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….

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.

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

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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.

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 ).

“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?

“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.

(Posted by Wayne.)

… and if so, is what goes on there like hockey or figure skating?

We standardly think of the adversarial legal system as one of the “classic” deliberately adversarial institutions. (This blog is about whether there are special rules for the design of, and behavior within, such institutions.) The most visible — and tele-visual — parts of the system involve lawyers representing two or more sides of a case battling it out, within the rules, to advance the interests of their clients (or of The People, in the case of prosecutors).

But not all parts of the justice or legal system are adversarial. It’s an open question how we should think about both the theory and the practice of what goes on at the “top” of the system — the Supreme Court (to give a US example; but all constitutional democracies have something similar). It certainly looks adversarial in important ways. Its role is to settle contentious issues in the law, and it does this by dealing with actual cases where one side doggedly disagrees with the other. Like lower courts, it will also listen to lawyers representing the opposing sides. And of course, we can’t ignore the fact that the justices on the Court are nominated by the President and approved (or rejected) by a very adversarial legislature.

And yet, the work of the justices themselves is expected to be entirely professional. They are meant to figure out, individually and collectively, the best interpretation of laws and the Constitution. They are not supposed to be representing any particular interest, and are even expected to set aside their own biases and interests — and if they cannot, on a particular case, to step aside. No individual member of the Court is supposed to be trying to “win” anything. Cases are supposed to be decided on their merits alone — may the best arguments be the winners.

Next week the Court will begin its deliberations on the Affordable Care Act. In advance of the three sessions where the justices will hear arguments, the New York Times has recently highlighted two interesting aspects of the nature of the Court within the deliberately adversarial justice system.

First, it noted that

The White House has begun an aggressive campaign to use approaching Supreme Court arguments on the new health care law as a moment to build support for the measure seen as President Obama’s signature legislative achievement, hoping to shape public opinion on an issue at the center of the battle for the White House and Congress.

Now this would not be unusual as a matter of politics: the President and his party are part of another nakedly adversarial system called democratic politics, and elections are looming. But what is unusual about these current plans is that they suggest that such politics may also be trying to influence the justices themselves.

The advocates and officials mapped out a strategy to call attention to tangible benefits of the law, like increased insurance coverage for young adults. Sensitive to the idea that they were encouraging demonstrations, White House officials denied that they were trying to gin up support by encouraging rallies outside the Supreme Court, just a stone’s throw from Congress on Capitol Hill…

Supporters of the law plan to hold events outside the court on each day of oral argument. The events include speeches by people with medical problems who have benefited or could benefit from the law. In addition, supporters will arrange for radio hosts to interview health care advocates at a “radio row,” at the United Methodist Building on Capitol Hill.

The law’s supporters may have to get there early if they want the best patch of sidewalk:

Opponents of the law will be active as well and are planning to show their sentiments at a rally on the Capitol grounds on March 27, the second day of Supreme Court arguments. Republican lawmakers, including Senator Patrick J. Toomey of Pennsylvania and Representative Michele Bachmann of Minnesota, are expected to address the rally, being organized by Americans for Prosperity, with support from conservative and free-market groups like the Tea Party Express.

Your guess is as good as mine about what influence all of this will have on the nine individuals charged with the final decision. It is nonetheless a curious “grey area” partisan political activity swirling around a part of the justice system that is supposed to be non-partisan and non-political — or at the very least, not susceptible to the emotional volume of support for one side or the other. The White House’s own cautious framing of their strategy seems to acknowledge that they are toeing close to a line they don’t want to cross.

Meanwhile, we hear whispers that the Chief Justice himself, John Roberts, may be approaching his pending vote among his colleagues with concerns that go beyond the correct interpretation of the law. The guess is that he will not necessarily vote for the side with the best arguments.

The consensus among scholars and Supreme Court practitioners is that Chief Justice Roberts is unlikely to add the fifth vote to those of the four justices in the court’s liberal wing to uphold the law. But he is said to be quite likely to provide a sixth vote should one of the other more conservative justices decide to join the court’s four more liberal members.

Why might he be willing to vote either way?

The case will require the chief justice to choose between two competing instincts.

On the one hand, he views himself as a steward of the court’s prestige and authority, and he has called for incremental decisions from large majorities rather than broad but sharply divided rulings. “As chief justice, Roberts has been extremely careful with the institutional reputation of the court,” said Barry Friedman, a law professor at New York University who has filed a brief urging the court to uphold the law.

The court has not rejected legislation as ambitious as the health care law since the 1930s. There is, moreover, only one plausible way for the justices to strike down the law, scholars who study the court say: by a 5-to-4 vote divided along ideological lines.

All of that might augur a cautious approach.

Now this is not unusual practice for judges in constitutional courts: to decide politically charged cases in ways that will serve to uphold the legitimacy of the Court — where legitimacy requires its being perceived as a fair, neutral party.

So what might this tell us about principles for design and professional behavior in other deliberately adversarial institutions? Sometimes “players” have to act in ways that uphold the “integrity of the game” even if this requires refraining from a winning tactic, or from carrying out a routine professional duty.

Interestingly enough, in the controversial Citizens United ruling, the Roberts Court struck down legislation that the politicians had put in place to preserve (some of) the integrity of their adversarial institution. The politicians had agreed to limit the influence of corporate money, along with perceptions of bias and corruption. Not all members of the majority denied that a flood of corporate money would have these consequences for democratic processes, but they felt nevertheless that rights to free speech couldn’t be infringed for the sake of the legitimacy of that process. If the rumors are true now, however, it seems that the Chief Justice may be willing to overlook a fundamental right being infringed by the new health care law for the sake of the Court’s “prestige and authority.”

Within current confines, those parents are not breaking any official rules. But, there is a sense that eager parents are gaming the system. This sort of gamesmanship also signifies a paradigm shift in extracurricular activities. Little league sports are no longer just for fun—they are institutions that cultivate talent and personalities prone to success. Most interestingly, it also appears that the process of raising children has shifted from a once inherently rewarding practice to an adversarial institution where the benefits of winning are permanent.

The scandal concerns the fact that over a number of years, members of the team (and at least one assistant coach) maintained a “bounty pool,” which paid out money to players who succeeded in inflicting serious injuries on players from opposing teams. Football is a tough sport; so what’s the problem?

The problem, of course, is that even tough games need rules, including rules designed to keep the game worth playing.

Drawing on Joseph Heath’s work on adversarial ethics in business, I argue that the limits on adversarial behaviour in business can be defined as those limits that keep the ‘game’ beneficial from a social point of view. Free, competitive markets are enormously beneficial, and behaviour that threatens the benefits of markets robs them of their moral justification.

For the fuller version of my argument, see my blog posting for Canadian Business magazine: New Orleans Saints football scandal highlights limits of competition.