Category: Christopher Newfield

Neoliberal Baseball

Taken in one way, the famous book (and then movie) Moneyball is a paean to the benefits of untrammeled competition. Some of the allure of sports is that it seemingly offers pure, uncorrupted competition, unsullied by issues of inherited advantage, racist prejudice, access to information unavailable to other competitors, or an uneven playing field structured by rules/laws that favor some players more than others.  Walk onto the baseball field, where the rules are openly known to all, and the umpires are impartial—and the results will go to the team that plays better.  (The Astros’ sign-stealing violates the equal information requirement.)

In Moneyball, intelligence and innovation succeed by doing what capitalists are supposed to do: find a more productive, cheaper, and better way to meet a need.  In this case, the need was to win more baseball games over a season than the competition.  And to do so while spending less money on payroll.  The trick was to value things the market didn’t value—and thus get productivity at a lower cost.  The stone the other builders rejected would be the Oakland A’s path to success.

Someone in the music business once said that the person who gets rich is the one who does it second.  The market needs to be softened up by the innovator—and then the copy-cat gets the biggest rewards.  Professional baseball embraced the “analytics” that drove the A’s innovative approach over a ten year span (or so). 

But—and here is where neoliberalism comes in—the terms of the embrace ended up reversing the priorities.  It no longer became a question of winning, except insofar as winning increased the bottom line.  Economics triumphed over the ostensible point of the whole pursuit—which is better called “the whole enterprise” at this juncture.

One key move was the conversion of WAR (Wins above Replacement; the key general numerical summary of a player’s contribution to his team) into money.  One WAR is deemed to be worth $8 million (that’s a 2018 figure; perhaps it has crept up a bit.)  In game terms, one WAR means a player will over a season of 162 games contribute to the team winning one more game than an “average player” would.  Added to the calculation of WAR is the ZIPS forecast system, which uses a player’s own history and a series of historical comparisons to predict the player’s likely future WAR over a given span of time.  In short, analytics produced a “scientific” measurement of any player’s “value.”  So much for market processes setting the price.  Now there was an “objective” measure of price. 

One more fact about baseball as a business needs to be added.  Players in baseball require a longer period of development than in basketball and football, the two other major money making sports in the United States.  Players can come straight from college (or even high school in the case of basketball) into the two other sports; there is usually two or three years (sometimes more, fewer times less) in the “minor” leagues before a baseball player is ready for the big time.  To compensate teams for subsiding these development years, those teams get to employ (the term used is “control”) players for the first six years of their major league careers.  In other words, players cannot participate in an open market competition for their services until they have worked for six years—often at a very significant discount from what they could earn if all teams could bid for their services.  There is no free market for the vast majority of players—since less than 30% of players even last six full years in the majors.

What has been the effect of this collision of analytics with the player control system?

Basically, teams now covet the younger, cheaper players as the way to keep operating costs down, while being willing to pay large contracts to “super-stars” (Mookie Betts, Gerrit Cole, Bryce Harper, Mike Trout).  The ones left holding the bag are the players who have been good enough to last six years in the majors, but who are in the one to two WAR a year range.  Few teams are now willing to pay (for example) $12 million a season for a player who is one to two games above the younger player who can be had for about $1 million for the season.  (Yes, it is possible to have a negative WAR; those are the players who don’t last.  As would be expected, a very large group of players clusters around the mean of 0 WAR; after all the whole system is built around identifying what is “average.”)

Let us now count the ways that this all resembles neoliberalism (admittedly an inexact term; but one taken in this instance not to refer to increasing privatization of once public functions, but to the current brand of capitalism that combines loud praise of free markets with various practices that, in fact, stifle competition; places economic return over all other considerations; and has a set of by now familiar strategies and consequences.)

1.  The evisceration of the middle class.  Baseball teams are trending toward having a top 10% (the superstars) on the big contracts and a set of disposable younger players cycling through during the “control” years.  The same growth of economic inequality we have been experiencing in the general economy.

2.  Taking advantage of the way the market is structured as the key to making money.  It is not through innovation, increased productivity, or a better product (see # 3 below on this point) that making money most depends.  Rather, the real key to financial success is working the system in your favor.  Competition is anathema to the neoliberal capitalist—as is risk.  The goal is to grab market share that is immune to competition and ensures little to no risk.  In baseball’s case, market share is secured by the control system and privileged access to the teams’ regional market.

3.  Branding is more important than the quality of the product.  It turns out that if you can maintain a loyal fan base, placate them with a superstar or two, then it doesn’t matter if you have a faceless supporting cast.  (College basketball has taken this to its ultimate logical absurdity, cycling in a new cast of characters every single year.)  The loyalty is to the team, not to the players.  Surprisingly, even winning and losing don’t matter than much given the bars to actual competition.  Yes, winning puts fans’ butts in the seats.  But it doesn’t much impact TV revenues so long as teams get to carve out their regional market—and keep other teams out of that market (as league wide rules enable.)  In short, a shoddy product is no bar to economic success.  Sound familiar?

4.  That the downsides of selling something mediocre are so low is because the real profits come from financialization, not from sales of a product.  Baseball teams are speculative investments—and like California real estate only seem to go up in value.  When the Kansas City Royals are sold for over $1 billion dollars in 2019 by someone who bought them for $96 million in 2000, even losing money on day-to-day operations over that 19 year period is a winning move.  In neoliberalism, it is the company’s overall valuation that is the source of wealth, not what it actually does or delivers for consumers. 

5.  Finally, it is worth noting that neoliberalism is usually associated with aggressive privatization.  But (as Christopher Newfield has demonstrated beyond doubt in his analyses of the “corporatization” of American public universities), the actual practice of neoliberalism (pharmaceutical companies are a great example) is to push certain costs of doing business (basic research for the pharmaceuticals, health care for its workers for Walmarts and McDonalds, transportation infrastructure for just about everyone) on to the public ledger in order to maximize its profits.  There is no more egregious example than the way professional sports teams get municipalities to build hugely expensive stadiums—ones that have a shorter and shorter life span. 

Moneyball may seem a charming story about how the wits of little Jack triumph over the Giant.  But we need to see how the Giant, although a little slow on the uptake, becomes the one who recovers to restructure the field once again to his advantage.  And how the Giant in the process repeats that classic move of economic activity: substituting the desire to accumulate wealth for the actual activity that was the original pursuit.

The Right-Wing Attack on the Universities

Chris Newfield has a response (lifted from Facebook) to my previous post.  Here it is (in quotes) followed by my reactions to his comments:

“I’m reposting this because I meant to comment on this before. Thank you John McGowan for raising so pointedly both the Right’s systematic attacks on public universities and the question of their end game. To amplify what you’ve written, I think there are two big things going on.

One is a struggle for political control: 40 years of culture wars has convinced the Right that universities are a block arrayed against them, and with few exceptions it favors their political enemies. The university seems to them to have powers of deep cultural change and not just of truth-claims that generate policy and lawsuits, though those are also a major threat.

The second thing is their real economic plan, one that I detail in Stage 8 of the book. That is to cut capitalism’s dependence on knowledge and knowledge workers–to move it “past the knowledge economy,” though no one ever uses that phrase. This involves reducing brain workers’ independence from management, shrinking the middle class, particularly its politically troublesome “liberal professions” (in the French sense), freeing employers of any obligations to their direct employees (health care, pensions, shared governance through unions or employee representatives), and dumping any and all social costs. In the Right’s traditionalist capitalism, poor people have existed to provide fungible and hence precarious labor on demand, not to get better educations than their parents had; everyone should be fireable at will, etc.

The Right’s model makes cultural and economic sense in US history: it remarries corporate ownership to patriarchy, affirms de facto white supremacy, helps restore an earlier dependence of women on men, to name just a few cultural features. And it makes economic sense in the context of the American extractive economy–which requires mass quantities of cheap docile labor via slavery, then Jim Crow and immigration without rights– that is historically the bedrock of American wealth, and still is in most “red state” sectors of the country (e.g. NC’s hog and poultry agribusiness).

In short, the right’s “endgame” is the restoration of plantation capitalism. It will have new forms, but the key economic strategy is the prevention of knowledge workers from keeping the value of their productivity gains, which requires they be marginalized politically. The Great Mistake also discusses the various ways university administrators have played into the Right’s hands on economic as well as policy matters. At the same time, I’m fairly sure that if more regular voters understood what the weakening of universities will do both to their salaries and their status in society, these NC-style attacks would lose most of their (already mostly passive) support. I think the national politics are more fluid than they appear.”

I agree with Chris that red states (especially) are pursuing a strategy that undercuts the “knowledge-based economy” in pursuit of a nostalgic vision of “manufacturing” that fits the “extractive model.”  But I am more convinced than I am sure he is that such a strategy is hopeless.  The Alabamas of our union are condemning themselves to comparative poverty—and the agony here in North Carolina is watching a state that has attracted a fair share of the knowledge based economy to these parts work to dismantle it and become Alabama instead of Massachusetts.  In other words, I don’t see where the right can win if it is playing the game that Chris describes—and I think much (hardly all) of the business elite understand that fact.

That said, it is worth saying a few further things.  One, North Carolina’s prosperity is largely based now on the Research Triangle Park (RTP), which was built as a private—public partnership between businesses, state government, and the three research universities: Duke, UNC, and NC State, starting in the late 1950s.  That kind of public investment—as opposed to the kind of negative investment of tax credits epitomized by the new FoxComm deal in Wisconsin—is pretty close to unthinkable today.  The difference is that the positive investment of public dollars gave the public a place at the table in the planning of the RTP, with largely positive results.  It was also based on a fifty year plan that proved to be fairly accurate about the challenges facing North Carolina (decline of textile, tobacco, and furniture industries) and pretty accurate about what could replace those lost economic drivers.  There’s a decent case to be made that the original fifty year plan is now outdated and that the RTP needs a serious reboot and rethink at the moment.  Not surprisingly, the ability to forge the kind of partnership that got things rolling in 1957 appears totally lost.  But there is also no coherent vision of what the next fifty years will see us requiring.

There is no denying that North Carolina’s prosperity is very, very unevenly distributed.  This is not just about income and wealth inequality, which still does not reach Northeast levels (New York, Connecticut, Massachusetts) in this state, but is nonetheless real.  It is also about geographic distribution.  The eastern and western parts of the state are far poorer than the prosperous Piedmont in the middle.  Given the structure of American political districting, which gives disproportionate power to rural over urban voters, the legislature is skewed toward those who are not beneficiaries of the knowledge economy—and who, in many cases, view that economy as their cultural and economic enemy.

If nothing else, the left should be pushing for a realistic “living wage” for all workers and for basic job security and health/retirement benefits.  I don’t see any realistic alternatives to a market economy.  That’s where I am liberal.  But I do think there should be strong state intervention in/regulation of that economy.  On the intervention side, some measures should address market forces directly (like a high minimum wage) while other measures—primarily progressive tax rates—should mitigate the market’s tendency to produce extremely unequal outcomes.  That’s where I am a social democrat.

And, as my last few posts have suggested, I believe the tax revenues should be devoted in part to investment in infrastructure.  I take universities—and the creation of an educated citizenry—as part of that infrastructure.  Even if the right wing refuses such investments—and, in fact, as Chris suggests, desires a return to “plantation capitalism”—I don’t see how such a strategy can be anything but self-defeating.  The knowledge economy will leave the Alabamas in the dust.

Note that all of this says nothing about “finance capitalism.”  New York (and the way wealth is generated there) is not California (Silicon Valley).  The relation of finance capital to education is very complex—as is suggested by today’s Kevin Drum piece about the way that membership in a fraternity increased lifetime earnings by a whopping 36%.  That wouldn’t come as any surprise to anyone in the development office at UNC.  All the Wall Street guys were frat boys back in the day.  And the measures needed to regulate/intervene in finance capital (starting with a transaction tax, a meaningful increase in capital gains tax, and strict rules about computer trading) are different than those called for when dealing with Google, Apple, and Facebook.

Finally, I agree with Chris that the political situation in this country is more fluid than might appear.  One of the left’s biggest problems has been its inability to overcome the “passivity” of which Chris speaks.  I was astounded—and still am—by how quietly the unemployed took their fate in the wake of 2008.  They crawled into a corner, ashamed, and licked their wounds, as if it were a personal flaw that led to their being laid off.  I don’t understand that.  There’s an enthusiasm gap, at least when it comes to electoral politics, that is fatal in the low turnout on the left for mid-term and local elections.  Counting on 75 year old Bernie to solve that problem is a formula for disaster.  We need some you, fire-breathing, and inspirational leaders.  I think there are plenty of people out there who could be inspired by such a visionary.

Destroying Public Education


Chris Newfield’s The Great Mistake (Johns Hopkins University Press, 2016) is a passionate denunciation of the failure to preserve (over the past 20 years) the incredible system of public higher education created in this country between 1945 and 1970.  He places much of the blame on the acquiescence of top-level college administrators in the steady, slow drip of year and after year reductions in state subsidies. Death by a million cuts–without any strong push-back or effort to forge a constituency that would lobby against the cuts. As with our decaying bridges and power grid, we have witnessed a persistent refusal of our society to invest in the upkeep and growth of basic infrastructure.

In North Carolina at the current moment, the animus against public higher education is not a matter of simple neglect or short-sighted stinginess.  There is an active push to dismantle the state system, an attack that ranges from undercutting student aid packages for less well-off students to interfering with core curricular programs to shutting down research institutes and centers.  None of this has the slightest economic rationale, since the universities are demonstrably the economic drivers in a state that has managed the transition away from its traditional industries—tobacco, textile, and furniture—to the “new” economy reasonably well.  (Poverty in the state is still a severe problem, but located precisely in the eastern and western regions that are furthest away from the universities.)  No, despite all their talk of economic rationales, the Republicans in the state legislature simply hate the universities, especially Chapel Hill, for everything that we stand for: the “liberal” values of free thought and diversity.

In one conversation this week, a fellow faculty member who (because of fund-raising responsibilities and by virtue of his academic discipline) interacts often with these powerful—and hostile—critics of the university, said that he can never figure out “their end game.”  After they cripple the university, what is the utopia they imagine?  What good will they have achieved?  They seem to be set on destruction for destruction’s sake.

I mentioned this conversation to another academic later in the week—and he offered a theory.  Your mileage may vary.  But I found his thoughts intriguing and, at least, semi-plausible.  Education is a billion dollar “industry” that remains frustratingly outside of normal profit-taking business.  Destroy public education and you create a whole new market for capitalism.  Think of it as equivalent to health-care.  We know that providing health care is a public good and a human necessity.  But keeping the provision of health care private means large profits for insurance companies, pharmaceuticals, and various other players.  Now think about an education sector structured in similar ways.  Education is also a public good and a human necessity.  Piles of money to be made if it is privatized.

None of this requires a conspiracy theory.  Just the knee-jerk hostility to everything that is public among our free-market ideologues and the determined effort to erode all publicly provided services and goods.  Outsource it all—so that someone somewhere makes a profit, even as working conditions for those in the trenches get steadily worse and the actual beneficiary of services is left to fend for himself or herself.  A scary and depressing thought, precisely because it is a future too easy to imagine.

Newfield’s The Great Mistake: The Big Picture (2)

Newfield’s The Great Mistake: The Big Picture (2)

The second “macro” setting for the disinvestment in public education that Newfield highlights is the disconnect (since 1970) between rises in productivity and rises in wages.  Since economic growth is driven primarily by two factors–increasing population and increasing productivity–the economy’s health is dependent on making workers more productive.  At least in the years from 1940 to 1970, when workers became more productive, their additional contributions to the economic well-being were registered fairly directly in higher wages.  And those higher wages tracked very closely with higher household incomes.

Continue reading “Newfield’s The Great Mistake: The Big Picture (2)”