Sports and Capitalism

So I’m fat.

Like, fat fat, not fat fat fat.

Since High School, I’ve put on about a hundred pounds.

This is tough for me, because I was always athletic growing up (I played basketball in high school and ran track in college…sigh…now I can’t even run…).

Anyway, so I’ve recently recommitted myself to going to the gym, which has made me think about what a great example of capitalism sports is, and how underutilized this metaphor is for teaching youngsters what capitalism is all about.

For those who are new to my blog, my working definition of capitalism is “the voluntary transformation of raw materials into finished products,” which I think is at least as good as any other definition out there.

So in sports, everyone kind of starts out as these useless lumps of raw material, which, in and of themselves, are not particularly helpful in the given situation.

Being tall is helpful in basketball, but there are tons of examples of tall people who turned out to be terrible at the sport, because a raw material is never as useful as a finished good.

Instead, the raw material of our mortal coil must be transformed, often through hard work, dedication, and study, into something more suitable for the task at hand.

Nobody is born being good at shooting free throws.

Sure, there are some people whose genetics lend themselves to being easier to transform into athletes than others, but there are also some fruits that lend themselves better for making pies than others.  Just as a good chef can make something edible out of something disgusting like a filthy, gross fig, any human can build up his body into good physical condition.

So, there’s the raw material aspect being changed into a finished product.  This is easy for kids to understand.  They can see that the kids who spend the most time playing basketball become the kids who are the most talented at basketball.  They can see that the kids who put in the most work in gym class end up getting the most out of it.

They’re not dumb, you know, they’re just young.  They can put 2 and 2 together.

The next good aspect of capitalism represented in sports is creative destruction.  That is to say, capitalism involves an awful lot of failures before a spectacular success can be achieved (the ballpoint pen is a good example of how many failures a simple idea has to go through before someone gets it right).

Businesses have to open and close.  Ideas have to be created, tested, and either accepted or rejected before the cycle starts again.  This dynamism represents a kind of communal machine learning wherein better ideas replace less efficient ones.

The same is true in sports.  Practice is the heart of any athletic endeavor, and practice is essentially just an organized regimen of failures.  Every time a hitter misses the ball, every time the pitcher misses his spot, every time a shortstop misses the throw is one more failure that teaches and grows a better player.

You don’t have to be a Rich Dad / Poor Dad disciple (or Katy Perry fan) to know that one of the reasons most people never flourish is that they are afraid to fail, and so they never try to succeed.  Sports does a great job showing kids that failure isn’t the end of the story.  There can always be another shot, another pitch, another race.

Finally, sports does a great job showing kids how important cooperation and trust are, which are similarly important foundations for capitalism.

The most fundamental necessity to capitalism is fair laws and the fair application of those laws.  You can read Deirdre McCloskey, or you can just watch youth sports and see how kids react to bad reffing.  They know what’s up.  The rules are supposed to be applied equally to everyone.

But that’s only one side of trust. The other is with your teammates.  Teammates don’t have to be friends or like each other, but they do have to trust that everyone on their team is going to uphold their share of the communal load.

Capitalism requires that lots of people get together to share their raw materials with each other.  Lemonade requires someone with lemons, someone with sugar, someone with water, and someone with time.  More often than not, it’s not all going to be one person with all those things, it’s going to be a few people pooling their resources together to build a finished product (or one person outsourcing his needs to others, which is the same thing).

Trusting your supply chain is the same thing as a quarterback trusting his center.

Perhaps the most important things kids can learn from sports is the glorious order that can be generated out of chaos.  Sure, it’s nice when a play is perfectly executed, but it’s the broken plays that require fast thinking, remarkable skill, or maybe even a little luck that stick in athletes’ minds.

When you’re holding a basketball, there are literally infinite vectors, speeds, and rotation that you can shoot a basketball.  Yet, somehow, even in this field of infinite possibilities, the human spirit manages more often than not to generate the order necessary to complete a pass, make a shot, set a pick, or toss up an alley oop.

In a lot of ways sports is beautiful not because it’s scripted, but because anything can happen on any given Sunday.

Is it any different in capitalism?

 

 

 

 

 

 

 

 

 

 

 

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Crops and Taxes and Incentives

Planting stuff is hard work, especially for an urban gardener like me.  There are dozens and dozens of containers of dirt that my wife and I plant in each year.  There’s mulching, there’s watering (sigh…so much watering), there’s picking and drying and canning and, well, there’s a lot of work in trying to grow food for yourself.

But the upside is that once you’ve put in some work, it gets easier on the margins.  That is to say, if I have 6 tomato plants growing on a trellis and there’s room for one more, it’s pretty easy for me to put a 7th on there.  If I take the time to put in a raised bed one year, I have freed myself, to a great degree, of having to do the same work again.

Gardening is a great thing because the more you do it, the more rewarded you get.  Getting ready to plant your eight pea plants is much more financially rewarding than putting in the effort to plant pea number 1.

In fact, lots and lots of stuff is like this.  Most hobbies fall into this realm.  The better you get at crocheting, the more cost-effective and time-effective your crocheting is; you can create more, with better patters, with more reward for your investment.

Exercise and sports are good examples of this.  Getting in shape takes some steep initial investment, but once you’re in shape, you get to do some pretty impressive things with your body.

Now, it’s important to note that the return you get on these things isn’t infinitely increasing.  When I run out of good sunny area in back yard, it becomes really, really tough to find ways to grow more plants.  It’s pretty easy to get yourself into shape, but getting yourself into Olympic-athlete-shape takes levels of commitment almost nobody would think of (If a fat guy like me spends a year running and walking, I can probably halve my mile-run time.  Olympic Athletes spend a year trying to shave off a second from their time).

And so, when I run out of places easy for me to grow food, I might try to be a little inventive, but I’m not going to break my back going from pea #9 to pea #10 if pea#10 is going to be twice as much work as pea#9.

Similarly, I’m going to be happy putting in 30 to 60 minutes at the gym each night to get in shape, but I’m not going to shoot for Olympic athlete if it means I have to be in the gym 8 hours a day.

The return on investment just isn’t that good in these scenarios at the margins (i.e, once you’ve picked all the low-hanging fruit), and so it becomes really hard to convince oneself to do it.

I mention this as tax day is fast approaching.  This year my wife and I, both professionals, saw ourselves with an awful lot of our taxes in the 25% bracket from our jobs (she’s a manager, I’m a mathematician working in the bowels of the federal bureaucracy).

That’s not why I’m writing this though.

For the last two years, I’ve been teaching math at a local community college.  Now, I’m not the world’s greatest teacher, but I’m competent, and I try to approach teaching math from a “hey I use this every day in a real job, and here’s how you could use this in a real job, too” perspective, which I think serves the students better than “I’m a math teacher and you have to learn this because it’s in the book.”

I think my students generally benefit from having me in the class, and I know the college is happy they have someone competent and reliable in the classroom offering real-life examples of when math is useful.

I make about $1850 this semester, for teaching 16 3-hour classes.  Besides that, I spend about 3 hours the night before prepping for class, and about another 2 hours the night of the class making copies, grading, entering grades, helping students, or whatever.  This means I put in about 8 hours of work each week into the class.

My paycheck is about 230 every two weeks. About 27 comes out in non-tax deductions.  At 25%, I lose another $57.5, and so it ends up being right about 145 dollars that I clear every two weeks.  Or, at 16 hours of work, a little over 9 dollars an hour.

Now, in order to get into the 25% tax bracket, I’ll tell you that my wife and I aren’t working for 9 dollars an hour at our regular job, and me being tired two days a week because of my 9-dollar an hour job isn’t going over so well at my regular, lots-more-than-9-dollar job.

Now, I don’t mind that I don’t make a lot of money as an adjunct professor at a community college (It’s the motto on the business cards they pass out).  What I mind is that 25% of the little I do make gets taken in taxes.

And so, I think, this is going to be my last semester teaching at community college.  The tax disincentives for me working there are so discouraging that it outweighs the happiness I get from teaching.  In a lot of ways, I’d much rather be doing the whole thing for free than for 9 dollars an hour…

So here’s my question: would we intentionally disincentivize a gardener from growing more food?*  Does it benefit the gardener or her community to have less food around?

Does it benefit my community to have one less good-quality math professor around?

And does it ever think about the lost opportunities from the other people just like me realizing that the marginal costs of them working a second job are too high for them to bother doing that second job?

Or does it only think “Boo hoo, another rich guy complaining about his taxes” and never see the class that doesn’t get taught because there’re note enough teachers, or the engineer who has to delay graduation for a year waiting for the class to get run, or the bridge that doesn’t get built because that engineer is a year behind schedule?

Sadly, we both know the answer to that one.

[*Sigh.  Don’t get me started on the gross immorality of food subsidies.  One day God is going to be very angry at us and say something to the effect of “What?  I gave you all this great farmland and you just let it go to waste?  And then you burned some of the food as bad alternatives to the plentiful supplies of fossil fuels I provided you with? Argh! Smite! Smite!”]