Moneyball

According to classical economic theory, mature markets at equilibrium should reach a point of optimum efficiency. After a sufficient time, Adam Smith's invisible hand ought to have slapped the inefficiencies out of any market. Surely, we could be so bold as to presume to apply such reasoning to professional baseball. Baseball is nothing, if not competitive; each side continually seeking out even the most meager of advantages. Do we have little more to learn about the stratagems of baseball? Do the myriad of conventional baseball statistics adequately and accurately quantify the contributions of players?

People have clutched on to various approaches to the game, but since the 1970's Kansas native Bill James has made it a point to apply statistical analysis to assess the effectiveness of common baseball strategies. One of Bill James's first heresies was the discovery that attempting base stealing rarely contributed to run scoring unless it was successful more than 70% of the time. Bill James is the founder of sabermetrics, "the search for objective knowledge about baseball." (The term derives from an abbreviation for the name of the group that followed in James's footsteps, the Society for American Baseball Research.)

James and others who have adopted his philosophy of critically applying statistics to baseball have developed radically different measures of player performance. For example, players have traditionally been evaluated on the basis of batting average, the number of hits divided by the number of at bats. Batting average is the dominant hitting statistic published in daily papers. Runs are the currency of baseball and sabermetricians have found other parameters that are far more correlated to a player's contribution to runs scored. Getting on base, on base percentage, even by drawing a boring walk, is critically important. Indeed, the sum of on-base-percentage and slugging average (OPS)¹ is far more highly correlated to the runs a team scores than is batting average. Hence, in seeking to evaluate baseball talent, in choosing young players to draft and nurture and others to trade for, OPS and other more exotic statistical measures like ``runs created,'' represent better criteria than simple batting average.

However, baseball ownership and management are conservative by temperament and generally grossly uneducated in statistics. James's observations and the work of other sabermetricians were generally viewed as the oddball conclusions of baseball player wannabees, four-eyed, shallow-chested nerds who baseball players used to pick on in grade school. Sabermetricians might conjure up a clever insight now and then, but they really could not contribute to baseball strategy in any meaningful way. However, money has a way of shaking things up and big money shakes thinks up vigorously.

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