---- — In a negotiation, you might well have more power if you are powerless. Strength can be weakness, and weakness can be strength. Since 2011, these principles have been playing a significant role in conflicts between President Barack Obama and the House of Representatives.
To see the general point, suppose that you are a malpractice lawyer, representing a patient in a suit against a doctor. Your client believes that the doctor made a big mistake. He is very angry. He knows a trial wouldn’t be a lot of fun, but he likes the idea of seeing his doctor squirm on the witness stand. He is also willing to settle, but the settlement has to be on precisely his terms, which would give him a lot of money.
Your client’s position means that once you begin to negotiate, your hands will be tied. You won’t be able to compromise. That puts you in an excellent position. Your client is willing to endure a trial, which the doctor might well see as a worst-case scenario and perhaps even as intolerable. Under reasonable assumptions, you should be able to obtain a generous settlement.
The situation is different, and much worse, if your client tells you that he wants to avoid a trial, and if he gives you the power to take any reasonable deal. If you are so instructed, you can’t hide behind your client and insist that the only acceptable agreement is on his preferred terms. In fact, you might want your client to tie your hands, because that strengthens your position.
Now turn to the current fiscal standoff. For many Republicans and many Democrats, including the president, defaulting on the national debt is a worst-case scenario. For the participants, a central question is this: What exactly does the other side have the power to do?
Thomas Schelling, the recipient of the 2005 Nobel Memorial Prize in Economic Sciences, wrote the book on this topic. Speaking of those who represent workers in a labor-management dispute, Schelling drew attention to the strategic benefits of powerlessness on the part of labor’s representatives.
If the workers are themselves intransigent, their representatives may be able to obtain an excellent deal “because they no longer control the members or because they would lose their own positions if they tried.”
Schelling’s account uncannily presages the current situation in the House of Representatives. Many people believe that House Speaker John Boehner can’t control House Republicans and that if he makes certain compromises with Democrats and the president, he will jeopardize his position as speaker. In an important respect, this perception has greatly increased his authority. When House members tie his hands, they strengthen his hand.
Obama can also benefit from a degree of powerlessness. Some legal scholars contend that under the 14th Amendment, the president has the power to ensure that national debts are paid, even if Congress doesn’t raise the debt limit. If they are right, his bargaining authority is weakened.
The president has been claiming that without legislative action, the nation will inevitably suffer the terrible fiscal consequences of a default. If he can prevent those consequences on his own, that claim is weakened, and his bargaining position is undermined.
Obama has also found it important to say publicly, and on numerous occasions, that he won’t engage in negotiations with Congress until the debt limit is raised. Such statements don’t tie his hands, but they have a similar function, because it would not be so easy for him to backtrack.
In standard negotiation theory, there can be a significant bargaining advantage for the person whose hands are tied. But what if both sides end up lacking the ability to compromise? That’s a big problem.
As Schelling notes, such situations are dangerous, because they create “a risk of establishing an immovable position that goes beyond the ability of the other to concede,” thus provoking “the likelihood of stalemate or breakdown.”
Many malpractice cases do go to trial, even though it would be in the interest in both plaintiffs and defendants to settle. In a bargaining situation, powerlessness can be powerful, but it can also produce worst-case scenarios.
In previous negotiations, Boehner’s apparent powerlessness over House Republicans seems to have given him a strategic advantage. But in the coming weeks, the nation’s fiscal future may well require him to find a way to assert a measure of control over his flock.