July 27 (Bloomberg) -- Well, that didn’t take long.
No sooner had the National Collegiate Athletic Association announced its sanctions against Pennsylvania State University for allowing Jerry Sandusky to prey upon young children for more than a decade than a legion of commentators emerged to insist that the penalties were too harsh -- not that the school didn’t deserve punishment, but that these particular sanctions would strike innocent students as well as wrongdoers.
One critic wonders “whether a $60 million fine is worth destroying all the good Penn State has produced as well.” According to another, by reducing the school’s athletic scholarships, the NCAA has “hurt dozens of young students who had nothing to do with this whatsoever.”
Let’s grant that all of this is true -- that the cost of the penalties against the school will fall on people who don’t deserve it. So what?
I mean the question seriously. This is precisely what enterprise liability does and what it is designed to do. Say that a technology startup hires a bunch of smart, young people and promises them lots of money, only to be hit by a patent-infringement suit based on the actions of a handful of researchers, actions about which the rest of the company knew nothing.
If the company loses the suit, most of those smart, young people -- innocent all -- will lose their jobs. This likelihood is not a defense.
The philosopher Elizabeth Wolgast, in her book “Ethics of an Artificial Person,” points out that we are sensibly wary of imposing collective responsibility. Thus, she says, we condemn the German tradition of Sippenhaft (used by the Nazis, although it predates their reign), under which an entire family could be punished for the wrongdoing of one of its members. Our moral practices, she argues, do not allow the imposition of punishment on “innocent or non-offending people.”
This is the principle to which the critics of the Penn State sanctions are appealing: that the non-offending are being punished for the crimes of others.
But our adherence to the principle is at best inconsistent. Whenever we hold an entity liable for the wrongdoing of some group under its control, a lot of people who fall under the entity’s umbrella and have done no wrong are going to get hurt. This truism applies when a corporation that has fudged its numbers is hit with a huge fine, paid with money that might otherwise be used for investments that would create jobs. It even applies when an outraged international community presses economic sanctions against a rogue regime, because rogues will always let their poorest citizens go hungry before the regime’s supporters do.
We like to think of punishments -- to a school, a bank, a church -- as falling entirely on institutions that do wrong. Unfortunately, this is not possible. Institutions are legal fictions. When we punish them, we often punish the people behind them. We always punish the people who rely on them.
In the particular case of college athletics, a significant part of the punishment for cheating almost invariably falls on innocent students. Schools that break the rules are typically banned from postseason play or stripped of several athletic scholarships. The loss of the playoffs reduces the utility of sports to both students who participate and students who cheer them on; the loss of scholarships reduces the net total of young people who can afford college.
In a world of perfect information and no cognitive bias, teenage athletes and their families would carefully weigh the likelihood that a particular school might wind up on probation in deciding where to enroll. Colleges would have an incentive to avoid cheating for fear that a reputation for ethical laxness would drive away the next generation of stars.
Few potential student-athletes actually behave in this way, and it is not clear that it would be rational for them to do so. The historian Ronald A. Smith, in his book “Pay for Play: A History of Big-Time College Athletic Reform,” reminds us that corruption in big-time college athletics is nothing new: We have been fretting about the tendency of colleges to cheat for more than a century. One reason scandals keep arising in collegiate sports is the relative weakness of the punishments meted out.
This principle is well known in economics. Rarely is it rational to expend resources taking precautions against losses that are highly unlikely to arise. So if, as Smith suggests, cheating to win is natural to us, then schools will continue to take the risk as long as the punishment, discounted by the likelihood of getting caught, is relatively small. And student-athletes considering which school to attend will similarly have no real incentive to take into account the possibility that some future punishment of the college might fall on their shoulders.
The obvious solution is to make all sanctions more severe - - that is, to treat academic fraud or the solicitation of money for athletes with such seriousness that those penalties, too, make headlines. If schools that cheat were routinely hit with harsh sanctions, then it would become rational for student-athletes to consider the possibility of future penalties when making their decisions. But if Penn State’s punishment remains sui generis -- an especially harsh sentence for an especially terrible offense -- then schools will continue to have little incentive to avoid the many smaller wrongs that together create the culture of corruption so rampant in college sports.
(Stephen L. Carter is a Bloomberg View columnist and a professor of law at Yale University. He is the author of “The Violence of Peace: America’s Wars in the Age of Obama,” and his latest novel is “The Impeachment of Abraham Lincoln.” The opinions expressed are his own.)
Read more opinion online from Bloomberg View. Subscribe to receive a daily e-mail highlighting new View columns, editorials and op-ed articles.
Today’s highlights: In a special signed editorial, Michael R. Bloomberg on the long road to sane gun policies.
Also, the editors on bringing back earmarks and on easing austerity in the U.K.; Jonathan Alter on the collective effort to “build that”; Jeffrey Goldberg on why Obama would be better than Romney on Iran; Pankaj Mishra on the challenge of Asian state capitalism; William Pesek on U.S.-China relations; Jonathan Weil on the conflicts of interest at Freddie Mac; Kim Schoenholtz and Lawrence White on remaking Libor.
To contact the writer of this article: Stephen L. Carter at firstname.lastname@example.org or @StepCarter on Twitter.
To contact the editor responsible for this article: Michael Newman at email@example.com.