The prisoner’s dilemma is a simple and famous illustration of a problem that’s very common. One of the areas in which it is common is the arms race where two parties competing with each other each invest to outdo the other. This is visible in lots of situations. In some areas of patent law it’s pretty obvious that there’s a net social loss – I’m thinking for instance of software patents where virtually all inventions that get patented would have come into existence without the patent and yet patents are acquired by rent seeking ‘patent trolls’, or firms that not surprisingly are happy to take the windfall of a monopoly over an invention they would have come up with in any event and if you’re in the industry and you’re not one of those firms, then you have to patent to prevent one of the patent trolls coming after you and getting you to pay them protection money.
In other industries the case regarding patents, especially those that require heavy investment to bring things to market and the innovation thus generated is easy to immitate, things aren’t so clear cut. Though there remains an incentive to overinvest in such things (for instance for defensive purposes) the regime may generate more benefits than costs and the relevant policy question is how it can be optimally calibrated.
And the law generally is such a prisoner’s dilemma with results as confirmed in this study.
Do the parties in a typical dispute face incentives similar to those in the classic prisoner’s dilemma game? In this paper, we explore whether the costs and benefits of legal representation are such that each party seeks legal representation in the hope of exploiting the other party, while knowing full well that failing to do so will open up the possibility of being exploited. The paper first shows how it is possible to test for the presence of such an incentive structure in a typical dispute resolution system. It then reports estimates of the incentives for the parties to obtain legal representation in wage disputes that were settled by final-offer arbitration in New Jersey. The paper also reports briefly on similar studies of data from discharge grievances, court-annexed disputes in Pittsburgh, and child custody disputes in California. In each case, the data provide evidence that the parties face strong individual incentives to obtain legal representation which makes the parties jointly worse off. Using our New Jersey data, we find that expert agents may well have played a productive role in moderating the biases of their clients, but only early on in the history of the system. Over time, the parties slowly evolved to a non-cooperative equilibrium where the use of lawyers becomes nearly universal, despite the fact that agreeing not to hire lawyers is cheaper and does not appear to alter arbitration outcomes.
What can be done about this? Well one can ban legal representation, as happens in some small tribunals. But that can be very unfair to those with the least idea of what’s going on. They may find it prejudicially hard to put their case.
Jacqueline Maley has an article in today’s Fairfax media musing about who might succeed Julia Gillard as Labor leader after an election loss later this year.
It seems a tad premature in the circumstances, though only slightly more so than the subject of this post, which addresses the question: what options if any does Labor have if we reach April/May and Labor’s opinion poll ratings remain stubbornly stuck at around 33-35% primary vote and 47% or thereabouts two party preferred?
Polling for federal Labor improved somewhat over the last 3-4 months of 2012, partly because people began to realise that Abbott had been bullshitting them about the impact of Labor’s carbon pricing regime and perhaps also partly due to a grudging recognition that Julia Gillard, whatever her shortcomings, is a tough and feisty PM. Perhaps too we’re seeing the beginnings of public realisation that Australia’s economic position is actually very strong and that Abbott has been bullshitting on that front too. People have begun spending again (rather than saving more and more while reducing debt) and consumers generally are feeling less pessimistic. Those are certainly promising signs for the Gillard government, as is what appears at the time of writing to be a “done deal” on the US fiscal cliff standoff.
Overall Labor actually has a very attractive political story to tell: one of the world’s strongest economies; generally competent economic management (leaving aside its clinging for too long to a “surplus at all costs” promise – but that’s expectation management rather than economic management per se); a highly successful legislative record despite minority government constraints; and achieving seemingly durable settlements of two of Australia’s most intractable environmental issues, namely Murray-Darling waters and Tasmanian forestry.
If in the next 3-4 months the government can also fashion a plausible long-term funding model for the National Disability Insurance Scheme and the Gonski education reforms, an unlikely election victory in the second half of this year might yet be conjured, something that seemed utterly inconceivable only a few months ago.
But what if it isn’t? What if if becomes unavoidably apparent by April-May that swinging voters have made up their minds adversely about the Gillard government? Will federal Caucus members just shrug their shoulders resignedly and passively accept the inevitability of electoral obliteration? Somehow I doubt it.
Australia is one of the most prosperous and best-governed nations on earth. Our politicians, at least at national level, are mostly competent, honest and hard-working.
And yet our mainstream media conveys an almost opposite impression, and the blogosphere and twitterverse project an even more extreme vision of universal incompetent, corrupt political venality and double-dealing.
Personal smears and attack campaign strategies have long been a staple of politics both here and overseas, basically because they work. People love hearing and retelling malicious stories about others, especially the wealthy and powerful. However, over the last couple of years Australia has experienced a perfect storm of factors conducive to political smear tactics: a hung parliament with an Opposition leader determined to blast his way into an early power takeover by adopting Richo’s “whatever it takes” approach; a disgruntled former Labor leader convinced he’s been unfairly deposed and equally willing to do whatever it takes to get revenge and conceivably even re-take his stolen crown; and a mainstream media experiencing relentlessly declining income and therefore increasingly desperate to attract eyeballs through tabloid sensationalism. The combination has resulted in a toxic political environment not seen since the last days of the Whitlam government.
However, at least from my personal and unusually non-partisan perspective, the remarkable thing about the assorted smear campaigns from both sides is that, with a couple of exceptions, they are either confected or trivial. This post is aimed at demonstrating that proposition in relation to each of the major smear stories of 2012. I’ll take them in chronological order:
There has now been quite a bit of discussion about this week’s dismissal of James Ashby’s sexual harassment proceedings against former Speaker of the House of Representatives Peter Slipper for abuse of process (although nowhere near as much as the salacious coverage when Ashby’s ambush claim was first launched on 20 April. I wrote about the seemingly slender merits of Ashby’s claim shortly afterwards.
I want to focus on the role of Michael Harmer, Ashby’s aptly named lawyer, in orchestrating what Richard “Justinian” Ackland rightly calls a “shakedown” and “one of the grubbiest, underhand, unmeritorious, political assaults on a government in recent democratic memory, fanned by leading adornments of the Liberal Party”.
The core of the abuse of process involved in this case is also succinctly summarised by Ackland:
The judge explained the inclusion of allegations about misuse of Cabcharge dockets and a previous sexual relationship between Slipper and a young member of his staff, were designed to injure the parliamentarian for no legitimate forensic purpose.
They were irrelevant and scandalous, and were designed to maximise and inflame the media coverage.
Those superfluous flourishes were withdrawn when the statement of claim was filed a month after the originating application.
The real purpose of this litigation was to fire-up an attack not just on Slipper but on the government, and to seek to bring about its downfall.
It’s worth spelling out exactly why Harmer’s (and Ashby’s) conduct was so disgraceful, especially in Australia’s common law legal system.
You have to wonder why even a young-ish Julia Gillard didn’t smell a rat given Bruce Wilson’s eyes …
The hive-mind that is the Canberra Press Gallery has apparently decided that PM Julia Gillard’s activities at Slater & Gordon in the 1990s are to be deemed a non-story. Presumably they think the fact that she survived journalists’ probing for over an hour only a few weeks ago proves that there’s nothing in it, at least in the absence of evidence that she knew the money her ex-boyfriend union secretary Bruce Wilson used to buy a house in the name of his crony Ralph Blewitt was actually stolen from the AWU.
However, on a dispassionate analysis three stories published in the Fairfax media in the last few days raise new and very real and serious questions about Gillard’s behaviour at that time. See Property Links PM to Stolen Funds, The Man Who Knew Too Much and PM vouched for union body caught in corruption scandal.
Giving false information to officials?
In the last of these three stories it is reported that:
A TRADE union association from which hundreds of thousands of dollars were stolen by a former boyfriend of the Prime Minister, Julia Gillard, was only registered after Ms Gillard vouched for its legitimacy to authorities in Western Australia.
Ms Gillard – then a salaried partner with the law firm Slater & Gordon – wrote to the WA Corporate Affairs Commission in mid-1992 confirming that the Australian Workers Union Workplace Reform Association was a legitimate organisation under WA law.