Why Lance Armstrong isn’t the “Bernie Madoff of cycling”

On another blog, at the end of the summer, I spent far too much space trying to figure out what we should think about Lance Armstrong after his quasi-implicit-wink’n’nudge-pseudo-confession. That statement from Armstrong came as he announced his decision to, in essence, plead “no contest” to the US Anti-Doping Agency’s public hearing of his case. My colleague Chris MacDonald follows up on the case on his Business Ethics Blog — and does so much more concisely, and with special attention to the “adversarial ethics” angle.

On Wednesday (October 10), the United States Anti-Doping Agency (USADA) released a small mountain’s worth of evidence against champion cyclist Lance Armstrong. Not surprisingly, comparisons to corruption in the world of business were not far behind. On Twitter, a number of wags referred to Armstrong as the “Bernie Madoff of cycling,” or variants on that.

The comparison with Madoff is to be expected. In both cases, you have wrongdoing of impressive scope. In both cases, the wrongdoing was truly brazen, going on right under the noses of regulators. In both cases, you can’t escape the feeling that someone should have been able to figure it all out sooner. And in both cases, you see the eventual fall of a man who was a hero to many.

But the comparison is also off target in important ways….

 

‘Utmost Good Faith’ Between Adversaries?

Not much has yet been written about the quasi-adversarial relationship that obtains between consumers and the companies from which they buy goods and services, at least not in those terms.

And it’s clear, I think, that the relationship is quasi-adversarial. In game-theoretic terms, it’s a ‘mixed motive’ game — one in which cooperation of some form is useful, but in which each party has some incentive to deviate from maximally cooperative behaviour. When Apple sells me a computer, they would ideally like to squeeze as much money out of me as possible, while giving me a product as cheap-to-produce as possible. And my own preferences are the exact opposite. We both benefit from doing business together, but our interests in the interaction are not quite aligned. In fact, in terms of pure dollars and cents, the transaction between Apple and me is a zero-sum game: every extra dollar they charge for their computer is a dollar out of my pocket and into their corporate coffers. It’s not a fully-adversarial relationship, but it’s still one that needs some rules to keep it civilized.

In this regard, it’s good to know about the legal concept of uberrima fides. This is a legal doctrine, relating specifically to insurance contracts, which says that “all parties to an insurance contract must deal in good faith, making a full declaration of all material facts in the insurance proposal.” The relationship between insurer and insured, in other words, is a game that must be played by very strict rules.

The concept of uberrima fides doesn’t mean the insurer and insured are on the same team, metaphorically speaking. So it implies a relationship quite different from, say, a fiduciary one. A fiduciary relationship, as a famous legal judgment once put it, requires “the punctilio of an honor the most sensitive.” In a fiduciary relationship (e.g., the relationship between lawyer and client), the commercial aspect of the relationship takes a back seat, and one party (e.g., the lawyer) is expected to put the other party’s interests ahead of their own. In a relationship subject to the uberrima fides standard, the relationship is still at least partly adversarial, but the adversaries in question are expected to play very strictly according to the rules. This makes particular sense for the relationship between insurer and insured, presumably, because both parties are so highly vulnerable to gamesmanship and dissimulation on the part of the other.

This suggests, I think, that we think of various kinds of buyer/seller relationships as existing along a spectrum, from the aggressively adversarial to the utterly fiduciary. The question, then, is not which rules should apply to buyer/seller relationships in general. The question, rather, is which rules should apply to what kinds of buyer/seller relationships, and why.

Link

The Bachelor Reality TV Survey

The Bachelor: Watch it? Love it? Hate It? Judge it? I would really appreciate you taking just a minute to fill out this (very short and totally anonymous) survey.  Results will be revealed in a post here on the Ethics for Adversaries blog early next week!

http://www.surveymonkey.com/s/LCMY75V

Thanks so much for your participation!

Duke Student Government Elections: Students actively avoid adversarial tactics

While national democratic politics are generally adversarial, it turns out democratic politics in the context of student governments at American universities are not. Last week, the Duke Student Government held its annual debate for candidates running for student body president and vice president. The presidential candidates had very similar platforms, so the moderator spent most of the debate asking questions about their leadership styles. In a race where candidates differed on personal, rather than ideological, attributes, the candidates did surprisingly little to distinguish themselves from their opponents. None of the candidates directly criticized the other, and when asked to the name the biggest weaknesses of their opponents, one candidate declined to answer for sake of “constructive conversation.” Interestingly enough, the candidates were willing to scapegoat the school’s administrators on every issue.

Without any conflict, the debate lacked entertainment, for sure—but also substantive value. The platforms of all the candidates were vague and inflated, and they all got away with inaccurate statements. The candidates had plenty of opportunities to go after each other, but none of them did.

Much of this lack of conflict can be explained by the candidates’ relationships to one another. At the end of the campaign, the candidates will inevitably see each other again in class or at a party. They don’t have the luxury of returning to their home states or hiding behind a camera. The candidates have to directly confront each other, and a contention taken the wrong way would make future interactions awkward. On the national stage, it is easy to call your opponent a flip-flopper. On a cafeteria stage in front of a group of peers, a comment with even the slightest contrast can be taken offensively.

In some ways, a government where members are sensitive to conflict will be a government with a lot of mutual respect and cooperation. However, less conflict means fewer substantive policies are crafted on the campaign trail, and candidates win with broad promises without a map to completion. Additionally, voters cannot make informed decisions—without the ability to compare differing platforms or leadership styles, voters inevitably base their decisions on recommendations from peers and name recognition.

At the end of the debate, the uncontested candidate for vice president lambasted the presidential candidates for their remarks about the administration (see it here at 1:00:35), and the audience responded with hoots and applause. The candidates may not like conflict, but the voters sure do.

Eating Caterpillars

When I was in middle school, I lived next door to two boys who were constantly creating ad hoc competitions between themselves.  Of course, their parents thought this was cute when they had bike races down the street or tried to build the best snowman.  Except apparently those little battles weren’t extreme enough.  To up the ante, they decided to recreate Fear Factor in their back yard, and the next thing anyone knew, both boys were gulping down live caterpillars in an effort to outdo each other.  What most people would consider unthinkable suddenly became necessary and desirable in the name of competition.  By making rules for themselves and calling it a game, absurd actions became permissible and exciting.  (If anyone is wondering by the way, the record was thirteen live caterpillars in a row).

This caterpillar-eating frenzy is what immediately comes to mind when I first heard about Ultimate Tazer Ball.  No, that was not a typo.  Ultimate Tazer Ball.  The players carry tasers, self-defense weapons, and zap each other as they fight over a 24” ball.

According to Discovery.com:

The sport was is the brainchild of Leif Kellenberger, Eric Prum and Erik Wunsch, who work in the world of professional paintball.  They were brainstorming ideas for new extreme sports and thought of adding some real energy with the use of tasers. As the concept developed, they dropped real tasers, which can cause cardiac arrest and death, for stun guns that cause pain but are not dangerous. “It’s relatively safe as any contact sport would be” Prum says.

Then they turned to creating a sport that would be more than a gimmick. It includes elements of rugby, soccer and hockey. Teams of four vie to carry or throw a 24″ ball into the opponents’ goal. Tackling is allowed; punching isn’t. Defenders can only taze a player in possession of the ball who is within a designated space around the goals. (Tazing of the shoulders and groin is always illegal.)

Well, as long as shoulder and groin tasing are illegal…

With the creation of Ultimate Taser Ball, Kellenberger, Prum, and Wunsch have transformed assault into a game.  While the tasers used aren’t police-grade one and are set to a lower amperage than would be required to induce cardiac arrest, the players are fairly vocal about the pain.  Of course, in any sport or game, there is a risk of injury that players consent to undertaking.  How much risk, however, can or should someone consent to accepting in the name of competition?  Are games, no matter how dangerous, acceptable as long as the players agree to abide by the rules and accept the relevant risks?  In war, soldiers consent to risk of being killed, but should a civilian be allowed to consent to the same for the purpose of playing a game?

(You can watch videos of Ultimate Tazer Ball on YouTube.  One example can be found at http://www.youtube.com/watch?v=5M5_Jlio08k ).

American Politics: Are We Still Playing the Same Game?

Of all the rhetoric that we have heard during this Republican primary, it is perhaps this comment from Rick Santorum that is the most perplexing:

“President Obama once said he wants everybody in America to go to college.  What a snob.  I understand why he wants you to go to college.  He wants to remake you in his image.”

While Barack Obama’s intention behind the comment was not explicitly to promote a liberal education – but merely to suggest that education, whether it is technical, vocational, preprofessional, or liberal is, on balance, a benefit – Santorum’s disgust for ‘liberal academia’ is quite transparent.  Is this attitude antithetical to the foundations of our democratic society?  Or, to put it another way, are American politicians still playing the same game?

Politics, if it is a game, should be played according to a set of tactical, regulative, and constitutive rules.  Tactical rules are the strategies that are employed by a team or player in an effort to win the game.  For example, if I am playing chess, my opening move won’t be white pawn from h2-h3, since that doesn’t make any strategic sense whatsoever within a normal chess game.  Regulative rules are those guidelines that keep each side from gaining an unfair advantage, or exploiting loopholes that might exist due to the way the constitutive rules are described or set.  It is possible to break regulative rules and still be playing the same game.  The constitutive rules, by contrast, are what defines the game itself, and changing them entails playing another game altogether.  You are not playing chess if, for example, you declare that your winning the game is a result of you, yourself, being checkmated.

To see whether or not American politicians are still playing the same game, it is helpful to get an idea of what the goal of politics actually is.  Is the goal simply to win — to be elected President, for example — at all costs?  Probably not, since we wouldn’t want a presidential candidate to win by intentionally sabotaging the country, for example.  Indeed, this strategy would be contrary to the very purpose of the office for which the candidate is running.  We might say that the point of the political process is to elect someone into a position of public power who promotes the general welfare of the people.

Is this goal consistent with the de-valuing of, or hostility towards, a liberal education?  Historically, a liberal education was a privilege of the elite, or landed gentry – when one’s income was secure, it was appropriate to be educated in rhetoric so as to become an active, engaged citizen, who could not only make arguments, but listen and assess the arguments of others.  In contemporary civil society, it seems like education supports the democratic process, insofar as it exposes individuals to different points of view, and teaches them to critically assess those views, both for their strengths and weaknesses.  In this way, a liberal education promotes tolerance and recognition of divergent values; and so also promotes other-regarding virtues that are necessary for solidarity, and, by extension, the flourishing of a democratic society.  The major difference, of course, is that in our contemporary context, a liberal education is generally democratized among all classes; it is no longer a privilege of the few, nor should it be.

Even if President Obama’s point was to encourage a liberal education (which it was not), would this be so terrible?  I do not see what is so offensive about cultivating a population comprised of well-informed, educated citizens.  Santorum, however, seems to want to foster a climate of distrust and intolerance of opposing views, which might be fine if the goal of politics is to win at all costs.  However, insofar as the solidarity necessary for well-functioning democratic societies is secured best through education, then it seems that conservatives like Santorum would benefit from remembering the constitutive rules of the political game.  Sometimes a win for a particular candidate is a loss for American society, and I do not think that such a loss is consistent with the point of the political process.

I think we’d all do well to remember James Madison and Federalist #10 here, where Madison talks of factions and their threat to the common good.  Of course, to remember lessons from the Federalist Papers, we have to have read them, and what better place than within the academy itself?

Bi-Partisan Markets

Milton Friedman purports in Capitalism and Freedom that the free market allows the individual to express her individual desires, while the democratic system forces conformity.

“From this standpoint, the role of the market, as already noted, is that it permits unanimity without conformity; that it is a system of effectively proportional representation. On the other hand, the characteristic feature of action through explicitly political channels is that it tends to require or to enforce substantial conformity. The typical issue must be decides “yes” or “no”; at most, provision can be made for a fairly limited number of alternatives. Even the use of proportional representation in its explicitly political form does not alter this conclusion. The number of separate groups that can in fact be represented is narrowly limited, enormously so by comparison with the proportional representation of the market.”

Although Friedman argues for the benefits of proportional representation in the market, the economic system can potentially arrive at a similar conclusion as the political system. Consider the situation of the carbonated soda market, where advertising similarly enforces substantial conformity by raising the barriers to entry. Coke and Pepsi hold over 70% of the market share.[1] This sounds dangerously similar to the current political landscape in the United States, with Republicans and Democrats holding over 60% of the “voter market share.” 36% of registered voters are Democrats and 27% are registered Republicans.[2] The competitive landscape is actually slanted more in favor of Coke and Pepsi than our often-criticized bi-partisan political system.

The point that Friedman is trying to make is that 49.9% of the country may be forced to conform to a political situation to which they are opposed. Obviously, if Coke has a majority market share, you are not forced to consume only Coke. However, Friedman argues that the free market constitutes a system of proportional representation, but that is not consistent in the Coke/Pepsi situation. Due to wide awareness of Coke as a result of advertising expenditure, the consumer has a higher subconscious disposition to purchase Coke. It is not the result of actual product preference, but rather brand preference. Even if a company launches a cola competitor to Coke that is a healthier alternative with the exact taste, it will likely fail due to consumer’s requisite knowledge of the Coke brand. Essentially, a consumer purchasing RC Cola has the same effect of a citizen voting for the green party. The consumer is forced to conform to an economic situation in which they potentially are opposed, but is unable to view or obtain alternatives due to Coke’s stranglehold on the market.

One could argue that the consumer is not truly forced to consume Coke; she could simply purchase RC Cola in the supermarket. However, what about the situations in stadiums, theaters, or restaurants where there is only one option? These venue providers will rationally select the most prominent brand in order to appease the most consumers, and thus select Coke. But this leaves the consumer with a ‘yes’ or ‘no’ choice in those certain environments; the exact situation in which Friedman condemns. Thus, while liberal economists criticize the conformity in politics and espouse the virtues of the competitive marketplace, both systems are equally susceptible to the concentration of power.


[1]Esterl, Mike. “Pepsi Thirsty for a Comeback.” Wall Street Journal, 18 Mar. 2011. Web. <http://online.wsj.com/article/SB10001424052748703818204576206653259805970.html&gt;

[2] “Fewer Voters Identify as Republicans.” Pew Research Center. 20 Mar. 2008. Web. 04 Apr. 2012. <http://pewresearch.org/pubs/773/fewer-voters-identify-as-republicans&gt;.