But it's only solid game theory if one side doesn't have escalatory dominance.

For example, during the cold war, the US always had far, far fewer troops in Europe than the Soviet Union, and didn't have anywhere near the sea-lift capacity to transport the quantities of men and material necessary across the Atlantic to defend Europe. But we had nukes, and so we had plans to nuke Germany in case Warsaw pact forces invaded and made sure the Soviets understood those plans. Nuclear weapons nullified the escalatory dominance of the Soviet Union in a land war against NATO.

Now, the question is, who has escalatory dominance in Taiwan? It's clearly China. All the US can do is blow up the chip fabs, but China wants Taiwan for reasons that have nothing to do with the chip fabs, and would still want Taiwan even if it had no chip fabs. Even if it had no industry or population whatsoever. Whereas the US only wants Taiwan for the fabs, which China can destroy whenever it wants.

Unless we actually put nukes in Taiwan or commit to defending Taiwan with nukes, China will have escalatory dominance and not the U.S.

So that leads us to the second question -- what happens when you threaten to escalate but the other side has escalatory dominance? Then you end up making the situation worse, because you are in effect provoking the other side to begin a chain of events in which you are guaranteed to lose. That is not solid game theory.

I'll confess that I don't understand Taiwan's importance to China. They can put a certain amount of their resources into taking Taiwan -- which will absolutely not gain them access to TSMC's production capacity under any conditions, due to a web of Western dependencies that runs deeper than any rabbit hole -- or they can put the same resources into improving their own economic strength. Why wouldn't they choose the latter?

The reason I say I don't understand any of this is that the same reasoning should have applied to Russia. If they had spent a fraction of the effort and energy they've historically devoted to harming other countries on improving their own country instead, they would be way ahead of the game... yet they didn't, and don't show any indication of changing course.

Is the same irrational thinking present among China's leadership? If so -- and their pathological obsession with Taiwan certainly suggests that it is -- then things are really going to suck for everyone involved.

Then maybe you should read about the history of China (and Taiwan). And how it happened that Taiwan seperated from China.

Really you need to understand your opponent's utility function before immediately leaping to making summary judgments that China is not acting in its own interest.

For example, knowing that mainland China and Taiwan are the remnants of a civil war, in which mainland China has wanted to absorb Taiwan long before it had any chip fabs, as China views itself as the nation of the Chinese people as a whole, with Taiwan a historical part of China. This is the Chinese view. You may not agree with this view, but that doesn't give you the right invent some fake view and ascribe it to the Chinese, one that is easier for you to understand. 600,000 Americans died in our civil war and great slaughter and economic destruction was committed in order to prevent a portion of the US from seceding. Was that irrational? Maybe to someone who can only understand the North Invading the South because it wants access to Southern Cotton, but that wasn't the payoff function.

This idea that Taiwan = place where chips are made is the equivalent of viewing the Confederacy as where cotton was grown. It is not the Chinese view. Chips wont be made in Taiwan in the future, and they weren't made there in the past. Taiwan is much more than this, it is a population of Chinese people living in a region that was viewed as a historical part of China, and thus China views Taiwan as a rogue province first, and a chip maker second. Just because you view Taiwan as a chip producer does not mean that China does, or that China even cares about the chip production nearly as much as the "rogue province" part.

Being able to step outside of your own values and understand someone else's values is table stakes for doing this game theory exercise.

Moreover, the assumption that the military development of China which is ostensibly done to become strong enough to conquer Taiwan (but which would probably happen anyway) somehow comes at the expense of Chinese "development" -- is just not how China (or anyone else) views development. Most people view development as both military and economic. China's rise necessarily includes military power, and it's not at all clear that their military investment is so high as to cause their overall rise to be slowed. Certainly the US is more than happy to spend a trillion on defense each year and invade some country ever few years, yet we attribute much of our development to the growth of our military-industrial complex.

> If they had spent a fraction of the effort and energy they've historically devoted to harming other countries on improving their own country instead, they would be way ahead of the game... yet they didn't, and don't show any indication of changing course.

Either indulge in propaganda that vilifies the behavior of your enemies and attributes to them irrationality, or understand your opponent well enough to be able to predict their behavior but not both.

So this explains the "not being able to understand the behavior of X" -- you have to tear away the delusions first and view the world through a clear eye, and then you will be able to understand.

For example, Russia isn't the one who invaded or attacked 125 countries in the last 30 years. Is America acting against its own interests by doing that? No, they may be acting against your interests, but they are not acting against their own interests. Each of those 125 attacks against foreign nations had some reason, and were consistent with the view of people who view themselves as basically decent and seeking to protect their own legitimate interests. The US did not do that to "hurt other countries". The moment you stop believing that, you will find yourself unable to understand the policy of the United States. America will become a riddle. But worse, when you engage with America, you will find that they behave unpredictably, and so your geopolitical strategy will fail. The exact same is true for Russia, or China, or Iran, or Israel. They are all basically decent people in their own moral framework trying to look out for their own political interests in a rational way. No better or worse than the United States.

To be tall enough for the ride that is geopolitics, you must assume good faith, a desire to meet legitimate interests, and basic decency in their own moral framework on the part of your political opponents. The moment you slip into caricatures and cartoonish villainy, then you become blind to others and lose understanding. You seal yourself off and are not able to navigate the treacherous waters of the world, which requires you to both know yourself and your opponent.