When I was in 5th grade, the kids in my neighbordhood and I invented a great game. The game mechanics are a bit lengthy to describe here, but they involved two teams, each taking turns to question the other team on an imaginary object. The team with the most consistent answers won. We played this game for months, and enjoyed it a great deal. As time went on, we got better and better at it, making it very challenging to trip the other team up with difficult questions, and thus making the game very exciting and intellectually stimulating.

And then, we got too good at it. We overlearned the game. Within the bounds of the rules of the game, we realized that there is a strategy to crafting answers to questions that guaranteed a win. The opposing teams would try to defeat this approach with more and more difficult questions, but in the end, we gave up, and stopped playing the game.

I think this problem, of overlearning the game to a point where you exploit the rules to achieve goals that are far removed, or even opposed, to the original intent of the game, is systemic in human society and permeates almost all aspects of our lives.



Some examples:

Patents

The original purpose of patents was to protect inventors from others copying their paid-for-by-sweat-and-tears inventions. If there was no such protection, and barrier to entry was not too large, people and companies would not waste time and capital developing new inventions that ultimately benefit all of us.

However, people have now overlearned the game of patent litigation, leading to the situation where patents, especially in the software and high-tech industry, are now mostly used as attack weapons against potential competitors, and not even by the people or companies who invented what is covered by the patents. Patents are amassed, through purchases or acquisitions, by big corporations in order to beef up their patent arsenal for planned attacks against other companies or defense from attacks by other companies.

Long gone is the original purpose of patents.

Stocks

For this example, I’ll quote an excellent blog post by Mark Cuban

"… Wall Street is no longer what it was designed to be. Wall Street was designed to be a market to which companies provide securities (stocks/bonds), from which they received capital that would help them start/grow/sell businesses. Investors made their money by recognizing value where others did not, or by simply committing to a company and growing with it as a shareholder, receiving dividends or appreciation in their holdings.

Its primary business is no longer creating capital for business. Creating capital for business has to be less than 1pct of the volume on Wall Street in any given period.

… To traders, whether day traders or high frequency or somewhere in between, … Wall Street is a platform. It’s a platform to be exploited by every technological and intellectual means possible.“

Politics: Elected officials

The original purpose of having elected officials is to find the best person for the job of running a country, or state, or city.

People have overlearned this game too, and the result is that people who win elections are not necessarily those who are best suited for the job, but those who have gotten very good at getting elected. That is, people who can raise a lot of money, hire the best campaign strategists and consultants, pose for the best photo ops, and in general are able to tick off the most check marks on the list of what makes a great campaign.

Law

The main purpose behind having an impartial set of laws is to ensure the smooth functioning of society, and for a more abstract ‘make sure justice is served’ goal. Even this abstract goal has a concrete effect since, if people in a society can reasonably expect that justice is served most or all of the time, they are more likely to engage in many activities with their fellow citizens, such as trade, and the situation is more likely overall to lead to a proper-functioning and safe society with a high standard of living. To see why this is the case, one only needs to look at how well societies do when corruption is widespread or the rule of law collapses.

Unfortunately, there is a large group of people, namely a large majority of the legal profession, who have overlearned the game, and are now using the law as a weapon against people and companies, to further their clients’ interests at all costs, subverting the original intent of the law. An example of this is people and companies using the fear of the cost of litigation as, effectively, a blackmail mechanism to prevent competitiors from engaging in activities that would affect that person’s or company’s bottom line (because even if the defendant wins, and knows they can win, that would still cost more in legal fees than just settling out of court, or simply avoiding the behavior that can trigger the lawsuit).

Subverting the original intent of the law to the exclusive benefit of their clients, while staying within the letter of the law, is a highly-prized and highly-paid skill that the top attorneys in the country have, and which of course does nothing for society at large or for the overall 'make sure justice is served’ goal. And the fact that people are more and more aware of this is damaging to the foundations of a well-functioning society.

Test taking

Even on smaller-scale issues, overlearning the game is problematic. For example, the original purpose behind test taking was to find out which students have learned the most, or which students are most likely to do well at a particular university, or which candidates are best suited for a job. The original approach to doing better on tests was to simply study more, which also had the benefit of you becoming better in that subject.

The new approach, based on overlearning the rules of the game, is to over-emphasize test taking, leading to a large number of students who are great at getting good test scores, but don’t know how to attack problems that are outside the limited set of problems that show up on tests. And this is detrimental to their performance in their jobs, because in real life problems don’t fall under neat categories that can be solved with approaches from the focus-on-test-taking toolbox.

It should be noted that in all the above examples, people are still playing within the rules. With fixed rules, people are eventually able to find ways to exploit the rules to their benefit, and usually to the detriment of society at large. When societies notice this, and modify the rules to exclude some of that undesirable behavior, it doesn’t take long for people to find ways to exploit the new rules. (A prime example of this is campaign financing, and all the loopholes people have found over the years of circumventing campaign finance laws to get the money to the candidates they want to fund, no matter how many new campaign finance laws are passed.)

As the rules keep being modified to prevent abuse, and as people continue to learn to exploit the new rules, there comes a point where there is not much room any more to change the rules. There is only so much you can change about patent laws, or election laws, or stock market rules, etc, before they no longer serve their original purpose.

In the game I mentioned at the beginning of this post, there was only so much we could change about the rules to stop the undesirable strategy that made the game unplayable. In the end, we couldn’t end that behavior, and we stopped playing the game. But, in real life, we need to keep "playing the game”: we need to have elections, and protections for inventors, and laws that govern society, and a market where companies can raise money.

The question is, what do we do when we have to keep playing the game, given the endemic problem of the emergence of strategies that subvert the intent of the game.

Originally posted August 28, 2011

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