Lebron James – Economic Lessons

Lebron has signed with Cleveland for 21 million dollars a year, for two years.  He is an extremely talented basketball player, trains hard, works at his career, plays with elegance and ferocity.  Cleveland obviously believes he is worth more than they are paying _ the capitalist system working in all its beauty.  For all I know he is also highly intelligent, with a winning personality.  Certainly he deserves everything he is getting.  There are basic economic lessons in this story.

Lesson 1 is that commencement speakers lie.  We cannot be anything we want.  The most rewarded are often the most freakish _ with genius intelligence, physical gifts, stamina, or even obscure advantages like a need to sleep only one hour a day.  Not to mention the less discussed differences of luck and birth _ unlike many of his peers, LeBron has fortunately avoided injury.  At under five and a half feet, I could not be Lebron, no matter how much I practiced.  Half the human race is of the wrong sex to be offered his position.

Lesson2 is that there are few equivalent niches in the modern world.  Even if LeBron were 10 years older or injured there would be no equal job into which he could retrain.  The also-rans do not scale gracefully from his high salary to lower ones _ there are probably hundreds of thousands of beneficiaries from professional basketball _ media, airplanes, hotels, construction, ticket takers, advertising, vendors, and so forth.  Find the median income derived from all these and discover inequality of income.  And that has nothing at all to do with how “hard” each of the “losers” is working.  There just are simply few high paying jobs, and most that are very low paying.

Lesson 3 is that “equal opportunity” is a corrosive myth.  The chance to do well is not the same as being groomed or handed wonderful possibilities because of genetic or cultural accidents.  Horatio Alger’s real-life counterparts often starve to death.  Even Ayn Rand’s architect will have fallow periods when no building is going on or he is not part of the current building clique.  This leads to intense hoarding and misery in both good times and bad, for “number one” is always in fragile danger no matter how much he appears to have.  This may be the worst aspect of current academic economic conventional wisdom.

Lesson 4 is that luck is always present.  Time and place matter.  If Lebron had been born fifty years earlier, a basketball career paid nothing at all.  If born two hundred years earlier in the same place, he would likely have been a slave, good for nothing except for an owner to show off, to beat up, and to feed too much for what he was worth.  If born in his ancestor’s native land, he might have been a simple herdsman, hardly distinguished from any of the others of his tribe.  But he has what is needed to meet a current social fad.  Some abilities are always wasted and out of synch with the times _ consider all the frustrated would-be Alexander the Greats or Napoleons.

Lesson 5 is that we need LeBron for social cohesion.  Like any human society, stability requires some bread and circuses.  There is absolutely nothing wrong with escape into the circuses, as long as the bread is not forgotten.  Vast inequality is hardly terrible as long as minimal living standards for everyone are met.  How much should those like LeBron contribute financially to maintain the living standards of the rest of the industrial quasi-slave laborers, a dime a dozen, flipping hamburgers or mowing yards or taking tickets, interchangeable and essentially economically worthless?