TRB From Washington: Field Mice

by The New Republic | September 5, 1994

Well, if every kid in America wrote a note or a card ... and said, "Act like grown-ups, owners and players," I will guarantee, if they write to me at the Labor Department ... that those letters and those cards will go to the owners and players.

--Secretary of Labor Robert Reich

Good idea. And kids, while you're at it, how about dashing off a note to the Tutsis and the Hutus? O.K., O.K., I guess I can understand why politicians would confine their remarks on the baseball strike to feeble pleas for mutual understanding. (President Clinton: "I just hope that in the days ahead they will search for a way to get back together.") After all, the nation is about evenly divided on who is to blame, and we wouldn't want anyone to look as if he were taking sides.

Still, it's tempting. Notwithstanding the studied impartiality of many observers (e.g., The New York Times and The Washington Post editorial writers), this strike isn't really a tough call. Indeed, it's a welcome respite from the moral ambiguity of contemporary liberalism, a chance to see a bunch of white hats lined up against a bunch of black hats. Just as in the good old days, before neoliberal analysis and global competition stripped labor disputes of their simple clarity, management can in this case be safely characterized as self-indulgent, deceitful, blood-sucking vermin. There. Feels good, doesn't it?

The owners' main demand is, "Stop us before we spend again!" They want a "salary cap," stated as a percentage of revenue, that will control their urge to give players huge paychecks. The logic seems to run along the lines of the "Tragedy of the Commons"--the famous academic metaphor in which flocks of (say) sheep graze public land so heavily that the grass starts to die; thus all sheep will perish unless their shepherds make a binding pledge of self-restraint. The salary cap is that pledge.

One oft-noted weakness in this argument is that the grass, in truth, is not dying. The owners originally claimed that nineteen of twenty-eight teams were losing money, then that twelve were. Analysts now figure that the real number is closer to five. As Henry Aaron (the Brookings economist, not the Braves' home run king) observed, whatever the owners say about this question is dubious, since they're in the habit of hiding profits with clever bookkeeping to qualify for government stadium subsidies.

But to really appreciate how little sympathy the owners deserve, you have to go beyond dollars and cents. People don't own baseball teams to make money--though, of course, they're happy to grab any that comes along; they own teams so they can be team owners--emit a special glow at cocktail parties, be seen on T.V. sitting in sky boxes or, conceivably, just because they love the game. Everyone needs a hobby.

Economists call this sort of reward "psychic income." Once you add it into the accounting, various things fall into place--in particular, the bidding wars that produce the giant salaries that the bidders then decry. The ultimate in psychic income, after all, is to win a championship, to be in that late-autumn locker room, champagne dripping down your face, with Bob Costas interviewing you while several great athletes pretend you're one of the guys. Of course, this may bring a large non-psychic paycheck, too. Still, if money were the sole object, owners wouldn't pursue victory so wildly.

Consider the local example, the Baltimore Orioles. Last year they were bought by a lawyer named Peter Angelos and some co-investors. The Orioles' 1993 payroll of $30 million had ranked in the American League's bottom one-third, while the team's attendance of 3.6 million was the seventh-best in the history of baseball. No one trying to maximize dollar income would fiddle much with such a cash cow. But the new owners went on a spending spree, acquiring four big-name players and adding $10 million to the team's payroll. As often happens in such cases, magic failed to ensue. Only one acquisition has entirely panned out, and the Orioles are roughly where they were at the end of last year: playing above .500 but not by enough to make the playoffs. Had the strike not occurred, 1994 profits would have come in at a projected $8 million--down from $25 million the year before.

Whose fault is this? Newly acquired pitcher Sid Fernandez? For accepting a big salary and then having the sort of erratic year that anyone familiar with his career could have guaranteed in writing? Or Chris Sabo, the third baseman whose history of back trouble predictably continued? Peter Angelos is the one who placed these long-shot bets, and he did so because, though the possible financial payoff didn't justify them, the possible psychic payoff did.

Basically, baseball owners are rich people who pay talented people for the privilege of basking in their reflected glory. That almost all owners are making a financial profit in addition to this large psychic income is just evidence that baseball's anti-trust exemption is in some ways a welfare program for the already wealthy.

Granted, the players are making out okay, too (though most earn way less than the $1.2 million billed by the owners as "average"). But what's to mourn in that? Many, perhaps most, came from working-class backgrounds, and many are minorities. Baseball isn't as heavily black as basketball or football, but it's more so than the general populace, and it's heavily Hispanic as well. Minority athletes can plow their riches back into the community in various ways, from buying houses for relatives to buying urban businesses, such as Julius Erving's Coca Cola distributorship. And they sometimes become noted entrepreneurs or philanthropists. Who could forget champion base stealer Lou Brock's "Broccabrella"--the baseball cap/umbrella that he parlayed into a multi-million-dollar novelty-item company? Beloved Met Mookie Wilson and history-maker Curt Flood (he fought the original battle for free agency) started foundations for poor kids.

In this country we sometimes go to great lengths to transfer money to members of minority groups--by, for example, setting aside government contracts for "minority-owned" companies. Now, you could argue over whether it makes sense to thus meddle with markets in an attempt to create a few affluent blacks and Hispanics, especially since many of them were already affluent. But how could anyone defend what the baseball owners want--to take a market that naturally creates affluent blacks and Hispanics and meddle with it to stifle this tendency? Talk about blood-sucking vermin!

Maybe a baseball strike is indeed too hot for any smart politician to touch. But player unity and owner dissension already suggest that the salary cap is doomed. Robert Reich would be doing a public service by stepping in and, with some candid rhetoric, hastening this day. He could then sit back and wait for the thank-you notes to roll in.

Robert Wright is a senior editor at The New Republic.

By Robert Wright

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