Thinking Like a Modern Economist
“An Evaluation by the Moneyball Hypothesis”is an economic article that was written by Jahn Hakes and Raymond Sauer in 1996. The article details how an inventive manager exploited the inefficiencies in the base labor market for many years. The article further details how standard econometric procedures were applied in order to manipulate data on player productivity so as to benefit managers from 1999 to 2004. The methods prove the authors arguments that some baseball skills were valued incompetently from 1999 to 2001. The inefficiency was lucratively exploited by managers who had the capacity to create and interpret statistical knowledge. In economic concepts, as the knowledge of ineptitude started spreading across baseball teams, the market corrected the initial pricing spontaneously. The article accounts for how several economics theories were applied to benefit those who knew how to take advantage of them (Hakes & Sauer, 2006).
Based on the readings from the book and the article, it could be said that economics can be applied to the scenario at hand. The article gives an account of how managers conspired to keep players and everyone else in the dark in order to benefit from their ignorance. Economics is an intelligent skepticism that features in all spheres of human life. Economics is a tricky subject, tricky in the sense that it sometimes goes against the cherished norms of the society. It does this in a manner that is difficult to change, because vast evidence lies in the hands of economists. For instance, economics can reckon that the sum of accounting identities must add up. The capital or current account of the balance of payment must be equivalent to zero. This means that net importers of foreign capital will have deficits. Such a scenario will make it difficult for a country to have cheap imported goods and provide with job opportunities poor countries at the same time. A situation like that would not make sense to a protectionist (Krugman & Wells, 2009).
That was the case in the article “An Evaluation by the Moneyball Hypothesis”. It was not easy for players and other interested parties to find a loophole that was exploited by managers lucratively. The article tells us exactly how the real world works. Everyone, from commercial banks to insurance or any entrepreneur, exploits some inefficiency in the market to make profit. It is often difficult for the society to discern the loopholes that businesses exploit profitably. The world is structured in such a way that some people benefit from the ignorance of others. People must learn to think like economists in order to stop business from exploitation. The world seems to have realized that businesses take advantage of them. This has been demonstrated by the current Occupy demonstrations. These are calls of the public demanding economic reforms to put an end to the economics of exploitation. People have finally understood that businesses have been using them in their interests, and they want to stop this trend. Currently, the world has risen against the economics of exploitation. The society has begun thinking like modern economists. People demand economic reforms so that they can also benefit from their efforts, since as it is now only a handful of the population benefits from the rest of the population (Krugman & Wells, 2009).
Jahn Hakes and Raymond Sauer argue that human beings are amenable to the scientific method and not cultural aspects; economics is the pillar of every society. We find the authors conclusions valid, since this trend is unique not only to economists but to the society at large. The article covered many aspects of economics in the society. The article also dealt with numerous aspects of how business sports contrast with other businesses. There is a correlation in the manner in which business sports operate and how businesses shape the society. The economics trends that have been highlighted in this article are not different. The situations like the one given as an example in the article - of how sports managers colluded to exploit the inefficiencies in the industry- are very popular. A similar philosophy exists in businesses worldwide. From commercial banks to shopping stores, businesses increasingly exploit loopholes in the system in order to earn lucrative gains. However, it is not easy to believe the evidence that the author might have taken from the table. This is because such findings may be interpreted differently. It is not advisable for one to draw conclusions just by looking at some table or figures. The evidence that may be adduced in this case may not be standard to enable one draw meaningful conclusions.
We believe that economists must carefully study these issues so as to understand underlying issues in this area of economics. Science and economics go hand in hand; economists must study the issue of business of exploitation to understand the circumstances surrounding the issue. There are also other factors that affect these issues. The question of whether people marry for economic or social reasons also falls under this issue. This article has changed my outlook on the society in relation to economics. To my mind, economists believe that working through the mathematics that isolate the society is the preferred way of gaining insights. There is a natural link between the society’s mentality and the economics of exploitation. In most societies, businesses have devised multiple methods of exploiting the population, but no one seems to be bothered by this. Moreover, economists apply their theories to justify that their practice is legal (Hakes & Sauer, 2006).
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