Co-operation or betrayal? It's not as clear-cut as you think

A modern but fictitious (of course) example of prisoner's dilemma would be this: two politicians are held by the authorities, accused of colluding over the alleged fiddling of donations. If Suspect A spills the beans, he (or perhaps she) can walk free and a stiffer sentence will be handed to the accomplice – but only if that accomplice stays silent. If the accomplice talks and Suspect A keeps his or her mouth shut, then the accomplice walks free and the suspect gets the full prison term. If both stay silent, they escape with a slap on the wrist from the Electoral Commission. If both talk, they get a two-week stint in jail.

Trials showed individuals in the pursuit of "rational self-interest" are more likely to betray first – believing that it is worth the risk to stitch someone up. Of course, not betraying would have been the best strategy for both, with the minimum sentence, but we live in a winner-takes-all society.

One senior MP has suggested that perhaps parliamentarians should look at applying game theory to contemporary politics. David "Two Brains" Willetts, the shadow "innovations" secretary, has stressed that institutions provide nice, cosy atmospheres where co-operation between different political tribes can thrive.

You see, the prisoner's dilemma is meant to be played repeatedly, and one soon realises there is a limit to betraying opponents. It becomes futile, and co-operation is the only way forward.

Willetts, who must secretly revel in his quasi-genius status, has missed one crucial point: game theory is already in active force. It has never been phased out.

But there are very different strategies being applied at Westminster and between Holyrood and Westminster. In many ways, the war games waged between Westminster and Holyrood – rather than the civilised back-stabbing inside Westminster itself – are more honest.

Both sides have, on several occasions, chosen betrayal. This correspondent remembers being phoned by the Scotland Office to pre-empt a row over fishing subsidies, that the Whitehall department assumed the SNP would stoke. The SNP was obliged to retaliate. In the end, the only losers were the fishermen, who were facing paying back their local authority over a disputed EU ruling on subsidies because Westminster and Holyrood were tearing each other apart.

Let us hope that Alex Salmond will take some lessons from this before he establishes Scotland as an international centre for peace and reconciliation.

Yet this subversive-hostile strategy is based on – oddly – quite a noble principle: that of outright political diversity. At Westminster, the divisions are much murkier. The opponents are the British public and the co-conspirators are the other political leaders. For a two-party system can thrive only when there is bland consensus.

Politicians are still applying the theories, such as prisoner's dilemma, and then feigning surprise when the largely distrustful society they have helped to orchestrate turns them into victims. They want their subjects to be under constant surveillance, yet are horrified at the idea they, too, can be bugged.

Of course, Sadiq Khan's victimisation stems from his past as a human rights lawyer. But he is now a government whip, who is charged with making sure his wayward back-benchers turn up to give the government its right to detain suspects for 42 days without charge.

Other MPs are alarmed at the idea that they, too, could be bugged and are expressing outrage. Yet who has sanctioned more CCTV cameras; weeks of detention without charge; the creation of DNA databases? For all their mock horror, there has been a certain amount of collusion, or at least cowardice, on this. It has taken years for mainstream parties to oppose identity cards. And only when it became undeniable that the war in Iraq was a disaster did politicians, other than those in the minor parties, start questioning the judgment behind the decision to invade.

In his tome An Economic Theory of Democracy, Anthony Downs said a two-party democracy could not provide stable government unless there was a large measure of ideological consensus among its citizens. Another acute observation was that it was rational for each party to encourage voters to be irrational by making its platform vague and ambiguous.

Downs wrote his theories 50 years ago, but they apply today. Our main Westminster parties propagate the same policies – the bland by-product of a largely two-party system.

For the wider electorate, a lack of diversity smothers public interest and participation in politics.

Even if the differences in the race across the Atlantic are superficial, it is a more appetising prospect than what faces this country before the next general election.

All parties need to eschew the fear of being different, of straying from the centre-right, and not assume playing it safe is a danger-free game.