Fair Play!

by John Holbo on February 27, 2011

Megan McArdle quotes James Joyner on player compensation, in sports, and draws a moral concerning unions. Let me summarize Joyner’s argument, which is pretty generic and familiar in broad outline: major league baseball, the NBA, and the NFL have different systems of caps and regulations limiting pay and restricting free agency. Plausibly, the system that is best for fans, overall, the NFL system, is worst for some players. (Joyner actually says ‘horribly unfair to the players’. We shall consider this sweeping thesis about social justice.) The NFL is not a free-market-style competition between autonomous business units but a profit-sharing cartel organized to ensure rough competitive equality between teams. Winning teams cannot just convert victory into extra profit and plow that back in, investing in team quality to entrench their winning position, which would be less exciting for fans. See also: major league baseball. The NBA is intermediate: you have salary caps, but players have more free agency. As a result, cities that are nice places to live in if you are really rich have an advantage. They have an informal way round the cap, in effect. Which is, again, good for (some) players, but not for fans overall.

McArdle doesn’t provide a link to the Joyner piece, but here it is. The title: “athletes are ruining sports!” The conclusion: “The bottom line is that players are human beings, who ought to have the right to take their talents to South Beach — or wherever they’re wanted. Just like fans can do.” This is, as Joyner is clearly aware, a bit of a paradox: athletes are making the game worse and they ought to have the right to do so. The ‘cure’ – namely, restrictions on pay and mobility – is ‘worse than the disease’, because it is manifestly grossly unjust.

McArdle seems inclined to draw the opposite conclusion: since the game is better if players are restricted in their bargaining power, and since the point is a good game, the proper, market-minded conclusion to draw is that employee bargaining power should, in principle, be restricted to ensure it does not conflict with productivity-minded management decisions. [click to continue…]