The discovery process in student athlete wages

FiveThirtyEightSports has a great piece about how much college quarterbacks are really worth in terms of market value. I’m neutral-but-leaning-against on the issue of paying college athletes, but the piece begins with University of Iowa Athletic Director Gary Barta giving a very bad reason to oppose it: it’s too complicated to figure out how much they should be paid. He’s right given how he’s conceiving the issue, he’s just not conceiving the issue in the right way.

Wages are not determined by a person or group of people independently evaluating what a job is “really” worth. That’s what markets do, i.e. that’s what innumerable decisions over time by innumerable anonymous consumers operating within the price system do. The failure to understand how the price system works in allocating resources by preferences is not unique to Barta. Very few people understand it, and lamentably even people who do understand it often forget what they know when they think about how it applies to wages. I don’t mean to pick on Barta. Within the bounds of how people ordinarily think about prices and wages he’s right. It would be unfair to expect him to be an expert in economic topics on top of being an athletic director. In fact, not even all the economists in the world put together can really tell you what a particular position is worth. Nobody can. It’s a discovery process. It takes trial-and-error in endless iterations to find out what the social value of a job is, and it’s always changing.

FiveThirtyEight does an admirable job attempting to estimate the added value of particular quarterbacks in their prime seasons. But let’s not get too comfortable. This kind of estimate is only the first pass. I assume if universities had to pay student athletes they would start with something like this, as they clearly have to start somewhere. But the feedback they get from the bottom line would lead to adjustments at the first opportunity, and these new numbers would also be adjusted ad infinitum with continuing feedback. Would it be perfect? No, probably never. It’s not always easy to parse out the relative contributions of the various members of a team effort, not even with the discovery process. But it would certainly be closer to the mark than any wage-setting entity could come up with.

Also, on a side note, student athlete pay would lead to a change in transfer rules. If a player feels underpaid at one school and sees bigger dollar signs at another—maybe his skills fit in better there or he’s currently a good player warming the bench behind a great player—he would naturally want to transfer. As nobody knows going into college how well players will fit on a team two years later, and as the pay would give them better estimates, I imagine this would lead to a whole lot of players wanting to move around a lot more. At some point this amount of pressure would almost have to lead to a rule change. I’m sure there are other rules that would change as well. This doesn’t mean they shouldn’t institute athlete pay, it just means the issue has a lot of ramifications that they should consider.

I can’t imagine the NCAA would actually institute a pay system that mirrors that of the professional leagues. For one thing, where would this leave the sports that fewer people pay to see? Many less popular programs operate at a loss, and surely they don’t want to charge those student athletes to play them. Simply upping the stipends and benefits the players currently receive still leaves many athletes, especially the stars, getting paid far less than they contribute, which wouldn’t satisfy the critics, and upping them so much that it averages out may be beyond the means of most institutions. (If the standards are not universal, there will be other problems.) But saying that they can’t do it because they don’t know how much they should pay is not the appropriate response. New entrants to established industries have some decent ideas about the starting point by reference to their incumbent competitors. Starting to pay student athletes on the scale of the NCAA, well, they’d just have to find out. No doubt it would be chaotic for the first few years, but it wouldn’t be chaotic forever. If an outsider website like FiveThirtyEight can come up with these numbers, I’m sure that college sports programs that have access to financial information and data on all their players can find a starting point. The rest is out of their hands, as it always will be.


More reasons why some people leave libertarianism

Jeff Tucker has a post on his page about why people leave libertarianism. As with almost all of his writing, it’s worth considering.

Beyond what he said, I think there’s another reason that some people leave libertarianism. For most people getting into it—here I’m speaking from personal experience as a young libertarian and as part of the leadership of my college libertarian group—libertarianism is all about the Non-Aggression Principle. There are so many behaviors, policies, and institutions that one can find looking around the world that a) are obviously destructive and b) violate the NAP that it seems like its power as a guideline will never run out. At some point, especially once the young libertarian gets a real job, goes to graduate school, or simply starts thinking about things that young people never think about, one starts finding complicated situations that aren’t obviously one way or the other with regard to the NAP, or that pass the test but still seem problematic. You’d be hard-pressed to find a self-described libertarian seriously engaged in the field of law & economics, for example, who thinks that the NAP is a sufficient guideline. And what about the impact of broader social trends in technology or interpersonal relationships, any small instance of which may seem good but the accumulation of which might lead to undesirable consequences? A person who seriously worried about this possibility would find himself adrift within popular libertarianism, and may very well stop considering himself part of it even if he still supports all the other policies it recommends. In my own experience, many of the people who leave libertarianism “leave” but don’t go far.

I like being a student of social science for just this reason. When the going gets too tough for the NAP to provide a comprehensive set of answers, there is social science. Economics, in particular, has a whole range of answers that have nothing to do with the NAP. Why is private property good? Without any reference to Locke, Nozick, or self-ownership, private property is the most efficient way yet discovered of minimizing disputes and maximizing prosperity in a modern, impersonal economy. Why is government interference in most things bad? Without any reference to Rothbard, government action is subject to a host of knowledge and incentive problems that typically result in less efficient use of resources, leading to subpar social outcomes. You can take the NAP or leave it and still come up with a libertarian worldview.

I think it may come down to differing opinions on a simpler subject. How capable is society of allowing emergent orders to flourish that efficiently and robustly address universal human problems? If one takes the view that the possibilities are dim, various flavors of non-libertarian thought are the result depending on what parts of society need the most guidance from on high. If one takes the view that the possibilities are good, one ends up in the libertarian camp. Getting theoretical and empirical guidance about where on the spectrum we should fall is what social science is for; if you want to advance libertarianism, advance social science. There’s the possibility that advancing social science would hamper libertarianism, but we should be looking for the truth anyway and in my experience so far libertarianism comes out looking better and better the deeper you dig.

Other people who leave libertarianism, then, are people who agree on many things but at some point reach an issue where they think substantial government direction is needed, which leads them to change their minds on some of the earlier points too. To use an unrealistically bad example, one may come to think that such widespread marijuana use as exists today really is so socially destructive that it needs to be banned by government action, at the very least to prevent its increase. With this conclusion he may go back and revisit his support for privacy from government eyes in the face of this threat. Here’s where we can make real contributions to libertarian thinking. Is that issue really so dire? Are there other ways to address it? Will the solution be restricted to the narrow problem it’s intended to address without creating a lot of collateral damage? We don’t know the answers in advance, but if people are worried about them they’re worth finding out.

I know that some publications have lately taken to beating up straw man versions of libertarianism, and one of the common themes I see is that people “grow out of” libertarianism. This is all backwards from my view. The more I learn about how complex human civilization is, I think the odds of successful central management of it become exponentially harder to pull off. No expert or group of experts, no matter how smart and motivated they may be, has any substantive understanding of how most of society works. I grant that a lot of things could be better. How policies to make them better can be imposed from the top down is a separate question, one that has far fewer reasonable answers.

I’m not any kind of expert in psychology, so there’s surely more to say on this issue. Speaking only speak from personal experience and observation, this is my 2¢ contribution.

The JFK Assassination, pt. 13: Buell Frazier’s denial

I’m currently watching the documentary The Day Kennedy Died (ably narrated by Kevin Spacey). Buell Frazier was Lee Oswald’s co-worker at the Texas School Book Depository and gave him a ride to work on the morning Kennedy was assassinated. He is one of the people interviewed for the documentary. At one point, Frazier says that chief interrogator Captain Will Fritz interrogated him angrily and even presented him with a typed statement implicating himself as an accomplice in the assassination. Of course, he refused, and after threatening him again Fritz left the room and that was the last Frazier saw of him.

Buell Frazier has frequently been interviewed on the subject and has never been considered as a suspect since that point. This seems to make Fritz’s confidence that he had the right man (in Oswald) quite a bit less credible, even for people who believe that Oswald was the lone gunman.

The woman who made Mason econ what it is

Here is a 1983 video of Friedrich Hayek that I came across somewhere on the internet lately:

Friedrich Hayek’s genius is so broad and deep—and his accent so thick, and his English so interwar-academic—that the video may be hard to watch in one sitting. That’s fine. Here I want to point out something else: the woman who introduces him.

Her name is Karen Vaughn. I had the pleasure of hearing her as a guest lecturer for four classes in Pete Boettke’s History of Economic Thought class. Among her many impressive accomplishments, she was the chair of the economics department at George Mason University from 1982–1989. In this capacity she brought James M. Buchanan’s Center for the Study of Public Choice to George Mason University in 1983 after its difficulties at Virginia Tech. She had previously initiated a deal to locate the Center for the Study of Market Processes, later to be renamed the Mercatus Center, to GMU in 1980. (Some of the story here and some here.)

Basically, GMU’s economics department at the time was nothing special. Its overall rankings have been slowly but steadily getting better, but in its areas of specialty it is near or at the top. I did not field in Experimental Economics and don’t know much history there, but I did field in Austrian Economics and Public Choice, the specialties represented by those very organizations, and the opportunity to study both in the same program from their leading scholars is due to Karen Vaughn. In short, it was Vaughn who made Mason Mason. We often think of the battle of ideas as being only about the ideas, but it’s things like this that work behind the scenes as well.

Her work may be a little inside baseball for most people, but for its target audience it is eminently worth reading. The anecdotes in class were great too. Her guest spots were in preparation for her to resume teaching at least a few classes on the history of economic thought, so I hope this project is well underway. She has of course continued writing, so I hope this too is bearing fruit.

Update: I wrote this last night, and today I see that the QJAE has another chapter in the history of Austrian economics here. You’ll notice it features, among others, Karen Vaughn.

On the annexation of Texas

Here’s a passage from Ray Allen Billington’s The Far Western Frontier: 1830–1860:

American support for annexation [of Texas] cannot be simply explained. To state that the South favored and the North opposed is to rely on a generality that does little justice to the complexity of human motivation. That a majority of Southerners wanted Texas is incontestably clear; that they wanted to increase the slave territory within the United States does not necessarily follow. Those who expressed themselves were more concerned with fear of England than with the expansion of slavery, while a sizable segment opposed adding Texas to the Union. Some among these felt that Texans would enjoy a “bright destiny” if they could remain free of meddling northern abolitionists and high-tariff advocates; others sought to avoid the sectional conflicts that loomed if more slave states were acquired, or disliked taking on new lands that would drain population westward. Similarly, a significant portion of Northerners violated the sectional pattern to favor annexation. These included speculators who had invested in Texan securities or lands and stood to gain fortunes when the United States assumed the obligations of the poorly managed Republic. Jay Cooke, a leading financier, believed that the “selfish exertion in their own interests” of this small but powerful group was responsible for the passage of the joint resolution. Other Northerners welcomed Texas as a new area for commercial exploitation, or because the spirit of manifest destiny so dictated, or as a means of glorifying the national honor. Whatever the reasons, the American people had decided. The new spirit of expansionism had borne its first fruit.

Slavery was one issue, but it was far from the only issue; powerful financial interests exerting a disproportionately large influence is not only a modern problem. Belief in the superiority of “Anglo-Saxon” ways was obviously a part of the national conversation at the time, but this alone is not sufficient (or even necessary) to explain enthusiasm for expansion.

As Robin Hanson might say, nuance is near, caricature is far.

R.J. Rummel, R.I.P.

I recently learned through J.D. Tuccille’s post at the Reason blog that R.J. Rummel died back in March. Rummel was the foremost scholar on the topic of democide, the murder of people by the government that allegedly represents them. His website was full of disconcerting but important numbers, numbers that no scholar of the 20th century can afford to be ignorant of.

His death of is interest not only to me as a social scientist and libertarian. Back in 2004 when Catallarchy’s Jonathan Wilde first brought us the idea of using May 1 as a memorial day for the victims of communist regimes, part of why we thought this was important was R.J. Rummel’s research. Bad government is not just about stifling economic growth or stunting the development of culture. Bad government, at its worst, is about murder, murder on a scale so staggering it’s impossible really to wrap one’s head around. According to Rummel, 174,000,000 people were killed by their own governments in the 20th century. After the first couple of successful May Day events, we at Catallarchy were very proud to have landed a guest post from the man himself for our third event. I never met him personally, but his research was important for my own development as a social scientist.

Mises on religious (and other) differences:

The pompous statements which people make about things unknowable and beyond the power of the human mind, their cosmologies, world views, religions, mysticisms, metaphysics, and conceptual phantasies differ widely from one another. But the practical essence of their ideologies, i.e., their teachings dealing with the ends to be aimed at in earthly life and with the means for the attainment of these ends, show much uniformity. There are, to be sure, differences and antagonisms both with regard to ends and means. Yet the differences with regard to ends are not irreconcilable; they do not hinder cooperation and amicable arrangements in the sphere of social action. As far as they concern means and ways only, they are of a purely technical character and as such open to examination by rational methods. When in the heat of party conflicts one of the factions declares: “Here we cannot go on in our negotiations with you because we are faced with a question touching upon our world view; on this point we must be adamant and must cling rigidly to our principles whatever may result,” one need only scrutinize matters more carefully to realize that such declarations describe the antagonism as more pointed than it really is. In fact, for all parties committed to pursuit of the people’s welfare and thus approving social cooperation, questions of social organization and the conduct of social action are not problems of ultimate principles and of world views, but ideological issues. They are technical problems with regard to which some arrangement is always possible. No party would wittingly prefer social disintegration, anarchy, and a return to primitive barbarism to a solution which must be bought at the price of the sacrifice of some ideological points.

– Ludwig von Mises, Human Action, p. 180

Insofar as religion is about the individual person or soul, true, they can’t all be right together, but insofar as religion is a social force dealing with life on earth, it’s not a barrier to social cooperation in and of itself.

10th Anniversary of Catallarchy’s May Day: A Day of Remembrance + the early days of blogging

A decade ago we were in the middle of the “Wild West” period of blogging. Lay people could and did write serious, insightful, and interesting content alongside professors, think tank employees, and other experts. There was a lot of noise, but reblogging and links helped create a network of good blogs you could visit without ever having to trudge through the low-quality stuff. We at Catallarchy, which eventually broadened into the Distributed Republic, were enjoying every minute of it. Eventually people moved on to new jobs and new levels of education, had kids, ran out of steam, and all those other kinds of ordinary things, and today’s blogosphere is mainly done by people who get paid to think and write. I’m not complaining; it was probably inevitable. But the early period was a lot of fun while it lasted.

I mention this because today is the 10th anniversary of the first of Catallarchy’s May Day: A Day of Remembrance series. The idea was to point out the failures and atrocities of communist regimes (on the day they had co-opted from the early, far less centrally-controlled workers’ movement) to make sure the romantic notions of days gone by were properly tempered by reality.

It was a huge success, and we continued it for several years until we, too, shuttered the blog and moved on to other stages in life. It was so much of a success, in fact, that we no longer get the credit for starting it. I’m not complaining about that either. (Obviously, some credit would be nice, especially for Jonathan Wilde who first brought the concept up to the rest of us at Catallarchy and to others in the blogosphere, but it’s more important to get the ideas out.) But it does make me reminisce back to the Wild West blogging era, when a bunch of ordinary people could throw ideas out there and have them resonate.