The Deipnosophist

Where the science of investing becomes an art of living

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Location: Summerlin, Nevada, United States

A private investor for 20+ years, I manage private portfolios and write about investing. You can read my market musings on three different sites: 1) The Deipnosophist, dedicated to teaching the market's processes and mechanics; 2) Investment Poetry, a subscription site dedicated to real time investment recommendations; and 3) Seeking Alpha, a combination of the other two sites with a mix of reprints from this site and all-original content. See you here, there, or the other site!

17 July 2009

Playbooks and Checkbooks - a review

With ~275,000 books published last year (~20,000+ books / month), you would think a few duds would slip through the cracks. Add the topic of economics, refined by the inclusion of sport, and you can rest assured the book to be a real snoozer.

Surprisingly, author Stefan Szymanski's new book, Playbooks and Checkbooks, An Introduction to the Economics of Modern Sports, is not a snoozer but a sleeper; equal parts eminently readable and wholly fascinating.

In medieval Europe, sport meant either hunting or jousting -- a private affair for the privileged. The state offered little in the way of public entertainment and severely restricted the ability of individuals to congregate. Public assembly without the permission of the ruler or the state could mean only one thing: rebellion...

Less august clubs soon flourished in the developing coffeehouse societies of London, where traders and lawyers might meet to do business, and journalists might meet to discuss the latest tittle-tattle. Journalism itself was a consequence of the withdrawal of the state, the abolition of censorship in 1695 creating an essentially free press. Freedom of the press went hand in hand with formation of clubs, since people needed to know where to find like-minded individuals with whom they could associate. In the early years of the eighteenth century, there was an astonishing explosion of clubs in England and Scotland, catering to every kind of pursuit, from science to the arts, to innocent pleasures such as music and the study of history, to serious moral reform and religious revival, and more profanely, to eating, drinking, and most of the remaining deadly sins. None of the activities were new, but their organization within the framework of a club certainly was. Thus clubs also emerged for the pursuit of pastimes such as horseracing, cricket, and golf... sporting clubs were established as much for the opportunity to mix socially with like-minded people as to play the game itself -- a function that golf, probably more than any other sport, fulfills even today.

In English law, clubs and associations have no particular status. Anyone can form a club, for any legal purpose, without needing to obey any special rules... The absence of any legal status reflects the independence of such organizations from the control of the state. The fact that English law never interfered in the formation of associations by private citizens indicates how much freedom was left to individual initiative. By the end of the eighteenth century visitors to England became quite bored with the tendency of the English to proclaim their liberties and to declare that other nations lived in servitude. Contemporary Germans and Frenchmen often found this national pride quite puzzling, because they did not see what the English were free to do that they were not. But freedom of association did mean something. It was certainly not permitted elsewhere in Europe...

And with that last quotation, you have the first glimmerings of what elevates this book above others -- the economics of sport (and, I dare add, all economics) does not rise from a vacuum, but is of a piece with the prevailing social, spiritual, financial, and moral zeitgeist. Szymanski's non-elaborated notion places his book with the best art history, for art also is a creature of its time.

Szymanski does not elaborate the notion directly because it is tangential to his narrative; he does elaborate it indirectly, though, in chapter 4 ("Sports and Incentives"). In that chapter, Szymanski discusses how the leagues, the clubs, and the athletes deal with the issue and phenomenon of doping, and what the fans should do about it.

My favorite chapter, though, is the final one, "Sports and the Public Purse." It is here that Szymanski ties all his seemingly loose threads into one gorgeous tapestry via an all-encompassing dissection of the Olympics Games as (crooked) business. The chapter also reveals Szymanski to have knowledge of the Austrian school of economics, if not a full-fledged member. The reader can almost see Szymanski's sly smiles and hear his quiet chuckles, when he tells of Olympics organizing committees that regale their audiences with the riches to come. Even Schéhérazade did not beguile her audience so completely.

Full Disclosure: Playbooks and Checkbooks is a beguilingly edifying book.
-- David M Gordon / The Deipnosophist


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