A letter-to-the-editor on the Opinion page of today’s Wall Street Journal made such a good general point about the designated hitter rule in American League, I reproduce it here in its entirety. Major League Baseball is not a perfect model of capitalism, but the author correctly identified the key economic principle that is at play here.
[To the editor:]
You correctly identify the designated-hitter rule as the trigger event that has, over time, led to the dominance of the American League. However, I would have expected you to explain the dominance by invoking a key principle of economics: Increasing specialization leads to an overall higher level of performance. In an economy where every family unit has to grow their own food and make their own shelter and clothing, a certain standard of living can be achieved. However, as participants in the economy become more specialized, and these specialists focus on the production of one item alone and cooperatively trade their output for the other items they need, an overall higher level of economic performance and standard of living is achieved.
The DH rule increases specialization in the AL. All the AL pitchers can concentrate entirely on pitching, ignoring the few interleague games. The DHs obviously concentrate solely on hitting. Furthermore, because AL pitchers have to face nine strong hitters each time through the lineup, including a power-hitting DH instead of a weak-hitting pitcher, the pitchers face a higher level of competition, which forces them to become stronger. Overall, the level of competition is higher in the AL, which gives AL teams the advantage when they play the NL. The only way out of this dilemma for the NL is to adopt the DH rule.
Naperville, Ill. (Note 1.)
The slight rule change might have seemed fairly minor in 1973 when the American League adopted it, but notice the nature of that rule. It constitutes a relative freedom that teams of the National League (which chose not to adopt the rule) do not have. The American League teams are not compelled to use a designated hitter, and there are interesting occasions when it has been advantageous not to do so. The important point is that they are at liberty to fill the pitcher’s spot in the lineup with a hitting specialist, and that liberty has been exploited marvelously. As far as I can think of, this single rule is the only difference between the leagues, and the results have been dramatic.
In certain respects, Major League Baseball is a microcosm of a large, complex economy. Efficiency and performance is critical, and statistics play a huge role; there are so many games, the “law of large numbers” applies. Across a 162-game season, it makes a huge difference if one out of the nine lineup positions produces a batting average of .290 with 80 RBI instead of .215 with 6 RBI. Just as companies seek opportunities and funds to expand, American League teams try to fill the designated hitter position with the best hitters they can afford. Good but aging sluggers whose fielding play begins to decline “go to die” in the American League, which is to say, extend their careers by concentrating on hitting alone – and flourishing because of it. This makes the AL teams stronger offensively, which in turn builds the demand for good pitchers, pitchers who do not also have to be good hitters. Thus, the AL builds champions, and just as profitable enterprises attract investment money, the American League teams attract still better hitters and pitchers, continuing the cycle.
Naturally, in a sport there must be rules that set the bounds for purposes of entertainment and recreation, and those rules that are somewhat arbitrary – or perhaps “contrived” is a better word. This is where the analogy of Major League Baseball with capitalism breaks down. The “rules” of capitalism – namely, a respect for and lawful preservation of individual rights applied to polico-economic matters – are not arbitrary or contrived, but rest upon man’s nature as a volitional being. Its purpose is not mere recreation but life itself. Nevertheless, the designated hitter rule still serves as a concrete demonstration of the benefits that come when men are free to act.
1. Designated Hitters Make American League Stronger, Wall Street Journal, 22 Jul 2008, p.A18.