What Wall Street & the Olympics Have in Common

Badminton doesn’t usually garner much attention at the Olympics, but it did last summer, when millions across the globe watched the curious spectacle of world-class players purposefully hitting shots long or into the net in order to lose a match and—through a structural quirk of the competition—thereby set themselves up for an easier draw in the next round. Boos from the crowd ensued, along with disqualifications from the games, and a myriad of op-ed pieces debating the character of true sportsmanship.

My initial reaction was surprise that badminton authorities would have been so foolish as to structure the pairings in Olympic play in a way that might encourage a team to lose. But it turns out that the system is widely employed in international competition in many sports. It usually works well, but it didn’t this time. This was largely because in one of the four groups of four teams to play a round-robin first round, the world-champion Chinese team was upset by Denmark. Both teams were proceeding to round two—each grouping passes its top two teams onward in the tourney—but now with Denmark seeded higher. Teams in other groups still playing in round one knew that it would be easier to play Denmark than China in round two. Thus, the offenders concluded they’d be better off losing their final match in round one so they’d rank second in their group and, through the reverse-seed matching of the format, get to play Denmark instead of China in the subsequent round.

The offending teams were evicted from the Olympics for “not using one’s best efforts to win a match” and for “conducting oneself in a manner that is clearly abusive or detrimental to the sport.” In particular, many editorial writers decried the loss of sportsmanship and the demise of a commitment to excellence independent of personal gain. But other pundits argued, as one headline put it, that “the goal is to win a gold medal, not to win every game.” After all, Bobby Fischer sometimes sacrificed a pawn for a later advantage. Derek Jeter might lay down a sacrifice bunt to move a runner from first base to second. Weren’t the badminton players simply doing the same – sacrificing an immediate gain in order to improve their chance for ultimate victory? And what about the two teams with the worst records in the NFL, who on the last weekend of the season recognize that one more loss might actually improve their team next year, since finishing last gives them the first pick in the college draft? Does any fan doubt—especially in a year when that top draft pick is a potential superstar—that the team in question may well approach the game with diminished zeal?

Although the op-ed writers on either side rarely named it, there are serious moral questions here—not just about the nature of sport, but about the character of a moral life. Debates about law and morality are ancient. For Christians who live in a pluralistic society with people who don’t share our commitments—and more importantly, who are themselves sinners—prudence requires that we shape our institutions so that they support morality by reducing as much as possible the conflict between virtue and self-interest. The key here lies in building structures that channel self-interest toward the common good.

To this end, major-league baseball doesn’t count Jeter’s sacrifice bunt against his batting average. As for the badminton scandal, it could have been avoided if those offending players hadn’t known which of the other three groups they would be paired with in round two. How about making those pairings only after round one is finished, with a five-year-old child pulling a slip of paper out of a box? (After all, that’s how Coptic Christians choose their pope from the final three candidates.)

At our best, we keep the goals of playing a game subordinated to the goals that rightly lead us to choose to play the game in the first place—what Thomas Aquinas would call preserving the proper ordering of human goods. But athletes, like the rest of us, can easily become so focused on the former that they lose sight of the latter. And herein lies a connection to economic life. In the current era all too many investment bankers, for example, have come to believe that success is measured by their personal incomes, not by how the financial services they provide contribute to the commonweal. We need economic structures that channel self-interest toward the common good while engendering initiative, innovation, and productivity.

Many such structures (and the cultural meanings that underpin them) are produced not by government, but by persons in a wide variety of organizations in society, including trade associations that adopt codes of conduct and police themselves accordingly—and the importance of such efforts informs Pope Benedict’s warning against “the continuing hegemony of the binary model of market-plus-State” (Caritas in veritate). Nonetheless, Catholic social thought has always recognized that government also has an essential role to play. Political conservatives who excoriate “government intervention” in the economy miss this point. Every “game” in life needs rules in order to obviate abusive actions, whether in badminton or business, baseball or bookkeeping. In this regard government does not “intervene” in markets; government defines markets, by creating their rules.

Yes, governments must resist over-regulation. But political resistance to rules solely on the grounds that they’ll make it harder for firms to do business isn’t simply wrong; it’s a category mistake. Only a concern for the common good—which of course includes the well-being of businesses—can justify changing the rules. This conviction led Pope John Paul II to teach that the market should be “appropriately controlled by the forces of society and by the State, so as to guarantee that the basic needs of the whole of society are satisfied” (Centesimus annus).

We live in an era when many Americans rail against government. But in a democracy, government is self-government. So what, and whom, are we railing against? And to what end? As the Lutheran bishop Peter Rogness has put it, political discourse that demonizes government “is like an immune system run amuck that eats the very body in which it resides.” This loss of the sense of democratic self-government lies at the heart of the Supreme Court’s misguided Citizens United decision. By fiat, the Court expanded the claim—itself a creature of nineteenth-century jurisprudential activism—that each corporation is a person. Will self government be drowned in the flood of political expenditure by firms who pay twice as much for a thirty-second Super Bowl commercial than the total re-election budget spent by the average congressional candidate? Thanks in part to Citizens United, it is an open question in this nation today.

Whether in badminton or economic life, we need three things: excellent play; rules that channel self-interest toward the well being of all involved, and procedures for changing those rules that prioritize the common good. As every Olympic athlete understands, playing well isn’t easy. Achieving the other two goals is even more difficult.

About the Author

Daniel K. Finn teaches economics and theology at the College of St. Benedict and St. John’s University. His most recent book is The Moral Dynamics of Economic Life: An Extension and Critique of Caritas in veritate (Oxford, 2012).

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