Monthly Archives: March 2011

Political Power Play: The Game of Politics

We often ideally think that democracy is about taking the political equality of all citizens seriously. It’s about giving them an equal voice and vote, encouraging them to participate, allowing their views to be fairly represented, and facilitating an open and respectful dialogue in the search for the best solutions to the collective problems of society.

In reality, democratic politics are not that pretty. “Adversarial” might not be the first word that pops into our minds when we think of democracy in the US, but maybe it should be. The electoral system in the United States is fundamentally adversarial in nature: parties and candidates are encouraged to play to win.

As citizens in a constitutional republic, every American has one equal vote to elect representatives to the government in each electoral cycle. Elections pit candidates against each other in a competition for power. Almost all the offices of government, from Congress to the Presidency, are elected within this adversarial framework which requires them to compete against other candidates in order to gain or hold their jobs. Although most people don’t want to think of electoral politics as a game, a game is precisely what electoral politics looks like, except the prize for winning is a whole lot bigger than a ring or a trophy—it is power.

This is the first of a series of posts in which I will explore different angles of thinking about democratic politics as a game: one that is heavily regulated to help it achieve certain desired ends, and one that demands a degree of “good sportsmanship” from the players, to be sure. The open question at this stage is whether this way of “framing” democratic politics will help us evaluate and analyze both normative and empirical questions about democracy more clearly and effectively.

Why do we have this adversarial system of elections? What non-adversarial alternatives might there be? Is there value, moral or otherwise, inherent in this system; or is it justified entirely by the ends it might promote? Then there are more specific questions of function—if the system really is like a game, what are the rules that govern how it is played or ought to be played? What constitutes fair versus foul play? Who are the referees, what powers ought they be given, and how do we ensure their impartiality? These are just a few questions that I hope to address in later posts.

The Primaries: what doesn’t kill them makes them stronger?

That special time of the election cycle is approaching us—the primaries. A time when members from the same party begin a four to six month cycle of in-fighting that makes even the nastiest of family arguments look like a walk in the park. I have always found the American Presidential Primary system to be fascinating because of the quick shift that the Democratic and Republican (and…Tea??) Parties must undergo between competition and unification. They compete heavily and often ruthlessly for the nomination amongst their own party, but then everyone in the party is expected to turn around after the convention and promote a unified stance behind whoever the nominee may be.

Essentially, what we see in American politics is that our entire political system was established to be a very deliberately adversarial institution. Americans believe that a one-party system, without debate and negotiation, can lead to corruption, or—our Founding Fathers’ biggest fear—a non-representative monarchy. But, within this system we have developed political parties, which are not deliberately adversarial institutions. Yet, every four years the parties break their norm of cooperation and, essentially, become adversarial institutions in order to attempt to elect the candidate who will win the White House.

This seems pretty unusual, right? Well, I would argue that this is actually a commonplace practice amongst many institutions that are not necessarily adversarial in and of themselves, but must compete in a larger adversarial context. Law firms are perhaps the greatest example. The American legal system is very adversarial, but law firms themselves are supposed to be cooperative bodies that are working towards the same goal. However, in order to motivate employees and attempt to rise to the top of their field, law firms often create inter-office competitions that pit employees against one another.

After: It's a different story after the primary, when party unity trumps all.

 

The American Presidential election system is often criticized, and as we begin yet another election cycle the pundits and criticism will rise anew, but maybe we should all think more about why it is designed this way and how effective competition can be first.

Should responsible regulators follow the letter or the spirit of the law?

We typically expect ethical companies to follow not only the letter of the law, but also the spirit of the law. And in some cases, we would say that they should follow the spirit of the law rather than the letter. For example, if your washing machine breaks the day after the 3-year warrantee expires, you might think that an ethical – or even just reasonable – appliance manufacturer would nevertheless fix it for free.

By the same token, shouldn’t we expect responsible regulators and other government officials to respect the spirit of the law as much as the letter – and perhaps even to let the spirit override the letter some times?

Test your intuitions on the following case.

The Medicines Company engaged in a 9-year legal battle with the FDA and the United States Patent and Trademark Office, on whether it will be allowed to extend the patent on its blood thinner drug Angiomax until September 2014. The legal battle stemmed from the failure of the company to file its application for renewal within the 60 days allotted.

“The Medicines Company, based in Parsippany, N.J., learned of Angiomax’s approval by fax from the F.D.A. at 6:17 p.m. on Dec. 15, 2000, a Friday. It applied for the patent extension on Feb. 14, 2001. That is either 61 or 62 days after the approval, depending on whether the approval date itself is counted.”

Medicines Company contended that since the original fax was sent after 5pm the clock should not have started until the next business day allowing them to fit the law. The company pointed to the fact that the FDA marks anything received by their office after 5pm as received on the next business day. This administrative mistake could have cost the company over a billion dollars, and given its small size (with only one other drug on the market) marked the end of the company.

Big picture here isn’t just about one company’s struggle against the patent office and FDA, it is about the role of regulators in the pharmaceutical industry and the spirit of the law. Do we want our regulators to be inflexible in enforcing written laws or would we prefer some discretion allowed by administrators? Should they look to the spirit of the law, and not merely to its letter?

Sometimes the courts say, Yes. After 9 years of fighting and over $4 million spent on lawyers and lobbyists, Medicines Company won their legal battle.

 

 

Race-to-the-Bottom Watch: Are We Drowning in Advertising

Advertisements are everywhere.  Cabs and busses are covered in full-size ads, billboards are placed every 50 yards along highways, YouTube now plays ads before you can watch the video you intended, TV events are created out of one-sentence announcements (e.g. Heisman Trophy presentation, American Idol final), pop-ups pervade web browsing while we simultaneously find ads for pop-up blocker applications, high school prom dances turn into ads for the usefulness of duct tape, and people are ever getting paid to get advertisements tattooed on their bodies.  A 2009 study suggests that the average American adult spends over an hour a day watching advertisements on TV alone.

But really, you’ve got to feel sorry for the advertisers, don’t you? Think about it: the more ads that are put into the public domain, the less effective each individual ad becomes.

This stems from the fact that advertisers are competing to satisfy the existing and limited demand of a consumer base, rather than creating new demand.  Think of the sheer volume of ads for food and drinks.  These companies are not assuming that without advertisements people will just not eat at all; rather, they assume that people are going to eat somewhere, and advertisements are intended to direct the consumers’ demand in their direction.

While there is a certain amount of demand created by advertisements, advertisers aren’t so naïve as to assume that they can convince you, with a single 30-second spot, to buy a brand new car out of the blue.  Rather, their primary interest is to direct, and at times exaggerate, a consumer’s existing desires.  This means that marketers are essentially competing to win the same consumer demand, and consequently, with each entrance of a new competitor, the old ones have to fight even harder to maintain its market share.

Imagine visiting a city for the first time and getting lost on your way to the hotel.  Contrast the following scenarios:

Scenario 1 –You pull over and ask someone for directions.  The person says they know where you are intending to go and gives you concise enough directions to follow.

Scenario 2 – You pull over and ask a group of people for directions.  They all say that they know where you are intending to go and each gives you concise enough directions that you believe you can execute—however; everyone in the group gives you a different set of directions that lead you to altogether distinct places!

Presumably in scenario 1, you would simply follow the directions you were given, but scenario 2 seems much more confusing.  Whose directions are you to follow?  The person who has lived in the city the longest?  The one who seemed most confident?  The one who claimed to be a taxi driver?  The one who claimed to be a doctor?  The one who was most well dressed?  In fact, the situation seems altogether so confusing that you will probably reject all of their opinions and ask a new person or try purchasing a map.

The same confusion arises when advertisers compete for your demands.  The more businesses that decide to advertise, the more the existing advertisers have to shout louder, in more places, and in smarter ways in order to get your attention.  This ultimately leads to more and more of our dollars and minutes being spent on advertisements every year. We are, in short, in a commercial race to the bottom wherein the more effort that is expended leads to not only fewer gains but higher costs for both businesses and consumers. 

Race-to-the-Bottom Watch: Fishing for Trouble

What’s the most deadly occupation in America? According to the U.S. Bureau of Labor Statistics, it’s fishing. Commercial fishing, to be precise. Why is fishing so dangerous? Fisherman can be trapped in a perfect storm of collective-action problems and, well, actual storms.

The harsh competition in this already dangerous industry is leading workers to labor in ever-worse sea conditions in order for businesses to stay afloat (so to speak). The best fishing grounds are often found in the most treacherous seas, and the clock ticks down quickly in some fisheries (say, the crab fishery off the coast of Alaska) where the seasons last only a few weeks. When one vessel decides to go out in stormy weather in order to get a competitive edge, crews of other vessels are faced with the dilemma of either falling behind the competition or following suit in braving the potentially life-threatening conditions.

This dilemma is only exacerbated by the depleted state of many of the world’s most important fisheries.  In an effort to stem the “tragedy of the commons” of overfishing, authorities have commonly resorted to setting an overall limit of fish that can be caught in a given fishery for a given season.  The approach of giving an aggregated limit breeds intense competition because each fish caught by one fisherman entails one fewer available to all the others.  This creates what has become known as a “race to fish” wherein fishermen are willing to do almost anything in order to nab a greater share of the overall quota before it runs out, including foregoing safety precautions.

So this race to fish is really a race to the bottom. One crew deciding to risk the elements in order to gain a competitive advantage starts the race. But once the other vessels join the competition by going out in perilous weather conditions, the competitive edge that motivated the first mover vanishes, while the risk of death for all of the fishers increases.  Thus, in the race to fish we can see how individuals attempting to act in their own interest, while responding to the actions of others attempting to do the same, can all end up worse off.

Is there any way out of this race to the bottom? Some authorities have replaced the overall quota with individual allocations to prevent such fierce competition.  Critics protest, however, that this solution does not live up to the free-market principles of American capitalism.  However, it is evident that the case of a totally free market for fishing (in which fishers and their customers do not pay the cost of replenishing the fish stock) is likely to lead to overfishing and ultimately the end of any kind of market for fishing. What if the rights of individual allocations were auctioned off in advance?

 

 

The Hesitant Hand: what Adam Smith did and didn’t say about government regulation, corporate lobbying, and CSR

Ethics for Adversaries has been on spring break, but should be roaring back to life in the coming days.

Here’s a newish book I’ve just ordered on the history of Adam Smith’s Great Idea — the one that still frames so much of our thinking about the ethics of deliberately adversarial institutions. (Steven G. Medema, The Hesitant Hand: Taming Self-Interest in the History of Economic Ideas.)

I just hope the book is better than the first line of Princeton University Press’s blurb, which seems at best skewed and revisionist, and at worst just false:

“Adam Smith turned economic theory on its head in 1776 when he declared that the pursuit of self-interest mediated by the market itself–not by government–led, via an invisible hand, to the greatest possible welfare for society as a whole.”

It is well-known that the famous phrase “an invisible hand” (not even “the invisible hand,” which is what we tend to say now) was used only once in the massive two-volume Wealth of Nations. It comes in a chapter railing against Restraints on the Importation of Goods. Much of the chapter concerns what we would now call the law of comparative advantage — that is, about why it is to each country’s advantage to produce what it can produce most efficiently, and to trade abroad for what can be produced more efficiently in other countries. Throughout the chapter and the book Smith points out the myriad ways restrictions on international trade create inefficiencies. And also how these restrictions inevitably come from business people lobbying gullible or corrupt politicians in order to secure domestic monopolies.

But not only is it inefficient to restrict imports of goods produced more efficiently abroad, it is usually unnecessary. Business people prefer to keep an eye on their investments and to be able to trust the people they deal with, so they will naturally, even other things not equal, invest domestically. As Smith says in the famous “invisible hand” paragraph,

“As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it… he intends only his own gain, and he is in this, and in many other cases, led by an invisible hand to promote an end which was not part of his intention.”

He is talking about a particular case, and criticizing a particular type of government regulation, namely, what we would now call protectionism. He notes that this basic logic of the market replicates itself “in many other cases.” He does not say “in all other cases.” We know, for example, that the invisible hand will get all messed up in situations that involve collective action problems like the Prisoner’s Dilemma. Adam Smith would have had no reason to object to that (and I suspect that a real Smith scholar could point you to his discussions of PD-like situations). And he wouldn’t think that the general welfare would necessarily be increased by trade involving deceit, the exploitation of what we now call information asymmetries, or negative externalities.

It is also noteworthy, given the wording of the Princeton University Press blurb, that he does not say that self-interest via the invisible hand leads to “the greatest possible welfare of society as a whole.” In the “invisible hand” paragraph he is talking about “the annual revenue of every society [which] is always precisely equal to the exchangeable value of the whole annual produce of its industry.” That is, something like GDP. It is obviously an open question whether GDP tracks the “welfare of society.” Even the British Conservative Party doubts that assumption these days!

Once again, I’m no Adam Smith expert, but I have actually read great swaths of the Wealth of Nations, which is more than most latter-day “disciples” of Smith can claim. It is somewhat odd that the enduring lesson from that monumental work is the panglossian one that markets, left to their own devices, always lead to the best of all possible worlds (since that is not what Smith ever says), rather than Smith’s repeated warnings that we should always be suspicious of corporate lobbying and corporate conspiracies.

The conspiracy part we do remember from the famous quote about how we should worry whenever members of the same trade meet, “even for merriment and diversion” since they will inevitably try to fix prices. That is why even conservatives support anti-trust regulation; even if they also tend to think it is unfair in almost any particular case. But just as relevant today would be Smith’s utter contempt for business people lobbying and corrupting hapless politicians in order to enact particular regulations that serve their interest more than the public’s. Smith was concerned with trade restrictions that create unnatural monopolies, but he would be just as worried today about lobbying to allow for the exploitation of other market failures in a modern economy. And he would have been horrified when the right-wing — supposedly pro-market — justices on the Supreme Court used the Citizens United case to make it easier for corporations to pursue their interests by manipulating election processes.

And while this new book is drawing our attention to the famous “invisible hand” paragraph, it is worth noting that Smith was no fan of Corporate Social Responsibility, or CSR, either. He continues the paragraph quoted above by noting:

“By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.”

Bringing a snake to a knife fight

(Continuing the theme of the previous post by K. Listenbee.) From this week’s issue of the eponymous magazine of the City so nice they named it twice: a cartoon on the ethics of deception in adversarial negotiations.

 

 

(This cartoon is retransmitted without permission and will be removed upon request.)

Is bluffing just business, or is it bad business?

Consent and fair play can both provide reasonable justifications for the deceptive behavior in some contexts. If you agree to play poker with me, you can’t complain if I bluff — though you certainly could complain if you caught me playing with a marked deck. But these reasons do not necessarily work in the case of all adversarial institutions.

To an extent, part of what adversaries do is deceive and coerce people in order to win the game that they are a part of. This deception amongst adversaries is part of the game, not accidental. The minute difference between a foul and an intentional foul in the sport of boxing is just one example. In order to win, some boxers try to disguise intentional fouls as mere accidents. In his book Ethics for Adversaries, Applbaum argues that those within adversarial institutions have a better chance of getting away with actions that might not be as acceptable in other situations.

“One cannot coherently claim that one aims at the good ends of a competitive system if one seeks to undermine features of the system that make it good. Perhaps the claims that adversaries make about their aims and the actions that they take cannot be made to cohere. Or perhaps the good ends of the system are for its practitioners a sort of idle hope that is unconnected to what their actions aim at. But there is no plausible way to redescribe the violation that adversaries aim at as accidental, a foreseen but unintended side effect. If, to pass a test of reasonable acceptance, actions cannot aim at violation, then much of the violation that results from adversary institutions does not pass the test” – Applbaum, p. 187

When one plays to win, it can often involve actions that undermine the aims of the game. If adversaries are aiming at good ends, then the violations they inflict upon one another can be reasonably justified. As the final sentence of the quote implies, however, not all violations of normal moral codes (like honesty) in adversarial institutions are accidental.

In short, for Applbaum, the good ends of deliberately adversarial institutions will not always justify the means if the means are deliberately unethical.

 

Diving in soccer is like [blank] in business

In the comment-thread to a post by “Matiok” about soccer dives, below, I suggested that diving is in some sense significantly worse that most other fouls in sport (say, among fouls that do not involve significantly injuring your opponent). This is because diving involves a player who was not able to better his opponent on the field, and so instead decides to accuse the opponent of a foul in order to gain an advantage. You can’t win fair and square, and not only do you cheat, but you accuse your opponent of being the cheater.

There isn’t a good word for “chickenshit” in formal academic ethics. “Hypocrite” doesn’t quite capture the ethical nastiness of that kind of competitive tactic. (Yes, I realize it’s much more complicated than that, and that we have to look at the way the institution of soccer has evolved, etc, etc. I’ve done some of that in my other blog, here and here.)

But in this post I want to think about how we might fill in the blank in the title of the post. What, in other adversarial realms (like business or politics), resembles diving in soccer?

Well, here’s something similar. In a Reuters story yesterday we learn that:

Nickolas Galiatsatos, owner of Nina’s Bella Pizzeria in Upper Darby, Pennsylvania, is accused of putting bags of mice at nearby competitors on Monday afternoon, according to Upper Darby Police Superintendent Michael Chitwood.

The owner of Verona Pizza watched Galiatsatos go into his restroom carrying a bag but emerge empty-handed, and alerted two patrol officers who were in the restaurant, Chitwood said.

The officers found a bag of mice and footprints on a toilet seat, suggesting someone had been trying to reach the ceiling tiles, he said.

The officers then found Galiatsatos near another pizza place, Uncle Nick’s, where he was seen putting something in a trash can. There, police found a bag containing five mice, Chitwood said.

“This guy planted them to put these guys out of business,” Chitwood said. “I’ve been at this for 47 years, and I’ve never seen mice used as a criminal tool.”

Like many divers in soccer, he claimed he had to do this because his opponents were doing the same to him:

Galiatsatos claimed his shop had been infested with mice, and he blamed his competitors for the problem, he said.

Chitwood said that Galiatsatos told police he bought the mice at a pet shop for $10.

He faces misdemeanor charges of cruelty to animals, criminal mischief, harassment and disorderly conduct.

A misdemeanor?! You can NOT be serious, ref! Surely that’s a red-cardable offense.

Are some elections literally slam dunks? Did your Congressman win the way Blake Griffin did?

 

[Note: this is the inaugural post by Brandon H.]

Is politics a sport? Some things such as the rules in sports and the referees who enforce them seem accurately analogous to election laws and the election boards and courts that enforce them. Other more controversial comparisons have been suggested, none more interesting than the comparison between spectators and voters.

The simplest argument against this comparison is that spectators in sports may influence the outcome of the game but they do not directly determine it. To work around this objection, let’s see if there are similarities between (a) voters and speculators in the 2011 NBA slam dunk contest — an example of a sporting event where spectators do have more of a say in the outcome — and (b) the voters in the 2010 mid-term congressional elections.

The 2011 Slam Dunk Contest, which took place in Los Angeles, was highly anticipated for one major reason, the participation of the exciting and high-flying rookie phenomenon Blake Griffin. Blake plays for the local Los Angeles Clippers and opened a nationwide competition that aimed at giving him new dunks that he could use on national TV. Day of the competition Blake was able to electrify the fans and won the competition in convincing fashion. Even those who supported Blake’s victory question whether he was the best actual dunker in the competition. ESPN columnist John Hollinger says “in truth, McGee should have been facing DeMar DeRozan in the final instead of Griffin, but the hometown Los Angeles crowd swayed the judges heavily in Griffin’s favor.” He goes on to say the excitement in the arena every time Griffin dunked was electric and though “it’s not necessarily fair… it’s the reason he won.” In other words he may not have been the best dunker that night, but he knew how to work the crowd and do things they would love, and it was this quality that delivered the trophy.

How does this compare to political campaigns and voters? In recent history there has been a growing trend in campaigns to engage in negative advertising. Often these ads have no information about the candidate’s platform and amount to little more than personal attacks. According to the study by Amherst 54% of ads in 2010 were pure negative advertising. The truth is, whether voters want to believe it or not they are being treated much like the spectators in the Slam Dunk contest. Politicians are trying to distract the voters from the true issues and play to their emotions in order to win. Just like Blake Griffin.

Something to think about next time you hear a political consultant or pundit referring to some candidate’s chance of winning as a “slam dunk.”

New blog alert: Bleeding Heart Libertarians

Ethics for Adversaries is a newish kid on the blogging block. In the life-cycle of a typical blog, it’s probably a toddler now; just beginning to find its legs and sometimes capable of walking in the direction it intends, for at least a few steps.

There’s an even newer kid, though. Still wrapped in blankets and being passed back and forth between parents and nurses: Bleeding Heart Libertarians. It is the brainchild of a clutch of unusually large and active brains, who will occupy themselves there with questions of how to formulate and justify an urbane libertarian-like political philosophy. They don’t put it this way, but the name they chose for the blog could be replaced by “How to be a libertarian without being an asshole.” (I had a professor as an undergrad who wrote a book manuscript with the socialist version of that as his working title.)

In the actual words of one of the founding bloggers, Matt Zwolinski, a philosopher at the University of San Diego:

I’ve created this blog as a forum for academic philosophers who are attracted both to libertarianism and to ideals of social or distributive justice.  Labels are often a greater source of confusion than insight in academic discourse, and no doubt most of the contributors to this blog will wish to qualify the sense in which they fit this description.  Some, for instance, will qualify their libertarianism with a label – “left-libertarian,” or perhaps “liberaltarian.” Others might prefer to think of themselves as “classical liberals” or even “market anarchists.”  But libertarianism, as I’ve argued elsewhere, is a broad intellectual tradition bound together more by rough agreement than by meeting a set of necessary and sufficient conditions.   What we have in common on this blog is an appreciati0n for market mechanisms, for voluntary social cooperation, for property rights, and for individual liberty.  But we appreciate those things, in large part, becauseof the way they contribute to important human goods – and especially the way in which they allow some of society’s most vulnerable members to realize those goods.

Not everybody who is concerned about the design of, and ethics within, deliberately adversarial institutions will consider themselves to a member of Matt’s broad coalition. But everyone in that tent should be interested in the challenges raised here at Ethics for Adversaries. So with this shout-out I happily send them what may well be their first ping-back.

Best of luck, fellows (for so far their team is very masculine). Let us know when we should cross-post.

Bipartisan or Bust?

It seems that nearly every time President Obama or Speaker of the House John Bohener makes a speech the magic B word is somewhere in it—bipartisanship. Just yesterday when the Senate passed a stopgap measure to avoid a government shutdown, Obama said, “I’m pleased that Democrats and Republicans in Congress came together and passed a plan.” Throughout his campaign, Obama also crafted an image of bipartisanship. I can’t help but ask the question, do Democrats and Republicans truly want to work together like they claim? If they do, then there actions (like voting to repeal “Obamacare” by the Republicans or walking out of the Wisconsin state legislature by the Democrats) don’t seem to match their words. And if they don’t actually want to be bipartisan, then why do they insist on spending so much time on it?

The American political party system is an example of an adversarial institution. What makes this institution so interesting is that nothing in our Constitution creates a party system, in fact our founding fathers warned against the influence of parties. Now, however, we have a highly regulated system with complex rules and the party system is one of the foremost features of American democracy. There is a common notion, however, that the party system is somehow detrimental to our democracy and that being an “independent” is a matter of pride.

Nancy Rosenblum, a Harvard professor of government, writes in her book On the Side of the Angels: An Appreciation of Parties and Partisanship, that there is a notion in America that anti-partisanship is an ideal to strive for. In an interview with the Dartmouth student newspaper, she said that “Anti-partisanship is as old as politics and as old as the dinosaurs.”

Rosenblum, however maintains that partisanship is exactly one of democracies strongest positive features, and without it the system of American democracy that exists today would look totally different—and worse. “We don’t need independence or post-partisanship, but better partisanship.”

So, maybe instead of always throwing out empty words about bipartisanship and “above the Beltway” rhetoric, our political leaders could do well to reexamine their own party politics.

Be careful what you ask for; you just might get it

In a 1923 essay called “The Ethics of Competition,” Frank Knight, who would become one of the founders of the Chicago School, thought that business had become a kind of game or sport, and he wondered how good or “healthy” a game it was.

Knight begins his classic text by rehearsing the argument from an earlier essay of his, “Ethics and the Economic Interpretation.” He had previously tried “argue against the view of ethics most commonly accepted among economists…” It was, he argued, “against ‘scientific ethics’ of any kind, against any view which sets out from the assumption that human wants are objective and measurable magnitudes and that the satisfaction of such wants is the essence and criterion of value…”

The problem with the so-called “scientific ethics” – by which he means some kind of utilitarianism – is that it cannot really distinguish between “higher” and “lower” wants, and therefore reduces the former to the latter.

But, Knight argues,

the fact is that human beings do not regularly prefer their lower and more “necessary” needs to those not easily justified in terms of subsistence or survival value, but perhaps rather the contrary; in any case what we call progress has consisted largely in increasing the proportion of want-gratification of an aesthetic or spiritual as compared to that of a biologically utilitarian character, rather than in increasing the “quantity of life.”  The facts, as emphasized, are altogether against accepting any balance-sheet view of life; they point rather toward an evaluation of a far subtler sort than the addition and subtraction of homogeneous items, toward an ethics along the line of aesthetic criticism, whose canons are of another sort than scientific laws and are not quite intellectually satisfying.

In short, for Knight, we cannot judge how valuable or successful our lives are in the same way that companies organize and analyze a balance-sheet. In the financial arena the balance sheet is used to analyze what a company has (assets) and what it might be risking or not have (liability).  But how would we ever make sense of the owner’s equity section in a balance sheet? And how are we supposed to ensure that the assets and liabilities sides of the balance sheet should be equal or balanced?

Knight rejects the view that is still predominant in economics more than 75 years later, of “want satisfaction as a final criterion of value.” We can’t accept that because even in our own lives we don’t “regard our wants as final; instead of resting in the view that there is no disputing about tastes, we dispute about them more than anything else.” In fact, for Knight, “our most difficult problem in valuation is the evaluation of our wants themselves and our most troublesome want is the desire for wants of the ‘right’ kind.”

This is a profound, and these days much more widely accepted, critique of utilitarianism. Why is it relevant for adversarial ethics? Because we need to be able to judge whether the market system produces better overall results (via the invisible hand) than some other system. But how do we evaluate what is a better overall result? Not, Knight is arguing, by judging whether it satisfies more wants. We might not really want those wants. Or worse still, as he will go on to argue in this essay, because the system (or adversarial institution) itself has generated the wants that it satisfies.

Sometimes a founder of the Chicago School can sound remarkably like a founder of the Frankfurt School….

 

Red carpet: red in tooth and claw?

[Note: this is the inaugural post by K Listenbee.]

Sunday evening was highly anticipated. From the red carpet to the after-parties, the 83rd Academy Awards was a night to remember — as indicated by tweets, facebook statuses, and even the CNN hot topics list. All eyes might be on the red carpet fashion police and the list of winners and nominees now, but the first Academy Awards ceremony took place out of the public eye. The celebration and recognition of filmmakers and actors still exists, but has the Academy Awards become, along the way, an adversarial institution?

Once upon a time…

May 16, 1929 marked the beginning of a phenomenon – one that now garners more attention and acclaim than some political campaigns. An initially non-adversarial arena, the Academy Awards began as a way to honor the best of the best in the film industry. The first ceremony had a modest guest list, with 270 people in attendance, and only 15 awards were given. It took place during a brunch that was served at the Hollywood Roosevelt Hotel, followed by a party at the Mayfield.

Being recognized as the best in the industry had yet to become center stage, literally. Shortly after its inception, however, enthusiasm for the Academy Awards skyrocketed — a Los Angeles radio station even produced a live hour-long broadcast of the event. Public interest grew exponentially over the years. Rules, regulations, and qualification criteria began to develop. Actors and actresses began to compete for leading roles. Studios sought out the most highly acclaimed producers, directors, and writers in the industry. Thus, an adversarial institution emerged.

“And the Oscar goes to…”

The first awards ceremony had no real surprises. Winners were announced three months before the ceremony took place. The following year, the Academy decided to reveal the winners during the ceremony. The anticipation of winners and the growth in media attention surrounding the second award show aided in the shift: taking something essentially non-adversarial — the recognition of works of art — and putting it in a competitive setting.

Those within the film industry eventually began to take into account the actions of other players in anticipation of what they may or may not do to win. They have also developed tactics to improve their own chances of winning. Some of these tactics involved spending huge amounts of money on gifts and other goodies to influence the voting members of the Academy. And this in turn led to the Academy developing increasingly complicated rules and regulations to forbid “unhealthy” competitive attempts to “buy votes.”

Some accuse the Academy Awards of being influenced by marketing, rather than artistic quality. Others defend artistic merit as the sole requirement to win in this adversarial game. Whatever the case, for many filmmakers, actors, and spectators, the Oscars are not about the impartial recognition of an artistic achievement. They about winning – and by any means you can get away with.

 

The fine art of the dive

[Note: this is the inaugural post by "Matiok".]

We should be able to learn a lot about cheating and rule-breaking in all adversarial contexts by examining the clear-cut transgressions we find in sports. Of all of the kinds of cheating in sports, there seems to be something uniquely annoying (or interesting? entertaining?) about diving in soccer. (It is obviously similar to flopping and diving in other sports — except in the sport of diving, of course).
And of all the spectacular dives every week in the world of soccer (many showcased on a fabulous blog, The Diving Board) this one has been garnering an unusual amount of attention lately:
Here’s what The Diving Board has to say about it:

FOR SHAME! This is a whole new level of cheating. Not only has Chile’s Bryan Carrasco taken a ridiculous flop to the turf, but he’s also forced his opponent’s hand up into his face in a pathetic and desperate attempt to win a free kick in his own half. A part of me wants to applaud him for originality, but NO! Just no.

Bryan Carrasco, if you are the future of football then god help us all…

We will talk a lot about the case of soccer diving in future posts. But for now, let’s reflect on this particular innovation in the world of diving. Is it worse than more “typical dives” where players go to the ground in search of a free kick or a penalty kick after minimal or no contact with the opposing player? It does seem quite pre-meditated, doesn’t it? Surely the player thought about this trick before the game began. Perhaps he even practiced it. If so, were other players “implicated” in his scheme? Was his coach? If the referee had been close enough see exactly what happened, the diver himself might have been red-carded (ejected from the game, thereby forcing his team to play the remainder of the game down a man). All considerations of sportsmanship, ethics, and civilization aside, was it worth that risk? Does this player really believe that referees in the future will give him the benefit of the doubt when he is involved in dubious fouls? Does the sport of soccer itself lose credibility with this kind of publicity?

Who needs trade unions?

So far on this blog we have not talked much about the choices between adversarial and non-adversarial relations inside of firms. But this is a great context in which to sharpen our understanding of adversarial ethics, because we do have experience with much more and much less adversarial corporate cultures and industrial relations.

The legal recognition and buttressing of labor unions from the late 19th century until, say, the 1980s, could be described in two ways: either as instituting deliberately adversarial mechanisms in the governance and management of firms, or as making an already-adversarial relationship between owners of capital (and their managers) and laborers less unfair. There are other ways of describing this contested institution, for sure.

We’ll talk much more about what goes on inside the firm in the future; but at this point I would just like to flag a brief debate going on in the blog space at The Economist. Mark Thoma, an economist at the University of Oregon, proffers a brief answer to the question “What good are labour unions?” His one-sentence answer is, “Governments should replace unions as a protector of workers.” And of course, in many ways they have. Government occupational health and safety legislation, along with extensive bodies of employment law, now give to all workers what unions had to bargain tooth-and-nail for on behalf of their members.

But however important unions may have been in the past (and for Thoma this is an open question), he argues that:

In an increasingly globalised world where digital and other technology allow firms to easily escape unionised labour, unions have lost their ability to act as an equalising force in negotiations over wages and benefits.

Global labor organisations could provide an alternative, but this would require global institutions that do not presently exist, and that do not look likely to emerge anytime soon. For now, the answer has to come domestically and the only institution powerful enough to protect workers is government. Government-provided health and dental care, security in old age, workplace safety, insurance against job loss, higher education that is essentially free, and other such benefits would go a long way toward remedying what workers have lost since the 1970s. In addition, government redistribution of income may be needed to ensure that economic gains are shared more equitably. In combination, this would provide the things that unions fought to get for workers and maintain the current social protections that government provides.

There seems to be a general trend to make more institutions adversarial, competitive, or “market-like.” Ed Sullivan got people to watch singers and dancers on TV, but now we won’t watch them unless they’re competing against each other and we can vote on who wins. But here is a proposal to make one very important economic and social institution — the firm — less adversarial. Or maybe just less fair.