Anthony Painter

So a gross injustice was done last night to a muscular and technically adept Ghana side. I thought they were great against the USA and hoped they would prevail in what was a very even match against Uruguay. And they would have done had Luis Suarez not blatantly and deliberately handled on the line. Ghana missed the subsequent penalty. Suarez is the focus of much contempt this morning- across the globe. And though he has hardly distinguished himself it is not clear that what he did was a ‘cheat.’

Football is regulated activity much in the same way that banking is. In an ideal world people behave with honesty and honour. They do the right thing without having to be monitored and reprimanded. In high trust societies you can dispense with the transaction cost of laws and regulation, customs and mores sort it out. In such societies you only really need light level regulation and enforcement to guard against the risk of error that can still have negative consequences. Errors certainly happen at the World Cup. And there is a lot of cheating too.

In this respect, the World Cup is akin to a low trust environment such as banking where asymmetries of information benefit certain actors over others. There are so many different ways of interpreting the credit crunch (that will keep economists and historians occupied for centuries; me? I’ve got football to watch.) One is that there was a widespread and systemic failure of regulation that only came to light as a result of financial calamity. This view says little about the fundamental root causes of the calamity but let’s run with it for our purposes today.

Stephen Adshead, guest blogging on this site, detailed the contemptuous way in which a Goldman Sachs trader Fabrice Tourre, self-styled ‘Fabulous Fab’, wrote about products he was peddling:

23 January 2007 – “…More and more leverage in the system, the entire system is about to crumble any moment…the only potential survivor the fabulous Fab (as Mitch would kindly call me, even though there is nothing fabulous abt me…) standing in the middle of all these complex, highly levered, exotic trades he created without necessarily understanding all the implications of those monstruosities !!!”

These emails earned him and his employer, Goldman Sachs, a charge of two counts of securities fraud. The problem is that a month after his comments of January 23rd, he was still peddling the monstruosities [sic]. But this would have been widespread in the rip-roaring Wild West years on Wall Street and in the City of London. The difference was that Fabulous Fab got caught. Why? Because the bloody doors had been blown off the whole racket as the financial edifice crumbled. In another time, another economy, Fabulous Fab would still be, well, fabulous. Instead, Fabulous Fab is now a monstruosity.

If no-one had lost anything, it would have been fine. The weak financial regulators would never have known a thing.

I don’t know whether Fabulous Fab is a football fan or not. If he is he must be feeling a little sorry for himself. How galling it must be to look at Luis Suarez being held aloft like a hero for what the whole world regards as a cheat. But there is a difference. What Fabricce Toure is accused of is a cheat- if he is found guilty he was exposing investors and the financial system more widely to risks that he did not communicate. In this regard, he would be more of handling Thierry Henry against Ireland, or a diving Abdul Kader Keita for the Ivory Coast against Brazil resulting in Kaka’s sending off, or, in the same game, Luis Fabiano’s double handball then denial to the ref. Here is that last incident in stills:

These were all cheats. But financial markets are different to football. They are private, difficult to understand, and difficult to monitor. Football is a panopticon. There is almost nothing you can hide from the camera’s gaze (illegal substances perhaps but little else.) Financial regulators have immense difficulty catching a Fabulous Fab and it is mainly during times of crisis that their reckless risk-taking becomes obvious. FIFA- which regulates world football- has every opportunity to catch and punish cheats so they do not prosper. They choose not to.

It would be easy to introduce video technology to intervene to stop Henry’s handball. If it was used, he’d just own up and would be booked if he didn’t. It shouldn’t be down to the ref to ask Luis Fabiano whether he handled it. He should have proof. Again, if Fabiano didn’t own up right away he would get a yellow card. And as for Keita, he would be the recipient of a yellow card and preferably a fine rather than his innocent opponent. All these cases are in the same category as Fabulous Fab.

And yet FIFA chooses not to act. The difference between FIFA and financial regulators is that there isn’t a financial crisis to drive action. People are not going to stop watching the World Cup if FIFA doesn’t act so why should it care? It removes the very worst excesses and is blasé against anything else.

Where it does act it is limp-wristed. And this brings us on to Luis Suarez. He didn’t ‘cheat’ as such. He broke the rules. He was caught. He was punished- with red card and a penalty to Ghana- and he knew that was the price. Tough you might say. Only it wasn’t. Ghana were denied a certain goal and were given a 12 yard shot at a goal in exchange. The punishment didn’t fit the crime and Luis Suarez knew this. It was not his fault but FIFA’s. He chose to break the law and do the time. There was a price; he paid it. The price was cheap- and that is why he was held aloft by his team-mates and is now a national hero.

It was disgraceful and unsporting but it was not a ‘cheat.’ It was a blatant and open breaking of the rules which is different.

He is not the first and will not be the last. FIFA doesn’t care. The money comes in anyway and that is its priority. Until the World Cup is regulated by body completely independent of FIFA with a brief to eradicate cheating from the game then it will remain the same. But what will create the incentive for FIFA to sort this out? The reality is only by better and more principled leadership- no external force could be strong enough to change it.

Until that happens there will be cheats, injustices, and unsporting national heroes. What a great moral force world football has become. Cricket or rugby anyone?