A military official announces Barack Obama's arrival at the Nato Summit in Wales. Photo: Getty
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With his foreign policy, Barack Obama is trying to win by playing a loser’s game

If you’re playing a loser’s game, strategy is unnecessary. You avoid errors, but in dangerous times risk being buffeted by events.

At a press conference earlier this year President Obama was asked to define the “Obama doctrine”. After initially scoffing at the idea, he told reporters that insofar as he has a theory of foreign policy, it is about “avoiding errors”. To explain, the president adopted a baseball metaphor: “You hit singles, you hit doubles; every once in a while we may be able to hit a home run. But we steadily advance the interests of the American people and our partnership with folks around the world.” In private, Obama is said to express this philosophy even more succinctly: “Don’t do stupid stuff.” (“Stuff” is the polite version.)

Another of way putting this is that Obama conceives of foreign policy as a loser’s game. In 1975, an investment analyst called Charles Ellis published an article called “Winning the Loser’s Game” which he later turned into a best-selling book, regarded as a classic of its field. Ellis also used sport as an analogy. He cited a study which found that in professional tennis, 80 per cent of points are won through superior stroke play, while in amateur tennis, 80 per cent of points are lost, due to errors.

Amateurs and professionals, said Ellis, are playing two different games. Professional tennis is a winner’s game, in which it pays to take the initiative. Bold and aggressive tactics are the path to victory. The professional player thinks carefully about strategy and executes it ruthlessly. Amateur tennis is a loser’s game: the way to win is simply to be the player who makes the fewest errors. In golf too, the winner of an amateur tournament is usually one who eschews risky strokes and avoids penalties, letting the losers defeat themselves. The most common mistake made by amateurs is to play as if they are in a winner’s game.

Ellis used this distinction to turn the whole notion of investing expertise on its head. Investing, he argued, is a loser’s game for professionals and amateurs alike: the way to win, whoever you are, is to make the fewest errors.

Professional investors, including most fund managers, seem to be playing a winner’s game, in which the rewards go to the most skillful and smartest players – it is almost irresistible to believe that a successful investment manager is like a brilliant tennis player, outsmarting his peers and thus outperforming the market. But our faith in the superior performance of professional investors is, said Ellis, misplaced. The evidence suggests that most “investment managers aren’t beating the market; the market is beating them.”

This is as true now as when Ellis wrote his book. A new study of US investment funds, published in Financial Analysts Journal, concludes that while fund managers who did poorly in their first few years tended to lose their jobs, the ones who stayed in place for the long term weren’t consistently out-performing the market, but merely avoiding periods where they did particularly badly. The key to success in the mutual fund industry is to avoid underperformance, rather than achieve superior performance – much as it is in an amateur golf tournament.

President Obama takes a very cautious approach to the exercise of diplomatic and military power, and like his British counterpart David Cameron, he does so partly in reaction to the stance taken by a controversial predecessor. Bush and Blair approached foreign policy as if it were a winner’s game: they played aggressively, took risky shots and held to a theory of the game.

For Blair, it was an approach that reaped dividends in Sierra Leone and Kosovo, and in the wake of 9/11 Bush was widely acclaimed for his decisive action in Afghanistan. But in Iraq, the risk taken by both leaders on behalf of their countries appeared to backfire disastrously. The game changed.

Obama has caught the mood of the times by being far more conservative in his willingness to exercise America’s military power. But his first year in office, even he appeared to think of foreign policy as a winner’s game, albeit in a very different way from Bush. He aimed to fundamentally change the relationship between America and the countries of the Middle East. His Nobel speech reverberates with a desire to change the world.

But events shrunk his aspirations. In his second term, Obama has sought to win by playing a loser’s game. With the exception of very limited interventions in Libya, and now Iraq, he has eschewed the use of military power as a tool to shape the world. His determination to avoid making errors even led to him to allow President Assad to cross America’s “red line” by using chemical weapons, and get away with it.

President Obama’s startling admission last week that he did not have a strategy to deal with ISIS was not an accident. His strategy is to not have a strategy (he recently said that foreign policy is not “a chess game”). If you’re playing in a loser’s game, strategy is unnecessary. You take each move as it comes, avoid errors, and eke out incremental victories where you can. You play safe.

Here the analogy between investing and foreign policy breaks down in an instructive way. In investing, given a relatively stable economic environment, there are always low or no-risk choices: bonds, or cash, or firms that promise slow but steady growth.

But in foreign policy, even when you are the most powerful country in the world, there are no safe options. When the world is as volatile as it is now, each seemingly low-risk policy comes with a high risk attached. By deciding not to intervene in Syria, Obama may have allowed its civil war to spread to Iraq. By not confronting Russia more directly over the Crimea, he may have given it the confidence to seize Kiev.

This is the problem with playing the loser’s game in dangerous times. Attempting to play safe shots in a risky environment, you put yourself at the mercy of less cautious actors like Vladimir Putin or ISIS who play the game as if they are winners and occasionally bring off audacious victories.

Buffeted by events, and with no organising principles to guide your responses, you find your power leaching away even as you try to conserve it. Playing the loser’s game, you become the loser.

Ian Leslie is a writer, author of CURIOUS: The Desire to Know and Why Your Future Depends On It, and writer/presenter of BBC R4's Before They Were Famous.

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Donald Trump vs Barack Obama: How the inauguration speeches compared

We compared the two presidents on trade, foreign affairs and climate change – so you (really, really) don't have to.

After watching Donald Trump's inaugural address, what better way to get rid of the last few dregs of hope than by comparing what he said with Barack Obama's address from 2009? 

Both thanked the previous President, with Trump calling the Obamas "magnificent", and pledged to reform Washington, but the comparison ended there. 

Here is what each of them said: 

On American jobs

Obama:

The state of our economy calls for action, bold and swift.  And we will act, not only to create new jobs, but to lay a new foundation for growth.  We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together.  We'll restore science to its rightful place, and wield technology's wonders to raise health care's quality and lower its cost.  We will harness the sun and the winds and the soil to fuel our cars and run our factories.  And we will transform our schools and colleges and universities to meet the demands of a new age.

Trump:

For many decades we've enriched foreign industry at the expense of American industry, subsidized the armies of other countries while allowing for the very sad depletion of our military.

One by one, the factories shuttered and left our shores with not even a thought about the millions and millions of American workers that were left behind.

Obama had a plan for growth. Trump just blames the rest of the world...

On global warming

Obama:

With old friends and former foes, we'll work tirelessly to lessen the nuclear threat, and roll back the specter of a warming planet.

Trump:

On the Middle East:

Obama:

To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect. To those leaders around the globe who seek to sow conflict, or blame their society's ills on the West, know that your people will judge you on what you can build, not what you destroy. 

Trump:

We will re-enforce old alliances and form new ones and unite the civilized world against radical Islamic terrorism, which we will eradicate completely from the face of the earth.

On “greatness”

Obama:

In reaffirming the greatness of our nation we understand that greatness is never a given. It must be earned.

Trump:

America will start winning again, winning like never before.

 

On trade

Obama:

This is the journey we continue today.  We remain the most prosperous, powerful nation on Earth.  Our workers are no less productive than when this crisis began.  Our minds are no less inventive, our goods and services no less needed than they were last week, or last month, or last year.  Our capacity remains undiminished.  

Trump:

We must protect our borders from the ravages of other countries making our product, stealing our companies and destroying our jobs.

Protection will lead to great prosperity and strength. I will fight for you with every breath in my body, and I will never ever let you down.

Stephanie Boland is digital assistant at the New Statesman. She tweets at @stephanieboland