Penn State and the case for harsh, collective punishment

No sooner had the NCAA announced sanctions against Penn State than a legion of commentators emerged to insist that they were too harsh because they would strike innocents as well as wrongdoers. One critic wondered "whether a $60 million fine is worth destroying all the good Penn State has produced." According to another, the NCAA "hurt dozens of young students who had nothing to do with this whatsoever."

Let's grant that the cost of the penalties will fall on people who don't deserve them. So what?

I mean the question seriously. This is precisely what enterprise liability does and what it is designed to do.

Say a technology start-up 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 the rest of the company knew nothing about. If the company loses the suit, most of those smart, young people — innocent all — will lose their jobs. This is not a defense against the suit.

The philosopher Elizabeth Wolgast, in 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 punishment of "innocent or non-offending people."

This is the principle to which the critics of the Penn State sanctions are appealing: 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 will be hurt. This truism applies when a corporation that has fudged its numbers is hit with a huge fine, paid with money that might otherwise create jobs. It even applies when an outraged international community imposes economic sanctions on a rogue regime, because rogues will always let their poorest citizens go hungry.

We like to think of punishments 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 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 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 number 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.

But few student-athletes actually behave this way, and it's not clear that it would be rational for them to do so. The historian Ronald A. Smith, in Pay for Play, 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 is the relative weakness of the punishments.

This principle is well known in economics. Rarely is it rational to take precautions against losses that are highly unlikely. So if, as Smith suggests, cheating 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 have not 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 the penalties, too, make headlines. If schools that cheat were routinely hit with harsh sanctions, it would become rational for student-athletes to consider the possibility of future penalties.

But if Penn State's punishment remains sui generis — an especially harsh sentence for an especially terrible offense — schools will continue to have little incentive to avoid the many smaller wrongs that create the culture of corruption in college sports.