Monday, October 17, 2011

Occupy the 1990's New Jersey Devils...

In the mid-1990's the New Jersey Devils adapted a defensive technique known as the "neutral zone trap."   I'm sure I'm oversimplifying it, but it boiled down to clogging the middle of the ice so that the opposing team could not move up the ice with any kind of speed.  This was possible in part, because the offsides rules limited the amount of ice they had to cover at any given time.

Despite not having any elite offensive players, the Devils were able to leverage this technique to become essentially the default Stanley Cup champions for about a decade, frustrating more star-laden teams like the Philadelphia Flyers and Detroit Red Wings.   And the fans hated it, because it was boring, and star players spent the games frustrated.

Coming up with the neutral zone trap required ingenuity on the part of the Devils' coaching staff.  And executing it required hard work and discipline on the part of the players --  no other team was able to replicate the Devils' success with the trap.  It was perfectly within the rules of hockey, and not at all malevolent -- the Devils didn't set out to injure opposing teams' star players; they just limited their effectiveness.

Nevertheless, the NHL's failure to make the trap a less effective technique is a big reason why the league declined in popularity in the late 90's, and the rule changes it made to confront it are a big reason it's back.

The Devils found a way to increase their own success to the detriment (or at least not to the benefit) of the league.  It exploited certain peculiarities of the rules.  It was the responsibility of the league to act to make this less rewarding.  

The same is true of other sports.  If a less talented basketball team really could consistently negate a talent disparity by deploying a well-executed full-court press, then the powers of basketball would need to act to make it a less effective technique.  If "Moneyball" meant that the A's could be successful by fielding a team of a bunch of fat guys who drew lots of walks and hit home runs, baseball would need to act.  If things like "icing the kicker" really worked, the NFLwould need to act to prevent it.  It's the responsibility of the grown-ups in charge to ensure that the team's incentives are aligned with the interests of the league as a whole.

But what if the Devils also controlled the commissioner's office and the competition committee?  Do you think they'd act against their own interest?  Probably not.  In fact, given such a situation, I'd expect rule changes that made the trap even more effective.  Resulting in more trapping.  And the league's popularity would spiral downwards.

I think this is one way to think about what has happened to the "top 1%" over the past several years.  Some people have figured out ways to reliably make money in ways that do not have an apparent benefit to society, or that are actively harmful.  These ways may be quite ingenious.  They may require hefty amounts of discipline and hard work.  That doesn't mean they're benefiting society, or that people have an absolute right to continue to use these same techniques to enrich themselves indefinitely.

Trying to re-balance these incentives needs not be a moral condemnation of those who have enriched themselves, any more than rejiggering the NHL's offsides rules is a moral condemnation of the New Jersey Devils.  Nor is it destroying a delicately perfect machine.  We're not getting just results now; it's time to take a look at the incentives that are in place.  It would mean the Devils would have to figure out another way to win.

This is what healthy systems do.  They correct themselves -- not magically or invisibly, but the grown-ups take a look at the situation, and change things that need to be changed.

Where are these grown-ups today?

And, sorry Mr. President, but I don't consider asking all of those who are rich to pay more taxes to be the fundamental change we need.  It may or may not be the right thing to do.  But the problem isn't so much that people are allowed to great a share of the spoils of victory.  It's that these techniques lead to victory in the first place.
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