Every day, there are many things I don’t do because I think they are fundamentally wrong. Some of those things might get me something I want, or closer to something I want, or away from something I don’t want to do, but I find them wrong so I don’t do them. This does not make me special, this just makes me a functional, civilized adult.
However, I don’t see myself as some inherently perfect paragon of virtue. I really do try to operate outside of simple, transactional self-interest, but simple, transactional self-interest does affect me. For example, my very self-righteous, Protestant-work-ethic desire to be employed and financially productive has wavered in direct response to how badly I need money. I measure my words online and at the office in large part because I (reasonably) fear the short and long term consequences of saying whatever I think whenever I think it.
In other words, I do a lot of things the right way because I have morals, but there’s a gray area where even I don’t know if I do some things because they are right, or because they are safe. That’s why, as a society, we try to make the right things safe, and the wrong things dangerous. It’s moral hazard!
Steve Ballmer and Moral Hazard
Steve Ballmer bought the Los Angeles Clippers a few years ago because he has effectively an unlimited amount of money. Despite this, he can’t just do whatever he wants with his team (like spend his infinite money to just sign all the best players), because he’s part of an association that has rules and restrictions on that sort of thing. Ballmer is in trouble because through some excellent journalism, it’s come to light that his star player Kawhi Leonard has been getting huge amounts of endorsement money from a weird, unprofitable startup owned by Ballmer and his Clippers ownership partner, for doing nothing. Effectively, this looks like money laundering to avoid the rules on how much teams can spend on their salaries, which is a pretty massive deal in the NBA.
Ballmer has denied everything and pleads ignorance on everything from his investment in this company to the particulars of how Leonard was compensated, but as more evidence is revealed each day, things are looking worse and worse for him and the team. Like, a lot worse.
When this story initially broke, one of the loudest forms of skepticism that I heard can basically be paraphrased as such — “Steve Ballmer is really smart, and this whole scheme seems incredibly stupid. While it’s nominally money laundering, it’s lazy, ham-fisted, and the idea that a kajillionaire business magnate who clearly loves owning and operating his basketball team would risk so much strains credulity.”
On the one hand, this is a pretty reasonable take. But it’s actually just a great reminder that culturally and morally, there is a huge disconnect between our expectations for how the world should/will work, and what’s required to ensure that it does that. While there’s this sort of baked-in assumption that these activities are risky for people like Ballmer, is that assumption actually valid? One of the first social science things I learned in college that really raised eyebrows was that while people spent a lot of time arguing about criminal punishments, the real driver for crime was whether people got caught at all. We focused on sentencing because it’s easy — those people have been found and convicted, so putting them in prison for any amount of time is trivially easy. One year, five years, a hundred years, whatever! However, actually catching people who commit crimes is much, much harder than you would think. It requires more than power and authority; it requires skill, resources, and lots of hard, boring work.
It’s hard to catch — really catch — people doing bad things, which is why so many bad things have been discouraged with penalties like shame, embarrassment, and reputational damage that don’t necessarily require a famous or powerful person to get truly, legally, undeniably caught. Historically, simply being associated with something like a corrupt, self-dealing cryptocurrency or shady real-estate scam has been harmful to people with big ambitions, regardless of whether it’s been specifically proven that they did whatever bad thing that association implies. It’s not “go to jail” harmful, and it never should be — the power of the state to take someone’s freedom away is enormous, and dangerous. But one of the reasons people lost their minds over “cancel culture” is because the non-legal, indirect consequences of people believing you are bad are really potent, and people don’t like when they have to pay them.
(As an aside, as with many social punishments, I don’t have a fundamental problem with “cancelling” famous people from fame and media exposure. I just sometimes have a problem — as many/most people do — with when we do it and who we do it to. That’s a boring answer, but I’m quite confident that it’s the correct one. The idea that as a culture, we should continue to focus our attention on the same people even if they say or do awful things is obviously stupid. It has nothing to do with free speech, and everything to do with bad, unprincipled editorial choices.)
But here’s the thing — just like we lack the physical resources to bring every criminal accusation to trial (and thus depend on a system of plea bargains just to keep the lights on), we lack the same resources to adjudicate every terrible thing that powerful people are capable of doing, so we depend on shame and yes, the threat of being “canceled” (it’s just… such an eye-rolling term, my God) to keep the world working the way we expect it to. In a shameless world, though, the system starts to break, and it makes sense for people with a ton of resources to simply fold their arms, deny everything, and demand the system adjudicate everything to the full extent of whatever the law is, because the law alone is actually pretty easy to survive if you are rich and powerful.
So I don’t know what Steve Ballmer did or didn’t do in this case, but I do agree he’s not stupid. However, given what a ruthless, smart, powerful person might see as his best option to move forward in 2025, I think Ballmer’s savvy might be as much of a potential explanation for his guilt as his innocence, which is a bad sign for everyone.