Gail Regan is vice-chair of Cara Operations, retired.  She chairs Energy Probe Research Foundation and is a member of the Canadian Association of Family Enterprise. She has a PhD in Educational Theory and an M.B.A. in Finance.  Her background in sociology and personal experience of business has given her an intellectual interest in the problem of evil.  

 

 

1A. Chapter #11 2010 SPR - THE BRD GAME SCRABBLE EXPLAINS ECONOMIC REFORM - THE MARVELOUS MAV SPRING SPECIAL 2010 JPG 

 

 

The Board Game Scrabble Explains Economic Reform

Chapter Eleven

 

 

 

The financial crisis and the subsequent recession were bad for business and employment.  I prefer a world with growing trade, extensive development and rapidly increasing wealth.  I hope that our leaders take effective measures to prevent discontinuities like these.

 

To be fair, there were some regulatory changes and there are more to come.  Given the huge economic loss, I wonder why fixing things takes so long.  Then I thought of the problems I am experiencing with the board game Scrabble.

 

Scrabble is played with hundreds of randomly distributed tiles, each with a letter and a numeric value, except for two tiles that are blank and valueless.  The rules of Scrabble are fair for beginners, but there is an inequity with advanced players.  Because blanks are extremely helpful for making bonus words, it is very likely that an experienced competitor who gets both of them will win by hundreds of points, thoroughly defeating the opponent who, lacking blanks, has little chance of catching up.

 

To overcome this inequity, we made a house rule that opponents can redeem a blank once.  The initial results were marvelous.  Games were open and fast-paced, bonus words became frequent and collective scores soared.  Notice that the prosperous Scrabble economy the house rule enabled depended on a blank not only being a sort of derivative, an instrument representing something else, but also a collateralized debt obligation.  (The played blank sits on the Scrabble board but can be redeemed by inserting the letter it represents.)  The house rule juiced our Scrabble scores just like complex banking improves trade, development and wealth creation.

 

Then things soured in Scrabble world.  Games became defensive, cramped and slow; bonus words infrequent.  Collective and individual scores declined.  We had induced a financial crisis and recession of our own.  I asked my opponents what had happened to cause this.

 

They said they find me too clever at bonus words.  Consequently, they stopped playing the blanks, in their view reducing their chances of large loss.  They prefer a slow, defensive game they have a chance of winning to a free flowing one with high scores that they are likely to lose.

 

I feel disappointed, because Scrabble is less fun now, and we may play less.  But there is no additional house rule that can entice my competitors to take risk beyond their appetite.  They tried this and it didn’t sit well with them.  I can’t make them play the way I want them to.

 

Similarly our leaders may vigorously think of new rules that encourage prosperity while preventing financial crisis.  But they can’t make business commit to an economy that is experienced as too risky.  Sadly, cautious business has opportunity cost.  The opposite, courage in business, revs the economy, increases employment and harnesses the world’s creativity.

 

 

 

 

 

 

 

 

 





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