Jiang responded that from the Jerusalem religious perspective, only Israel matters — the spiritual state of the Jewish people determines the fate of the entire world; China, the US, and Russia are irrelevant.
  • A student asked about applying the animal soul/divine soul framework to personal life. Professor Jiang acknowledged the universal validity of this struggle, noting that the past 20 years of materialism and abandonment of the divine soul have created an imbalance that is now producing global conflict. The coming economic depression, while painful, may force people to focus on meaning, purpose, family, and community — which could be the “intention of the universe” or, as the religious perspective would say, the plan of God.
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