These days I try to read all the economic commentary I can find. High on my ranking of economic journalists is James Surowiecki of the New Yorker. He writes in his latest “Financial Page” column about the regulation proposals being thrown around the US Treasury Department. The selling pitch of the new regulation package is a move from a “rule-based” approach towards a “principle-based” approach. Surowiecki brings it all down to the turf with a sports analogy…
It’s something like the difference between football and soccer. Football, like most American sports, is heavily rule-bound. There’s an elaborate rulebook that sharply limits what players can and can’t do (down to where they have to stand on the field), and its dictates are followed with great care. Soccer is a more principles-based game. There are fewer rules, and the referee is given far more authority than officials in most American sports to interpret them and to shape game play and outcomes. For instance, a soccer referee keeps the game time, and at game’s end has the discretion to add as many or as few minutes of extra time as he deems necessary. There’s also less obsession with precision—players making a free kick or throw-in don’t have to pinpoint exactly where it should be taken from. As long as it’s in the general vicinity of the right spot, it’s O.K.
And Wall Street is apparently pro-soccer, which I gather is also very un-American.
Regardless of the subtext, what raises my thick eyebrows is the sports metaphor. If in trouble you can always illuminate love, war and economics with a story about youthful play. Life immitates sport.