Football Law: Changing the Rules of the Game

Steven Horwitz,

Release Date
July 31, 2014


Basic Economics

What happens when the rules of a game change?
One of the most important parts of playing a game like football is that the rules remain predictable and consistent for all players. However, this doesn’t just apply to touchdowns and tackles – the rule of law is crucial to a well-functioning free market. The question at hand is whether or not this really does exist in the US; or are the rich and powerful benefitting from hiring lobbyists to get what they want and to protect themselves? In this video, learn from Professor Steve Horowitz what happens when the Rule of Law changes. What is the impact on our society, the economy, and YOUR life?

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Transcript — “Rules of the Game”

If you’re like most Americans, you know the basic rules of football. Touchdowns are worth six points. Field goals are worth three points. But what would happen if they suddenly changed the rules? What if the value of a field goal suddenly went from three points to five points?

We can make some guesses at some of the consequences of such a rule change. For example, game strategy might change.  “And they’re attempting another sixty-yard field goal.” “Fourth and goal from the one-yard line, Don. But they’ll take the sure five.”

Draft picks and salaries might change. “For the first time in NFL history, a kicker was taken in the first round of the draft.”

But these sorts of rule changes are problematic because there are likely to be major consequences that we simply cannot foresee when we implement them. Changed incentives mean that players and coaches will develop responses that are creative beyond our ability to imagine. The rule change itself, along with the unpredictable nature of these responses, makes it much harder for teams to plan ahead for the long run. And that it makes it harder to figure out how to win.

Will teams develop new defensive schemes for certain third-down plays where a field goal might be an option on fourth down? And if so, what sort of offensive plays and players might you want to draft? The more often rules are changed, and the more central those rules are, the worse these problems will become.

And when rules get changed once, it creates fear that they will get changed again. And this compounds the feeling of uncertainty that players and coaches have about the value of their skills and their game strategies. In games, we expect the rules to apply equally to all and to be enforced fairly. We also expect that they’ll have some permanence to them and not be subject to arbitrary changes.

And this isn’t just true in sports, like football. It’s true any time people interact. Take the economy.  Stable and predictable rules that apply equally to all are key aspects of what we call the rule of law, which is essential to a well-functioning free market.

But in many respects, we don’t have that kind of free market in the US. Corporations lobby for special regulations and exemptions that give them an unfair advantage over their competitors. Lawmakers, bureaucrats create new rules all the time. So it’s hard for people to keep up.

And once you start changing the rules while the game is being played, you create confusion about what the best strategies are. And you make people less willing to play.

The economic effects include making people less likely to make long-term investments. And that will slow economic growth. You also encourage more companies to seek their own favors from lawmakers looking to acquire wealth just for themselves instead of by creating value for consumers.

This is why changing the rules of the games — whether it’s football or the economy — has to be approached with great caution. The results are often unpredictable. And that uncertainty undermines people’s ability to plan for the future and to take the strategies that will win the game or create the wealth that improves the lives of all of us.