Lessons from Lance

Lynne Kiesling

So now we at least know something direct from the horse’s mouth about Lance Armstrong’s use of performance-enhancing drugs before and during his long run of commanding Tour de France performances. In addition to the interview with Oprah Winfrey, this CBS 60 Minutes segment and this Cycling News interview with Armstrong provide fuller details. If you do not follow cycling or have not been following these events, Juliet Macur’s New York Times story from January 6 provides a good summary. (By the way, Juliet Macur, ESPN’s Bonnie Ford, and WSJ’s Jason Gay (here and here recently) are outstanding journalists and writers whose insights and knowledge have been essential reading on cycling for years, not just in dissecting l’affaire Armstrong).

Having followed cycling since the mid-1980s, my sense is that Armstrong is right that PED use is endemic in quite a few sports, including cycling. But it’s not universal. I also think that Armstrong is choosing his words carefully, and in a very calculated manner is trying to walk the fine line between saying enough to get some reputation capital back and be readmitted to professional racing (in triathlon this time, as in his early career) and saying so much that he re-triggers the federal lawsuit about his alleged conspiracy to distribute and use illegal substances, which would land him in jail.

What I find the most personally disturbing is his callous willingness to treat other people as means to an end, one end, his winning the Tour as many times as possible. The bullying and the backing of young, eager, naive athletes into Faustian corners is unforgivable. For that alone I’d deny him a USA Triathlon license. But I’m a very strong believer in private ordering through reputation and strong social norms, probably a stronger believer in them than the general population.

Some observers, including my good friends at Reason, argue that we should allow PED use in professional sports. I disagree, for two reasons, one physiological and one moral. In sports like cycling, the blood doping is intended to increase the oxygen content of the blood and to accelerate recovery from endurance activity. It does that, but it does that differently for each person, because each person has a different baseline blood oxygen content (hematocrit) and each person responds differently to augmentation. It’s not just a parallel shift that “raises all boats” equivalently. So if you are a rider with a low hematocrit who responds well to doping and you beat a rider with a higher hematocrit who responds less to doping, what have you achieved? Who’s the better cyclist on that day?

And that gets to the moral reason why I think we should continue to have sanctions against PED use in sports. Sports, whether professional or recreational, are meaningless unless they are grounded in the deeply human institutions of fair play. We have evolved a sense of fair play for a reason. Abandoning that institution with respect to PED use in professional sports would abandon fair play, would turn sports into nothing more than a “bread and circus” spectacle to entertain the masses in the manner of the Roman gladiators, and would feed back into youth sports with very perverse and negative incentives that would undermine the physical, psychological, and moral benefits we derive from participating in sports. If we relinquish fair play in sports we relegate sports to meaningless decadence. I can’t support that. Nor does the evolution of our institutions through human history match with that decision.

Which gets me to Roger Pielke Jr.’s very insightful post in which he argues that sports need stronger institutions. I really encourage you to read his post, because he does a very good job of summarizing the complicated institutional framework in which many sports operate. Cycling is an Olympic sport, and it also involves competitions (like the Tour de France and the Giro d’Italia) run by international organizations. It also has a governance organization, the UCI, which has come in for a lot of justifiable criticism regarding its transparency and its enforcement of its private rules against doping (in fact, I think it hasn’t come in for enough criticism and that lots of heads need to roll, but that’s for another post). Roger’s post also highlights the awkward nexus of the International Olympic Committee (and the USOC) and its private sanctions against doping, the non-governmental organization that is charged with monitoring and enforcing these sanctions (WADA, and in the US, USADA), and the treatment of PED use in sports by various international governments. In particular, in many other countries enforcement does involve governments and PED use violations are subject to criminal prosecution, while under US law they are treated as private matters as long as the substances are not themselves illegal. Of course, this line gets crossed all the time, as we see when Congress gets a burr under its saddle and hauls ex-baseball players up to testify about PED use.

And that’s where I think l’affaire Armstrong and the US government’s pursuit of him and how USADA plays into that should make us all pause and consider the implications of this government power more broadly. Last week in Wired, Brian Alexander wrote that the Armstrong case and USADA’s role in it should make you, and me, and each of us worry:

So here’s the thing you need to know: The USADA takedown of Armstrong matters, and it could effect everybody. Because it will enhance the power and reach of a private, non-profit business that has managed to harness the power of the federal government in what’s quickly becoming a brand new war on drugs … with all the same pitfalls brought to you by the first war on drugs.

The USADA is a private outfit. Yet it gets taxpayer money. And it has existed in this weird legal nether world since its creation in 1999 at the instigation of the International Olympic Committee, United States Olympic Committee, and President Clinton’s White House Office of National Drug Control Policy. The USADA is designated by the U.S. Congress as the company that handles anti-doping for this country, because the World Anti-Doping Treaty — a UNESCO-promulgated document that the U.S. signed with almost no discussion – obligates the U.S. to do a number of things, which includes conforming our laws to the international anti-doping code. …

The USADA has wanted Armstrong for years. To it, and to the World Anti-Doping Agency (WADA), Armstrong was Moby Dick: If they could kill the whale – and do it without a raft of positive tests to show Armstrong doped – a new model of anti-doping would be enshrined into practice. And that’s just what happened.

Piggy-backing on a federal investigation, the USADA was able to pressure Armstrong teammates to confess to doping and implicate Armstrong … with no positive test results. It was an FBI-style investigation spanning multiple countries, but there was no “smoking syringe” found stuck in Armstrong’s arm. …

So while you might wish athletes didn’t dope — I do, too — and want action taken to combat doping, you might also want to be careful about what you’re wishing for. Especially since sports is taking on a broader definition that includes amateurs, low-level marathon runners, and even your kid’s high school football team.

I’ve excerpted Alexander’s argument, but I do encourage you to read it fully for a better understanding of exactly how sobering the implications are.

That’s what I think there are a lot of disturbing lessons from Lance, and from the USADA’s pursuit of him. Both his craven conduct and lack of character and the sinister implications of his prosecution bode ill in ways that will diminish sports that we love, as spectators and as participants. And they increase the authority of the state in ways that we’ve already seen are destructive.

An economic analysis of governance in cycling

Over the past week professional cycling has been thrown topsy-turvy by the fallout from the US Anti-Doping Agency’s report on their investigation into performance-enhancing drug (PED) use in the U.S. Postal Service team, 1998-2006. The focus of the dossier is, of course, Lance Armstrong, and the eyewitness testimony is extensive and not very surprising to those of us who have been following the sport for a long time (since 1985, in my case). Based on those affidavits, Armstrong has lost sponsorship contracts this week with Nike, Trek, and other companies, and has stepped down as the chairman of the cancer charity he founded, Livestrong (although he remains a member of its board). Friday the Dutch bank Rabobank announced the end of its sponsorship of both its men’s and women’s professional team (leaving World Champion and Olympic gold medalist Marianne Vos on a team without a name sponsor), giving as its reason that “[w]e are no longer convinced that the international professional world of cycling can make this a clean and fair sport. We are not confident that this will change for the better in the foreseeable future.” This statement suggests an economic hypothesis: doping in sport is a problem of perverse incentives and poor governance institutions, and poor governance in cycling undermines the credibility and profitability of the sport.

Professional cycling has a governing organization, the Union Cycliste International. As currently constituted, UCI decision-making is hierarchical, and riders, team directors, sponsors, and the cycling industry have little input into rulemaking. UCI’s mission is, in part, to establish rules ranging from the minimum allowed weight of a bicycle for competition to anti-doping rules and penalties. But part of its mission is also the promotion of the professional sport of cycling through its sponsored events, and increasing the size and popularity of the sport. These missions come into conflict in situations where, say, a popular athlete who brings a lot of revenue into the sport may be using PEDs — do they enforce the rules and risk the revenue hit? (Note also that this conflict of interest pervades the NFL, MLB, and other sports and sporting organizations) Their revenue mission may undermine their self-governing regulatory mission, and they thus have perverse incentives that can lead them to overlook, or try to cover up, high-profile violations of the anti-doping rules. Both the current and former UCI presidents have come under criticism for their faulty stewardship of the sport, because their past actions indicate that they associated complacency in the face of doping with more revenue and a higher profile for the sport. At best, UCI has looked the other way; at worst, it may have been complicit in concealing high-profile violations.

Another organization that plays a regulatory role in conjunction with UCI is the World Anti-Doping Agency, WADA. The infamous Festina affair at the 1998 Tour de France led to the formation of WADA in 1999, as a joint initiative of the International Olympic Committee and national governments. USADA, the U.S. member of WADA, was founded in 2000. In the current case, USADA has presented its documentation to UCI, which will state on Monday the actions it will take in response.

But WADA/USADA also have perverse incentives. Economist Roger Noll has done extensive research on the political economy of sports, and recently did an excellent EconTalk podcast with Russ Roberts (it’s long, but the doping discussion is at 46:45-57:45). Noll argues that WADA/USADA have perverse incentives because their fees are proportional to the number of infractions they catch and punish. Thus WADA earns its keep by expanding the list of prohibited items, setting unreasonably stringent thresholds for them, testing for them, and punishing their use. Rather, athletes should be able to make the rules by which they commit to abide, constrained by not engaging in illegal activities (this is complicated in the countries in Europe that have made doping a criminal offense). In other words, the sport should be self-governing in terms of determining its own rules. In WADA, athletes have almost no role in defining standards and thresholds, although there is an athlete committee.

I agree with Noll that effective self-governance is an important bulwark against WADA’s perverse incentives and the problems arising from external legal encroachment (and further government involvement) in sport. Had the UCI been effective and transparent in promoting and enforcing anti-doping policies, they might have prevented the Festina affair, or penalized it ex post effectively enough that an external public-private organization would not have been created.

But I think the institutional design issue is trickier than that. An organization like UCI would still have conflicting incentives as long as it is responsible both for the determination of rules/penalties and the testing and enforcement of those rules. Suppose the UCI implements a “good” set of rules  What incentive would the UCI have to enforce such rules?  As long as one organization is responsible for both rulemaking and enforcement this tension is inherent, and detrimental to the credibility, the popularity, and the profitability of the sport.

I’m suggesting a more collaborative, networked (dare I say stakeholder) organization for cycling governance. In this model the riders, team directors, sponsors, and industry have a voting role in decision-making, on matters from bicycle weight to banned substances and thresholds. Those rules should be transparent and allow riders due process (including no immediate public announcement except for in competition when it’s obvious) and a right of appeal (which is currently lacking). If UCI is determining those substances and thresholds, and penalties, they should not be involved in testing for enforcement, which should be administered by an independent third party. WADA/USADA as currently constituted do not meet a reasonable definition of independence, though, which is one reason why this is so tricky to change from its current dysfunctional institutional design.

Is there a way out? I think the way out is to follow the money, and that’s where the Rabobank sponsorship departure is painful in the short run but may help to realign these perverse incentives at UCI in the longer run. The way out has to be through cultural change from fans and sponsors to agitate for change at the UCI. Their leadership is no longer credible; they have lost the trust of many fans, team directors, athletes, sponsors (as reflected in Rabobank’s comments), and industry members. That lost trust now means lost revenue, and that changes the equation for UCI — losing sponsors because “the international professional world of cycling [cannot] make this a clean and fair sport” may prompt some rethinking, change in leadership, institutional change within UCI. And it should. One suggestion moving in that direction comes from Doug Ellis, co-owner of Slipstream Sports, who suggested on Twitter that “Maybe it’s time for a sponsor summit. If the people putting money into the sport demand change, there must be change.

Great sports journalism: Jason Gay on Jens Voigt

Lynne Kiesling

I’ll spare you my observations on this year’s Tour de France, which I am enjoying mightily. Today, with three huge Alpine climbs, features both grueling riding and gorgeous scenery; I’m watching a descent through a series of steep hairpin turns as we speak. But I will share one thing, because Jason Gay’s recent article, Nobody Suffers Like Jens Voigt, in the Wall Street Journal is an excellent example of sports journalism. Gay writes about everybody’s favorite member of the peloton with the same energy, joy, and wit that Voigt brings to cycling:

But Voigt is cycling’s beloved superfreak, a cult object on two wheels. Cycling fans can be combative—they will argue about riders, teams, doping charges, seat angles, handlebar tape, frame materials, the coffee, and then the handlebar tape some more—but Jens is a rare point of agreement. Everybody loves Jens.

Voigt is adored because he rides a bike like it’s his last day on it. He is full gas, always. A race like the Tour de France can be maddeningly conservative—riders at the top of the standings watch each other, cover attacks, avoid risks, do just enough to cling to their position.

But Jens? Jens pummels the race. He rides like he’s fleeing a bank heist. He rides like he’s got a paper route with 100,000 papers. Voigt on a bike is a boxing match—relentless, confrontational, jabbing, punching, attacking.

Over his long career, Voigt has won big races, including Tour stages. But that’s not why he recently got 40,000 followers in a couple days after opening his Twitter account, or why there’s a jensvoigtfacts.com website with Chuck Norris-type tributes. (“Sharks have a Jens Voigt Week.”)

Jens Voigt’s energy, enthusiasm, joy, and endurance reflect his passion and sense of life and good-natured wit, and Gay has captured that well with excellent, lively writing.

John asked for a cycling post …

Lynne Kiesling

… but this is an econ post too. John Whitehead was kind to refer to our November lunch conversation in which we discovered a shared interest in cycling (to go along with our shared interests in economics, environmental economics, and beer). There are some ways that even individual recreational cycling reflects core economic ideas, particularly about specialization and comparative advantage (don’t even get me started on the economics and strategy of professional cycling …).

Take the duration of activity, for example. From exercise physiology we learn that we have differentiated muscle fibers, categorized roughly into fast twitch and slow twitch. Fast twitch are the muscle fibers that engage for quick bursts, working with the anaerobic energy system in sprints and other short but intense activities. Slow twitch are the muscle fibers that enable you to work aerobically, over long distances and durations. Different people possess these types of muscle fibers in different proportions (think of that as your initial endowment), and you can develop more of one or the other at the margin, but given your initial endowment, you are going to have a predisposition toward one or the other. Just as in talking about trade and exchange, this predisposition has a lot to do with comparative advantage.

More after the cut … Continue reading

Weekend jaunt from Chicago: New Glarus, Wisconsin

Lynne Kiesling

The area around New Glarus, Wisconsin, is one of our favorite places when we want to get out of town. Great roads for cycling, camping, beautiful scenery, and of course the newly-expanded New Glarus Brewery. Gone are the days when we could get Spotted Cow and Uff Da Bock around here; now we have to drive to Wisconsin to get some. If you are not familiar with the area, this Gaper’s Block post provides a good weekend getaway guide, including recommendations for bicycling on the several very good trails in the area — especially good for families!

An illustration of comparative advantage from professional cycling

Lynne Kiesling

As a cyclist, it should come as no surprise that I follow professional cycling pretty closely, and have done for some time. As an economist, it’s a rich laboratory for seeing all kinds of different economic concepts and principles play out.

Today I found a good one in an interview with Dave Zabriskie of Team Garmin-Slipstream, who is currently the U.S. time trial champion and recently won the week-long Tour of Missouri stage race. One of the aspects of being a cyclist is being mechanical — some cyclists are all about knowing the ins and outs of taking their bikes apart and putting them back together, while others are just as happy to take it to the shop and let a professional mechanic handle it. Most of us  are somewhere in between, but leaning more toward letting the mechanics handle most of the bike work. The pro cyclists are not that different, as these comments from DZ illustrate:

schmalz Now are you the type of racer who doesn’t do any mechanical stuff; you don’t feel comfortable with that?

DZ [A hint of hesitation] I can do some of it.

schmalz What’s the toughest thing you can do? Can you do a bottom bracket?

DZ What’s there to do there?

schmalz Can you put one in, attach it to the cranks, and have it work?

DZ It’s got to sides to it. Well, the new ones are pretty easy. Yeah, I think I can do that.

schmalz I can’t do anything that goes through the frame. I don’t do headsets and bottom bracket stuff but I can do everything else. I can adjust cables, derailleurs.

DZ I’m at the point now where I just give it to them. I’m pretty close with some mechanics so I just hand it off to them and they dial it in real quick.

schmalz And you hve guys where you live and on the road you have team mechanics?

DZ Yeah.

schmalz So you’re not especially mechanical?

DZ Well, I keep it clean, lubed up. Air in the tires. I went through a stage where I tried to get into that stuff. I overhauled a headset and did some things but it’s just a lot easier and a more efficient use of my time to let someone else take care of it. [emphasis added]

Note how well he expresses the concept of comparative advantage — more efficient use of his time to train and ride his bike and rest than to work on his bike. It’s a really good illustration of comparative advantage. [As an aside, for teaching purposes: if the mechanic is a better mechanic and DZ is a better rider, then it’s a situation of absolute advantage as well as comparative advantage, but suppose DZ is both a better rider and mechanic … then it’s a pure comparative advantage play. Good example for classroom discussion.]