Billy Beane and the resource curse

Benjamin Morris posted a good analysis of the value of Billy Beane over at FiveThirtyEight.

To be conservative, let’s just look at the period since Henry made Beane his offer: In the last 12 years, the Red Sox spent $1.714 billion on payroll, while the A’s spent $736 million. We can then break down what it could have looked like if Beane had worked for the Red Sox like so:

  • Let’s say it would have cost Boston the same $736 million that it cost Oakland to get the A’s performance with Beane.
  • At the hypothetical $25 million-per-year salary I suggested earlier, Beane would have cost the Red Sox another $300 million. (It’s possible that Beane would have wanted more, but it’s even more possible that they could have gotten him for less.)
  • The difference in performance between the A’s and the Red Sox over that period (where the Sox were as successful as at any point in the franchise’s history, and the A’s were supposedly stagnating after Beane’s early success) has been about 50 games for Boston. Since we don’t know exactly how good Beane would be at procuring additional wins above his Oakland performance, let’s assume that the Red Sox would have had to pay the typical amount teams have paid for wins in the period to make up the difference. According to the year-by-year price of wins from my calculations above, those 50 wins (taking when they happened into account) would have a market value of about $370 million (though this might have been lower with Beane in charge).

If we combine these — the price of the A’s performance ($736 million) plus Super-Expensive-Billy-Beane’s salary ($300 million) plus the additional 50 Red Sox wins at high market estimates ($370 million) – merely duplicating their previous level of success still would have saved the Red Sox more than $300 million relative to what they actually spent, and that’s with reasonably conservative assumptions. That’s money they could have pocketed, or spent making themselves even better.
 

Management and ownership are undervalued in sports (though ownership's compensation should include the equity value of the franchise which usually outweighs salary by a lot; it's just that ownership often selects management so they have a ripple effect on franchise competitiveness). It's the reason I have a Cubs jersey with “Epstein” on the back as my profile pic on Facebook. I consider the hiring of Theo Epstein as the Cubs President of Baseball Operations the single most important Cubs hire in my lifetime as a long-suffering Cubs fan, far outweighing the value of any single player. Forget all talk about curses; the Cubs have just been so badly run for so long that even random luck hasn't been enough to deliver a World Series title in over a century.

In December of 2012, Bill Barnwell did a great piece on how Jim Harbaugh was the most undervalued asset in pro football, and in his annual ranking of trade value in the NFL for the year ahead Barnwell still had Harbaugh ranked 49th, the only coach to appear in his top 50 list. Harbaugh certainly turned around the Stanford football program.

Whether it's Beane or Epstein or Harbaugh, of course it's not just their influence but the staff they bring in that matters, too. But that's one thing about bringing in someone like that: their ability to hire great people or bring past teammates with them is one of the keys to their value. Epstein brought in Jed Hoyer and Jason McLeod and countless other people whose names aren't public but who've given the Cubs, in a few short years, the best farm system in baseball. The mantra with the Cubs has always been "wait til next year" but now it feels more like “can't wait til next year.”

The longer I'm a sports fan, the more I think the most important thing if you're loyal to a sports team is quality ownership. In some sports, more football and basketball than baseball, a good manager or coach matters, too. Baseball being a series of individual confrontations, the tactical value of a good manager is less there than that of a coach in basketball or football.

The hypothetical question of how Billy Beane would have done with the Red Sox is an interesting one. On the one hand, as Morris notes, Beane has done a ton with less in Oakland. On the other hand is the well-known phenomenon called the resource curse.

The resource curse, also known as the paradox of plenty, refers to the paradox that countries and regions with an abundance of natural resources, specifically point-source non-renewable resources like minerals and fuels, tend to have less economic growth and worse development outcomes than countries with fewer natural resources. This is hypothesized to happen for many different reasons, including a decline in the competitiveness of other economic sectors (caused by appreciation of the real exchange rate as resource revenues enter an economy, a phenomenon known as Dutch disease), volatility of revenues from the natural resource sector due to exposure to global commodity market swings, government mismanagement of resources, or weak, ineffectual, unstable or corrupt institutions (possibly due to the easily diverted actual or anticipated revenue stream from extractive activities).

 

Sports has its own version of the resource curse, and even Epstein, who delivered the Red Sox their first World Series in ages, ran into it late in his tenure there, signing a ton of expensive free agents like Carl Crawford. Beane would have had a much larger payroll in Boston, and that might have had him chasing more big name free agents rather than searching for inefficiencies as he has had to with the A's.

Or so the theory goes. Readers here know I'm wary of extrapolating phenomenon across boundaries, of the temptation of metaphor, and taking the resource curse, which is often used to discuss countries with rich oil supplies, and applying it to wealthier teams in baseball draws my immediate suspicion.

What's happening in baseball is that teams are smarter about locking up players for their prime years. In baseball, players become eligible for arbitration after three years of MLB service, and they become free agents after 6 years of service in the major leagues. However, teams can sign players to contracts that lock the player up for their first few years of free agency, as well, and more and more teams are doing so for their star homegrown players to secure more of their highest productivity years. This means rich teams like the Yankees can swoop in and buy with a fat contract are older and further into their career. Older players are more likely to be on the downside of the careers or to suffer injuries. Thus what appears to be a resource curse in baseball, as noted in the ESPN article I linked to above, may just be a temporary phenomenon.

An assessment of the Paleo Diet

Nothing too new for people already familiar with the Paleo or other low-carb diets and their supposed benefits, but this survey of the low-carb diet trend is a good 10,000 foot flyover.

In the midst of all the claims and counterclaims, there is a single clear piece of common ground. Experts of every stripe ask dieters to avoid refined sugars and grains. ‘Losing body weight on a plant-based diet is much less likely to occur if the diet includes too many refined carbohydrates,’ writes Cornell’s T. Colin Campbell in his book, The China Study , based in part on his Cornell-Oxford-China study research. Esselstyn instructs his dieters to consume only whole-grain products and avoid fruit juice. And McDougall urges his readers to eat complex carbohydrates instead of refined sugars and flours.

In essence, these scientists and doctors are recommending an Atkins diet that replaces the meat and fat with plants and certain complex (but never refined) carbohydrates.

...

It’s also safe to say that carbohydrates as we eat them today are indeed ‘unnatural’ for us. Even though our Paleolithic ancestors almost certainly enjoyed occasional treats of honey, they weren’t having Entenmann’s crumb coffee cake for breakfast; the technology to refine grains just wasn't available then. It’s likely that our bodies are not well-suited for such a regimen, either.

So Paleo dieters might be right – we could be more evolutionarily in tune with a diet like that of our ancestors, which almost certainly includes fewer refined carbs. We can’t say, based on today’s evidence, that carbs are the root cause of all our chronic ailments, but scientific evidence suggests that we might stay healthier if we take flour and added sugar off our plates. Still, human nature is a moving target. Cookie by cookie, we might be forging humanity into new evolutionary territory, re‑shaping our genes to handle our new dietary indulgences. Along the way, we will undoubtedly ease our problems with new medicines, technologies and lifestyle adaptations – the supine lifestyle depicted in the 2008 film WALL-E comes to mind. But we will undoubtedly have a smoother road ahead if we change our dietary ways, instead of letting our dietary ways change us.
 

Less sugar, less refined carbs, sure. But I don't think our paleolithic ancestors had wine or beer, either, and that's a problem for me. After a long day persistence hunting a saber-toothed tiger or wooly mammoth or whatever it was they were chasing, I think my ancient brethren would've appreciated a glass of the good stuff.

Life of a condom

When MetroCard meets GameStop PowerUp Card Jordi Hirschfeld, he looks at me and says, No wonder Jordi Hirschfeld not yet use you. I become confused. Use me for what?

That night, MetroCard tells me many strange things about myself. At first, I do not believe what he says. But he insists all is true. When I start to panic, he laughs. He says, What did you think you were for? I am too embarrassed to admit truth, which is that I thought I was balloon.
 

Simon Rich, son of Frank Rich, is one of my favorite humorists. I wrote here about his great four-part comedic story “Sell Out” a while ago (you can start with Part One), and another of his comic masterpieces “Guy Walks Into Bar” has been atop The New Yorker's Most Popular list for much of the time since they opened their archives for the summer.

The excerpt above is from his short “Unprotected: Life of a condom.” It reminds me of this Google commercial.

The state of the romantic comedy

Richard Brody, perhaps the most interesting film critic working now (ironically he is relegated almost entirely to the online blog or Talk About Town sections of The New Yorker while colleagues David Denby and Anthony Lane split the weekly movie reviews), discusses romantic comedies with an aside on the new movie Sex Tape.

The modern romantic comedy is stretched on the rack of a dichotomy, one that I wrote about here a few years ago: the possibility of a polar disconnect between love and desire, between a meeting of the minds and a connection of the bodies. The classic romance, whether comic or tragic, is built on desire igniting a conflict that has to be resolved for a relationship to grow; modern romance is based on the premise of emotional and intellectual compatibility, the effort to kindle the sparks of love from friendship.
 

From the article linked in that excerpt:

In our time, the problem isn’t finding a reason to act on attraction (though Eric Rohmer has given us plenty of reasons not to), it’s whether there’s a point to having a relationship afterwards—it isn’t getting together but staying together. We’re forthright enough about desire to distinguish it from the many other things that life is made of; it’s necessary but not sufficient. The twist of “Knocked Up” is that desire quickly yields to practicalities; the terrible pathos of “Funny People” is that fierce mutual desire turns out not to be enough. The title of “The Royal Tenenbaums” could be (with apologies to Hal Hartley) “Surviving Desire.” What makes modern romance complicated is that our expectations are surprisingly high—they take in desire and four-syllable words, a meeting of the minds as well as an erotic charge. And the wisdom of our modern-day romantics, whether Judd Apatow or Wes Anderson or Noah Baumbach or James Gray or Peyton Reed, is not Hitchcock’s but Joe E. Brown’s (rather, Billy Wilder and I. A. L. Diamond’s): “Well, nobody’s perfect.”
 

The increased expectations for marriage is a topic I've covered here before:

Our expectations of our spouses have been lifted to new heights, and it's only natural that the romantic comedy would start to reflect that.

Incidentally, Grantland spent all of last week on romantic comedies, and a related piece of note is Wesley Morris' essay Knocked Out: Have romantic comedies become obsolete?

The downside of telecommuting

Robin Hanson on why telecommuting hasn't become more prevalent:

The standard proximate cause, described in the quote above, is that workers and their bosses get a lot of detailed emotional info via frequent in-person meetings. Such detailed emotional info can help to build stronger feelings of mutual trust and affiliation. But the key question is, why are firms willing to pay so much for that? How does it help firm productivity enough to pay for its huge costs?

My guess: frequent detailed emotional info helps political coalitions, even if not firms. Being able to read detailed loyalty signals is central to maintaining political coalitions. The strongest coalitions take over firms and push policies that help them resist their rivals. If a firm part adopted local policies that weakened the abilities of locals to play politics, that part would be taken over by coalitions from other parts of the firm, who would then push for policies that help them. A lack of telecommuting is only one of a long list of examples of inefficient firm policies than can be reasonably be attributed to coalition politics.