Shadow of the Wasp
FreeDarko’s ongoing partnership with the The Chicago Sports Review and the pseudonym arms race it has inspired continues today with this article by A.C. Lilburne, which considers how the Death of Positions in the late-90s contributed to that era’s rampant contract/payroll inflation. Though you’ll have to go read the piece for the full, boring details, the basic thesis is fairly simple: that is, that unlike earlier leagues, whose economic efficiency had been predicated on a fairly rigid division of labor, the late-90s saw a generation of players for whom position and specialization were afterthoughts at best, and it was this breakdown in the traditional organization or work – not player greed – that precipitated the league’s fiscal crises. One piece of supporting evidence not mentioned in the piece is that even today, seven full years after the maximum salary rule took effect, most team payrolls continue to exceed the cap – an indication that something bigger than mere contract inflation is probably behind it all.
As a side note, let me just say that while I’m a big supporter of economists joining the basketball discussion, and I appreciate much of what they’ve contributed, their take on concepts like efficiency often seems more managerialist than scientific: their goal is to convince us of the way it should be, not to explain the way it is. My biggest complaint with The Wages of Wins isn’t so much with its failure to accurately measure the marginal product of basketball players, but with its presumption that a marginal product can be measured at all. As my own thinking about this stuff tends to be hopelessly continental and mushy, I’d love to see one of these economists get their Oliver Williamson on and actually explore the implications of the NBA’s imperfect-information/bounded-rationality/team-production problems, rather than simply substituting their own judgments for those of the front office.
(ps: please excuse the typos in the CSR piece, or at least refrain from mocking me for them).