The best defense of economics is a paper about the NFL
In 2005, two economists told NFL teams they were paying too much for top draft picks; within a decade, the league's collective bargaining agreement proved them right.
Last week, representatives from every NFL team and the league joined the country’s top prospects in Pittsburgh for the annual NFL draft, where teams made their picks from among eligible young players. Every time this season rolls around, I am proud of economics, my field of study.
The connection may not be obvious. Let me explain.
Economists “in the wilderness”
My feelings about economics aren’t widely shared these days. In fact, the public often misunderstands economists and tunes them out, in my view, to its detriment. Last year, in The New York Times, Ben Casselman described economists as being “in the wilderness” politically, their influence diminished in both Republican and Democratic administrations. Back in 2021, Ezra Klein put it even more bluntly: “Biden has less trust in economists, and so does everyone else.”
In a recent interview with economist Richard Thaler, commentator Jon Stewart characterized the profession as if its job were “to make the most amount of money for your shareholders,” to the exclusion of other goals such as general welfare. “Economics doesn’t take into account what’s best for society!” he claimed, provoking a written response from The Argument’s Editor-in-Chief Jerusalem Demsas.
Needless to say, I would not characterize the field that way.
Economics gives you a framework for thinking about trade-offs and incentives: how people, firms, and governments respond when the costs and benefits of their choices change. Demsas offered a number of examples to that effect in her response to Stewart.
But Stewart’s view — roughly, the idea that economics is primarily an ideological construct for benefiting particular classes of people — is fairly commonly held, and those who value economics should be prepared to rebut the allegation.
Thaler, a Nobel laureate, is widely respected by economic practitioners. But it’s important for a field to be able to demonstrate its value to those outside of it. We should be able to answer “How do we know you’re not an ideology or cult or pseudoscience?”
Fortunately, the career of Thaler himself provides that answer. Alongside my former professor Cade Massey, he wrote a wonderful paper titled “The Loser’s Curse: Decision Making and Market Efficiency in the National Football League Draft.”
In it, the authors showed that economists can offer genuinely useful insights in places where ideology barely fits — where the goal is straightforward, the constraints are hard, and the competition is ferocious.
Here’s what economics looks like in the NFL.
When economists looked at the NFL draft
On NFL draft weekends, like the one that just took place in Pittsburgh, teams select young players to join their team using draft picks. And they trade those draft picks like currency.
By the early 2000s, NFL front offices had converged on a widely used “price list” for picks: “the chart,” an invention out of the Dallas Cowboys front office. The chart assigns point values to each draft pick; earlier picks are worth more points, and later picks are worth fewer. The points are used to quantify the expected talent distribution across the draft.
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