The Region

The Baseball Economist: The Real Game Exposed

Book Review

David Fettig | Vice President of Public Affairs

Published June 1, 2007  | June 2007 issue

I took it as an ominous yet promising sign when one of the parents of my son's Little League team leaned close to me and said: "I see that Joe Smith is our team's manager this year. That's fine with me—I'm sure we'll win a lot of games, but I just hope that the kids have some fun, too."

Book Cover: The Baseball Economist Finally, I thought, a manager who knows something about this subtly difficult game, someone who will push these kids beyond fundamental strategy, someone who is actually willing to take other parents' children and—gasp—challenge them. This, I had to see, and so I dutifully signed up as an assistant coach. (Little League parks are full of adults unqualified to coach at any level but who are looking for an excuse to grab their mitts and play catch on a grassy field, even if it means lunging at wildly thrown balls and watching their perfectly tossed returns bounce off their partners' mitts and drop to the ground, again and again.)

Joe Smith (not his real name) turned out to be a great manager—his passion only inspired the kids, and his methods were well within the bounds of accepted middle-aged behavior. But there were times I thought that he could, well, lighten up a little bit. For example, he would size up the umpire for each game (often some teenager working for minimum wage whose sole goal was to keep the game moving as fast as possible) and then apply appropriate influence by shouting, moaning, gesturing, applauding and otherwise acting melodramatically to try to get into the ump's head. So many Little League games turned on bad calls, Joe reasoned, that it was worth every effort to influence the kid in blue. Fine, but Joe sometimes would go so far as to call a timeout and march out to talk with the ump, a Little League faux pas viewed as Big League posturing by other adults. These displays would cause us assistant coaches to cower on the bench and practice our invisibility skills.

Seeking rent

It turns out that Joe was not only an effective manager for employing such techniques, but he was also engaging in a peculiar economic activity. He was "rent seeking," according to the economist J.C. Bradbury, author of The Baseball Economist. This doesn't mean that Joe was acting like a landlord; in the language of economics, it means that he was trying to improve his condition by transferring profits from one party to another. This is not how we're taught to play in the sandbox, and it's not the most uplifting of economic activities.

Society as a whole is worse off when rent seeking occurs. Expending resources to take something from someone else, such as when special interests work to coax favors from the government at the expense of their competitors, only benefits those who get the favor. Most importantly, the resources employed in capturing those rents could have been put to more productive use. Consider, also, that both sides play the game. Further, the economist Gordon Tullock showed that the amount of resources used to achieve the rent will equal the profits associated with the rent. So, if you want the equivalent of $10,000 in government favors for your business, prepare to shell out 10 grand in lobbyist fees and other costs.

What does this have to do with our friend Joe? Of the many jobs required of a baseball manager, one is to try to affect the outcome of an umpire's calls. There are many close calls throughout the course of a game, when an umpire's decision could seemingly go either way. It's at that moment, right before the call is made, that a manager wants an umpire to consider yet another chewing out by that certain manager. Bradbury quotes Tony La Russa, currently manager of the world champion St. Louis Cardinals:

When you go against somebody who is complaining all the time, you worry about how it affects the umpires. ... When I was a young manager, Earl Weaver at Baltimore played it that way. They challenged every strike.

This meant, of course, that La Russa had to engage in similar behavior, lest Weaver capture all the available rents. This turns into a sort of economic mutually assured destruction, the result being that no one is better off; indeed, the game is worse off because fans have to sit and watch managers stomp out to the ump, kick dirt, scream and engage in other nonproductive behavior that does nothing but delay the outcome of the contest. This is rent-seeking loss. Not necessarily good for baseball; definitely suboptimal for society.

Lesson learned. However, Bradbury, being an economist, goes further in his analysis and concocts a method to evaluate the rent-seeking abilities of major league managers. He then assigns a numerical ratio to each manager and ranks them accordingly. And that's when the fun really begins in this new Freakonomics-type book that focuses an economic lens on baseball. Economists can argue—and they do—whether such analysis is really economics or just clever data mining that employs economic tools, but I'll leave that argument aside for the purposes of this review.

Core concepts

One thing is certain, though—The Baseball Economist does more than analyze long-held baseball myths through the use of regression analysis and other statistical devices. The book also introduces core economic concepts, describes them and then illustrates them through the investigation of America's pastime. This alone makes it a worthwhile book for those wanting to brush up on their economic literacy, and if they can do that while reading about baseball—so much the better.

We've written before in these pages about the pedagogical notion of fusion, whereby economics (in this case) is taught in tandem with such courses as math, history and literature. (See the September 2002 Region.) Fusing economics with sports seems like a perfectly reasonable way to contemplate the dismal science, and may even be an effective way to pass along some economic pearls to the youth of America. Hey, if you've got to take your medicine, a little sugar doesn't hurt.

But baseball fans should not be frightened away by the prospect of economics lessons masquerading as sports talk. The Baseball Economist is, first and foremost, a book for baseball lovers by an unabashed fan (an Atlanta Braves fan, to be precise, but nobody's perfect). In this book, baseball is enriched by the economic considerations, and not the other way around. Bradbury's enthusiasm for the game comes through loud and clear, and his economics expertise informs the reader's understanding of the relative value of baseball franchises, the effect of steroids on players' performance, the importance of pitching coaches and even why there are no left-handed catchers, among many other questions.

Behind the plate

Take, for instance, the question about left-handed catchers, perhaps the issue of least import, but no less fun. This allows Bradbury to quote the Nobel economist George Stigler on how persistence signals the superiority of a practice.

[A] theory that says that a large set of persistent policies are mistaken is profoundly anti-intellectual unless it is joined with a theory of mistakes. It is the most vacuous of "explanatory" principles to dismiss inexplicable phenomena as mistakes-everything under the sun, or above the sun, can be disposed of with this label, without yielding an atom of understanding.

Or, as the economist Ed Green said in a December 2005 Region interview: "We start with the idea that, plausibly, what's going on is efficient." It's not enough to say that baseball managers have been stupid or inefficient or incapable of sophisticated analytics when they have not put a lefty behind the plate. In "real life," too, people are often thought of as persistently "irrational" or otherwise suboptimal in much of their habitual economic or financial behavior. Maybe that's true; maybe for a variety of reasons—information anomalies perhaps key among them—people make choices that truly are not in their self-interest. But economic analysis suggests that persistent behavior, over time, by a large group of people may actually indicate rational decision making and that critics of such behavior need a stronger theory to support their criticism.

So why are there no left-handed catchers in the game? Ask a baseball fan and you'll probably get one of the following replies, according to Bradbury: It's hard for a lefty catcher to protect third base; lefties have a harder time "framing pitches" and influencing ball and strike calls; limited lefty catcher's mitts means that Little League opportunities are severely limited and kids don't get the proper training. Of these, the first explanation seems the most plausible, but it is mostly refuted by the fact that righty catchers are perfectly capable of protecting first base and picking off a base runner who's holding a lengthy or languid lead off the bag.

In the end, Bradbury shows, it turns out that opportunity cost, that cherished chestnut from your first econ course, holds the answer. Left-handedness is so prized in baseball that if you have a left-handed player who has a strong enough arm to play catcher, he will, instead, be placed on the mound. "The opportunity cost of using a lefty who's good enough to catch behind the plate is using him as a pitcher," Bradbury writes. "If you have a left-hander with an excellent arm in a world where left-handed pitching is in short supply, you're probably going to want him to throw to a catcher rather than become one."

The bottom line

That last sentence is a nice indication of Bradbury's wit and easy-to-follow writing style; this is an important attribute for a book that applies tables, charts, equations and regression analysis to elucidate a game. That said, there is a certain amount of redundancy in the text as readers are reminded of key points or principles throughout the book, as if they were encountering them for the first time. Perhaps this is because of the relatively complex nature of some of the ideas in the book, or perhaps because these pieces began as stand-alone essays on Bradbury's Web site. Regardless, repetition in the cause of education isn't all bad, and some readers may choose to jump around from chapter to chapter depending on their topic interest.

In addition to his analysis, Bradbury includes a number of appendices, the first of which is titled "A Simple Guide to Regression Analysis," a rather oxymoronic title that might do little to inspire sales. But fear not, your Intrepid Reviewer has read this appendix so you don't have to, and here's the sound bite summary:

  • Explaining economic events is difficult, but we can isolate correlative factors.

  • Statistics allows us to assign numerical values that explain—with varying degrees of confidence—the correlation between these factors and the observed event.

  • Despite this analytical fancy footwork, we can never be 100 percent certain that our correlations are correct or that we've captured all necessary variables.

  • But with a social science like economics, which can't run controlled experiments, we take what we can get, and regression analysis at least offers a method of isolating factors and trying to determine their influence.

  • You're welcome.

Bradbury also offers a baseball statistics glossary, a list of useful Web sites and his crowning achievement, a 2005 Major League Baseball roster that lists, among other things, the gross marginal revenue of every player, that is, the dollar value of each player's revenue-generating worth to the team. Hits? Runs? ERA? On-base-percentage? Those data are so yesterday; Bradbury's new numbers reflect a player's contribution to the team's bottom line. For a game that has always been a business, this new method of evaluating talent would seem to have particular resonance for franchise management.

Branching off

Finally, a few thoughts about Branch Rickey, best known as the general manager of the Brooklyn Dodgers and most remembered as the man who brought Jackie Robinson to the big leagues, thus bringing an end to the segregation of America's then-favorite commercialized sport (or, rather, the beginning of the end of segregation, as other teams—and the Jim Crow South that still segregated players in its hotels and restaurants—dragged their feet for years). Bradbury lauds Rickey on this count:

Branch Rickey is the man all general managers aspire to be. ... [H]is most famous innovation was the integration of Major League Baseball, with the signing of Jackie Robinson to the Brooklyn Dodgers in 1947. This was not just an important ethical move and the beginning of the correction of gross social injustice. Rickey certainly realized the political importance of this moment, but even from a baseball management standpoint this was a fantastic move. It took advantage of an untapped labor pool that was ignored out of racial prejudice. ... Rickey saw an inefficiency in the market and exploited it at the expense of his competitors.

This description allows Bradbury to make a point about how Rickey's innovation was soon mimicked by other owners, thus diminishing his initial advantage until things leveled out among the competitors. "This demonstrates one of the other characteristics of innovation: successful innovative practices will spread," Bradbury writes. "Once the rest of baseball realized the success of black athletes, the inefficiency went away."

This is true, but the story is more complicated than that. Bradbury certainly knows this, but his book isn't necessarily the place for more details into sports history, so let's take a little detour and further plumb the depths of the business of baseball. For starters, black players before integration only constituted an "untapped labor pool" for the major leagues; they were already tapped by another business, namely, the Negro baseball leagues. And what many people don't realize is that Branch Rickey had a hand in that business, too. Rickey was really a sort of baseball entrepreneur in this regard—he later was instrumental in the Continental League, a major league competitor that never got off the ground but so threatened the majors that a number of its proposed teams became expansion franchises in the established league.

"The shame of Branch Rickey"

Book Cover: Don't Look Back Rickey got involved in an upstart Negro league that was formed, in part, to compete with two other dominant Negro leagues (at the same time that he was with the Brooklyn Dodgers). He was prepared to exploit segregation for profit, or promote integration for the same result. And he knew from the start that signing Robinson would roil those markets and change them forever. When Rickey shipped Robinson to his minor league club in Montreal, this move dominated attention in the Negro leagues and in black newspapers (which were influential). Rickey's move not only forced Major League Baseball to confront its segregated labor market, but it also put the heat on the Negro leagues, whose survival was suddenly threatened.

I'll turn now to a lengthy quotation from an excellent biography of Satchel Paige by Mark Ribowsky, Don't Look Back, my source for this digression:

[The] slow death of old-line blackball was at the heart of Rickey's plans. If Robinson made good in Montreal, leading to a shakeout in the Negro leagues, Rickey's intention was to get league stars not by dealing but by stealing.

This was the shame of Branch Rickey, who in all other ways was as courageous and visionary a man as any found in sports. It was no great crime that Rickey, as head of a flourishing business concern, was more Machiavelli than Lincoln; that he waited to see which way the integration pendulum swung before saying "I cannot face my God much longer knowing that His black creatures are held separate from His white creatures in the game that has given me [all that I can call] my own;" that he was prepared at first to profit from either integration or continued segregation.

Rickey would have been foolish to do otherwise.

And he wasn't alone in this regard. At the time of Rickey's Negro league machinations, Clark Griffith was making big money off blackball gate proceeds in Washington, and the New York Yankees—who would be relatively slow in signing a black ballplayer—were earning $100,000 per year in rental fees for Negro league games held in Yankee stadium. Rickey's machinations threatened these revenue streams, as well as those of black owners of other Negro league teams, and Rickey thus earned the enmity of both camps.

A rough-edged history

I had the pleasure of reading Ribowsky's book last summer while on a trip that took me to the Negro Leagues Baseball Museum in Kansas City, Mo., and I recommend both the book and the museum to baseball fans and to anyone interested in the history of race relations in America. Tempting as it is to mythologize those path-breaking events of 1947, especially during this 60-year anniversary when Robinson's iconic number 42 adorns ballparks across the country, it is also useful to consider the rough-edged history of those times, rather than the smooth legend that suits those Jumbotron retrospectives that play before ballgames. Robinson and other blacks who entered the game in that era are rightly idolized, but it should be remembered that the general managers and owners who signed them—who deserve some measure of praise for their courage—were motivated by more than social justice and inefficient labor markets.

A number of economic lessons can probably be drawn from this episode, beginning with incentives (for owners and players alike) and ending with competing industries that were complicated by segregated labor markets, but that's a task for another day. And just try to run a regression analysis on all of that.

In the meantime, pick up Bradbury's book for a refreshing take on the ol' ballgame, one that applies economic principles with sabermetrics (statistical analysis of the game). Bradbury calls his economic approach sabernomics. "Baseball and economics are to sabernomics what peanut butter and chocolate are to a Reese's Peanut Butter Cup," Bradbury writes. "While both subjects can stand alone, they are quite good consumed together." He's right, but I was thinking more along the lines of sauerkraut and bratwurst. Regardless, The Baseball Economist aids the digestion of the dismal science.