Tag Archives: Economics

NBA profits are not the result of “the market”

A few years ago it occurred to me that the absurd profits that flood the world of “marquee sports” are not the product of market forces so much as they are the product of ongoing, active distortion of market forces.

I happened to bury this minor epiphany in an offhand post speculating on Dwayne Wade’s work/life satisfaction, but since no one takes notice wherever I publish my work anyway, it seemed as well to just leave it there.

But, yesterday Vox saw fit to publish a work that basically dwells at length within this forest yet only sees the trees, so I suppose this is as good an occasion as any to raise my lone counterproposition to its own headline placement.

Briefly: Market distortions enrich the entire world of major league sports, on a fundamental level, to an extent that probably far exceeds the effect that smaller distortions have upon how the resultant “pie” is divided up.

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Basic Income vs Jobs

Politics produces endless strange outcomes. Yesterday, I encountered a Guardian item by Ben Tarnoff attacking universal basic income from the left.

Yeah, well, sure; why not?

I’m not sure that all of Tarnoff’s thesis hangs together, though a lot of his arguments are difficult to dismiss because other highly qualified voices support them. A long stretch in the middle basically rebuts that the popular narrative that economic inequality is the product of automation and “inevitable” globalization. Instead, the author lays blame on intentionally pro-elite trade policies (passed off as globalization), “the transformation of the tax code, the growth of the financial sector, and, above all, the collapse of [organized labor] since the 1970s.”

Economist Dean Baker makes and provides ample evidence for much the same arguments, almost every day. He has written more than once that “robots putting people out of work” is a red herring, and that automation is entirely compatible with full employment and a growing middle class, if we reverse policies that favor capital over labor.

I find his case persuasive, and generally endorse his specific prescriptions. Mr. Tarnoff’s objection to basic income seems a bit less convincing; a lot of it seems to be driven less by substance than style. He portrays the concept as a scheme by tech billionaires to “give us an allowance to live on, and keep the rest for themselves,” and “crumbs left by the bully who steals your sandwich.” In practice, though, I’m unclear that this is really all that different from his one-line alternative: “Better to own the robots collectively, and allocate the surplus democratically, than leave society’s wealth in the hands of its luckiest members.” Unless I’m missing something, basic income accomplishes two of these three objects, and it’s unclear to me how much meaningful difference collectivized robot ownership would make if the wealth produced by automation is redistributed. Possibly Mr. Tarnoff assumes that basic income must mean small-scale redistribution—”crumbs”—but besides its name I’m not sure that the concept is actually incompatible with much more aggressive leveling.

Meanwhile, though, I feel like something is missing from both his vague rebuttal to the “robots are going to take our jobs” story and from Mr. Baker’s more rigorous version. Both seem to assume on some level that society not only can produce lots of jobs despite automation, but should. I’m not clear that this is a very worthwhile goal.

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David Frum: crap jobs keep us safe

I’m beginning to wonder if the best that contemporary American conservatism can offer is interesting trolling.

Of those self-identified conservative writers who make some kind of real attempt at contributing to a wider discussion—rather than just playing to the sealed audience of e.g. Fox news and its talk radio or online analogues—two of the best examples I can think of today mostly seem to engage in some kind of value-added trolling. Reihan Salam appears to have settled into a natural niche at Slate, trolling so consistently that (in combination with Slate‘s basic raison d’être) I have to suspect it’s at least semi-intentional. Occasionally he produces some interesting new wrinkle on familiar controversies, though, rather than just endlessly repeating the exact same ignorant and inflammatory lines over and over and over. Not simple flamebait, i.e., but value-added trolling.

I think that David Frum, by contrast, is probably as sincere as he can be. But through the years of occasional encounters at The Daily Beast or The Atlantic, it seems like in practice much of his output can be summed up as a form of concern-trolling. That isn’t quite the right term, exactly, but it does come close. Frum seems to have found a niche playing that rare, reasonable, moderate conservative; the premise of his articles is frequently a critique of some instance of the mass of conservative politics going overboard. Except, when you read past the click-baiting headline, he generally proceeds into a non-shouty but otherwise standard affirmation that the real bedrock problem, whatever the situation, is liberalism. His reaction to the Conservative party’s wipeout in last month’s Canadian election was a classic example. Setting out from a premise that the Conservatives must avoid the tempting error of deciding that their message was just fine and they just need to continue saying the same things but louder… Frum wasted little time in declaring that the Liberal party has no real answers for Canada and will inevitably bring ruin to the nation, and that essentially the Conservative agenda is still the correct one in all significant aspects. Implying that, basically, they just need to continue saying the same things but louder.

This Friday, however, he may have outdone himself. His article’s headline promised an all-too-precious interruption of wisdom in the mostly brainless reaction to last weekend’s terrorist attack in Paris: “Bombing Syria Won’t Make Paris Safer.” Good for you Mr. Frum, I thought, let’s reward this with a page view… He managed to maintain some tenuous connection with the headline’s promise for three of four whole paragraphs. After that, oh dear heavens, David, have you really been engaging in the most amazingly subtle parody this whole time after all?

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00s flashback: peak oil

I know that the previous decade wasn’t that long ago, obviously. But it’s starting to feel that way now and then. Consider, for example, “peak oil.”

I can’t be the only one who recalls this meme, but again, it sure can feel that way. I swear that it has been years since I’ve seen any reference to peak oil. Which on one hand is not so mysterious; for various reasons, oil prices proved no more a one-way phenomenon than did house prices. But we still reference the housing bubble now and then. Peak oil, for all that I’m sure there are corners of the internet where it remains a hot topic, seems all the same to have vanished down the memory hole about as completely as anything does these days.

This is at the very least curious given that it was such a popular theory, particularly on the internet. I could probably find other looks-back at the issue, if I searched for them, but again it seems odd that I have not come across one. I read quite a bit of online crap, and I don’t recall seeing even one headline.

Therefore, if only for my own benefit, I’m preparing this brief examination, because: as much as I can be certain about anything, and to the extent that these words have any non-wriggly firm core meaning, “peak oil” scenarios were way, way wrong.

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Work: ask and ye shall receive?

One more thought about the persistent centrality of “work” to the 21st century economy. Kind of obvious, but it feels worth jotting down, and we are after all just a couple of days from the old Labor Day-bor.

It occurs to me this morning that, maybe, in some sense, contemporary society gets the economy that it demands. Or at least, the economy we get is powerfully shaped by what economic structures people focus on most. One of which is, most definitely, jobs.

Job creation, job creators, job growth; job losses bad; jobs added good! Job reports. The problem of joblessness. Get a job! Jobs, jobs, jobs jobs jobs jobs jobs.

Now, compare. How much is said about, say, leisure as a policy priority?

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Work, productivity, status, affinity

Last month’s flap over Amazon putting even its white collar workers through the mill struck me as mostly a non-event. Anyone truly shocked to discover that Amazon is exploitative, or that corporations squeeze the Eloi as well as the Morlocks, hasn’t been paying attention.

The week of pearl-clutching by Guardian columnists, et al., has however suggested to me one or two possible new connections in my evolving theory of 21st century work. At the moment, I write mainly to trace these out for myself, so fair warning that this post will be a bit elliptical.

As brief background, I’ve grown quite cynical about the modern economy and particularly the white-collar office. Years of close association with sales and marketing activities are probably an influence, but I have reached the conclusion that a lot of what happens in the typical office is largely pointless theater producing minimal if any social value. I have written before that many of the affluent, in particular, seem to work mostly as a display of status. (See Quantum Whatever, currently print-only but free copies remain available.) I don’t think this behavior is exclusive to the affluent, however, particularly as they tend to exercise much influence on the patterns of the typical workplace.

Seeing yet another bit of puffing about brutal conditions at Amazon has suggested a further insight into this concept. It occurs to me that a culture of status based on competitive displays of exhausting toil could have a deep biological foundation.

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Greek Crisis: Two Points

I have been glued to the news from Greece for about a week now. Most of this year, after years of ominous noises, I filtered out the regular repetition of such noises. The past week, however, I have had the Guardian and BBC liveblogs open from the time I get up until the time they sign off.

Last week was mostly just sheer chaos. For a few days I provided once-a-day executive summaries to a friend, but by the second half of the week I just gave up; disorder was so complete that events defied summary.

Yesterday’s referendum has reset things, sort of. At all events I’m ready to offer two comments, for whatever my perspective is worth.

One: Much of the prevailing narrative about Greece, particularly among creditor economies, is that Greece has been irresponsible, and must accept harsh discipline. Aside from all of the other problems with this narrative, I think it ignores that there are two sides to irresponsibility when enormous debt is involved. Some years ago I learned of a saying, probably an old one, but still very relevant; I believe it’s extremely relevant here. “If someone owes you $10,000, that’s his problem. If someone owes you $200,000,000,000, that’s your problem.” German determination to deny this reality seems at least as entrenched as Greek determination to deny any of the realities they’re accused of evading.
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The Economic Puzzles of Dwayne Wade

Conversations about professional athletes’ salaries hold a strange fascination for me. Probably because they are, fundamentally, strange; where else in our society do we have anything like this? When else do Americans discuss money and merit, ownership and labor, “fairness,” and the limitations of income-maximization as motive, in contexts that are frank, detailed, personal and public? Wrangling to assemble an elite team in leagues with both free agency and a salary cap has become a completely ordinary part of sports comment, no different from starting lineups or officiating. Then there’s the odd fact that one of the most vibrant and assertive examples of organized labor pressure left in America involves wealthy athletes, many of them multimillionaires, as its worker side of class struggle.

Of course this is interesting. Sometimes disgusting, and still interesting anyway.

Recently, one particular salary storyline has been nagging at me; I believe I have finally teased out an insight or two worth recording. In recent weeks Miami Heat guard Dwayne Wade has been signaling dissatisfaction with Heat owner Pat Riley’s salary offering. One can read further detail elsewhere, but basically I feel like a reader comment on one story summed things up best. After Dave Hyde referred to Wade’s “sacrifices” over his Heat career, erikszpyra asked “What past sacrifices really? The man has made over $100 million in contracts and endorsements from basketball, along with 5 trips to the Finals with 3 rings. What did Wade give up that warrants crippling the Heats [sic] chance to rebuild?”

Now, this situation by itself is just par for the course with pro sports coverage. Few phenomena have ever provided more perfect or obvious demonstrations of the obnoxious remark that, once one is securely rich, “money is just how you keep score.” Still, I can’t help marveling at what seems like a massive instance of missing the whole point. Dwayne Wade certainly has “fuck-you money” many times over, and from a working class perspective it seems like he should be long past the point of spending even a second caring about more money, and simply doing whatever he wants with his life. I’m familiar with the “hierarchy of needs,” yet I still can’t help asking, why is he expending effort on this? Why not just forget it, and live life on his terms? He’s competitive and likes to win, fine, great; consider what really constitutes winning in life. If he wants to play basketball, just play basketball.

It’s possible to think of reasons why Wade might want something that even his current wealth can’t purchase. That’s always possible. Absent any information to this effect, though, I will presume that he is not driven by aspirations to build the world’s largest pyramid or start his own space program. Likewise, it’s possible that Wade is fanatically dedicated to some charitable or activist cause, and eager to wrench as much money as possible away from less selfless rich people so that he can direct it to a disadvantaged population instead. If so, I submit that we definitely ought to read more about this, as such an example is at the very least worthy of popular discussion. Nonetheless, absent evidence, I presume that this does not explain Wade’s anxiety about getting more money while financially able to satisfy most personal needs for many lifetimes.

My impression is that, basically, getting more money is a significant part of what Dwayne Wade wants to do with his life right now.

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Trade treaty arguments’ conspicuous omission

In the wake of yesterday’s extensive coverage of the latest development (whatever it was) in the Obama administration’s quest to enact new “free-trade agreements” like the Trans Pacific Partnership, I realized there’s something notable about the associated arguments that I had not noticed before.

Sherlock Holmes memorably observed once, of the non-reaction of a dog at night, “that was the curious incident.” Even with this model before me, it has taken quite some time, but today I finally picked up on a similar absence from advocacy of new trade treaties:

Proponents aren’t promising jobs.

On the surface, this is easy to overlook because “jobs” are still part of the arguments. Mostly, however, in the form of opponents warning that these treaties will result in loss of many Americans’ jobs. Treaty proponents mostly, so far as I can tell, tut-tut and then attempt to change the subject to rosy forecasts for “growth,” or to disingenuous scoldings about protectionism, or to booga-booga-China-scary xenophobic jingo.

What I realized today is notable, however, is that not only are proponents saying little to refute directly the claims of job losses, they aren’t promising job creation. In 2015 American politics this is almost like not including an appeal for money. It’s so strange you might not even notice its absence at once but when you do it’s simply shocking.

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Tories, blue and red

I’m coming around to the suggestion that there is a common weakness at the back of Anglophone labor parties’ concurrent woes. That, i.e., their embrace of a triangulating “third way” approach which abandoned dedicated advocacy of the working class in favor of grabbing “the center” (as defined by the corporate elite) was short-term convenient, but long-term self-annihilation.

This is often called “neoliberalism,” but aside from this having always felt like an intentionally misleading term, it has occurred to me that in practice it basically amounted to trickle-down economics 2.0. In theory, center-left parties continued to advocate government intervention. But from Tony Blair’s “first you need wealth to redistribute” to Bill Clinton’s “it’s the economy stupid,” in practice this easily devolves into “just keep corporate stock values perky and everyone wins.”

That didn’t work. The New Economy has proved to be much like the old economy, a rising tide does not in fact lift all boats, and for labor to share in economic growth it still needs to fight for it via some organized counterweight to corporate solidarity. Union strength having steadily eroded in Anglophone society, that leaves political parties… which have been “consciously uncoupled” from working class advocacy for a generation.