Comparative Advantage: Could LeBron James Play in the NFL?
. . . we must never lose sight of this maxim, that products are always bought ultimately with products. It is most for our advantage to employ our productive powers, not in those branches in which foreigners excel us, but in those which we excel in ourselves; and with the product to purchase of others.
—Jean-Baptiste Say, A Treatise on Political Economy
Cleveland Cavaliers forward LeBron James is currently the best basketball player in the world. A nine-time NBA All-Star, four-time league MVP, two-time Olympic gold medalist, and two-time NBA champion, James is the Michael Jordan of his era. Looking back even further, he is the Oscar Robertson or Elgin Baylor of the modern NBA.
At six feet eight inches and 250 pounds, James has the size, coordination, and jumping ability that would make him a successful NFL receiver. Indeed, more than a few professional football players have gone on record as saying that James could play, and perhaps even star, in the NFL right now.1 Tight end is most often mentioned as his ideal position. But if James were to “take his talents” to the NFL, he would violate the economic principle of comparative advantage. James might be able to play in the NFL, but he would do so at the expense of his reign as the world’s best basketball player.
From an earnings standpoint alone, it is a lousy idea. The Patriots’ tight end Rob Gronkowski, one of the best at his position in the NFL, is paid roughly nine million dollars per year for his services.2 James—who some say is underpaid—earns $19 million per year on account of his being the best.3 Of course, a comparison with Gronkowski assumes that James would rank as a top tight end. The twenty-fifth-highest paid tight end is the Detroit Lions’ Brandon Pettigrew, pulling in $1.2 million,4 and many others earn even less.
If James were to split his time between the two sports, his total annual pay would probably decline, even with salaries from two teams. No NBA team will give a big contract to a player putting his body at major risk each NFL season. Moreover, professional football and basketball players generally use the off-season to refresh their tired legs. James’s body would be worn down for each new NBA season even if he emerged from the sixteen-game NFL season uninjured.
The idea of James’s playing in the NFL is even worse when you take into account his outside income. He reportedly earns another forty million dollars per year for product endorsements from Nike, Coca-Cola, Samsung, and McDonald’s.5 He commands these kinds of fees because he’s the world’s best basketball player. He wouldn’t be if he were also playing football.
On the other hand there’s Tony Gonzalez, who retired from the NFL after the 2013 season. A fourteen-time Pro Bowl tight end for the Kansas City Chiefs and Atlanta Falcons, Gonzalez is a nearly certain first-ballot pick for the NFL’s Hall of Fame in 2019.
Gonzalez played college football for the Cal Bears, and he also starred on the basketball team. He could have played in the NBA, where he probably would have been an average player. The salary for the average NBA player, by the way, is not shabby—$5.15 million.6 Assuming a long career in the NBA, even as a backup, Gonzalez would have done well. But he was better at football. His last contract with the Falcons was fourteen million dollars for two years.7
Gonzalez’s salary as a player, like LeBron James’s, is only part of the story. As soon as he retired, CBS signed Gonzalez as a commentator on NFL Today. Being one of the best tight ends ever will pay dividends long after Gonzalez’s playing career has ended.
There have been two-sport stars at the professional level, but they’re the exception. Bo Jackson played running back for the Oakland Raiders and center field for the Kansas City Royals. A hip flexor injury incurred while playing for the Raiders ended his sports career early, however—one of many reasons why James will most likely never attempt to play football.
The most famous athlete to go the two-sport route was Michael Jordan, whose story is the perfect parable about comparative advantage. Jordan might have been the best basketball player of all time. But after having won his third straight NBA title with the Chicago Bulls in 1993, he shocked everyone by retiring. Out of basketball for the 1993–1994 season, Jordan signed with a minor league baseball team, the Birmingham Barons. In 127 games, he batted .202, hit three home runs, struck out 114 times, and committed eleven errors on the field.8
Achieving those pedestrian statistics was not easy. Only a very accomplished athlete could switch careers late in life and hit .202. But in terms of comparative advantage, Jordan’s decision to play baseball was quite the blunder. To play for the Barons, Jordan had to give up his standing as the best basketball player in the world.
Ordinary people also run into the exigencies of comparative advantage. I am lousy with my hands and have never grown so much as a simple plant, so I would perish quickly if I had to construct my own housing or grow my own food. But even if I knew how to do those things, the laws of comparative advantage would still demand that I “outsource” the production of my housing and food to others. That’s because economics is about tradeoffs. If I spent the day farming, it would be at the expense of what I do best, writing and editing. Almost everything we have—from a simple pencil to an ultra high definition television—is the result of cooperation among individuals with complementary talents.
Although one plus one equals two in arithmetic, one person working in accord with his comparative advantage plus another person working in accord with his comparative advantage can equal three or four or a hundred. That’s what happened when Steve Jobs and Steve Wozniak started working together in a garage in the 1970s. Though they probably never uttered the phrase “comparative advantage,” Jobs was the idea guy, while Wozniak was the computer programming wizard.
As Wozniak recounted to Jobs’s biographer, Walter Isaacson, he didn’t know his computer ideas were marketable, let alone how to market them.9 “Woz designed a great machine,” the public relations expert Regis McKenna told Isaacson, “but it would be sitting in hobby shops today were it not for Steve Jobs.”10 Neither of these two geniuses was worth much alone, but the division of labor that defines comparative advantage enabled the duo to build a company that changed the world.11
One of Jobs’s early products after his return to Apple in the late 1990s was the iPod, which along with the iTunes Store transformed how the world consumes music. But as Jobs learned from his work at animator Pixar, “Tech companies don’t understand creativity,” while “music companies are completely clueless about technology.”12 The people at Apple (especially Jobs himself) may have loved music, but they never could have created it. The leading lights of the music business may have loved technology, but as the rise of Napster and other forms of digital piracy revealed, they didn’t understand it. By their collaboration, however, Apple and the music industry forged a new audio era.
Jobs’s charisma was the stuff of legend. No one in Apple’s sales force could sell the company’s products as well as he could. Yet despite the near certainty that Jobs could have sold far more merchandise at their flagship store on Manhattan’s Fifth Avenue than the store’s entire sales force combined, his true comparative advantage lay in conceiving appealing products at Apple’s headquarters in Cupertino, California.
The beauty—and challenge—of comparative advantage is that it requires people to focus on what they are the very best at, even if it means leaving to others work that they could do better themselves. Perhaps LeBron James could have been an excellent tight end, but catching passes in the NFL would have prevented him from being the world’s best basketball player.
Free markets allow people to experiment with various kinds of work till they find their comparative advantage. Free trade lets the same thing happen at the national level. One country, producing something better than other countries can do, can trade its work product for the goods and services it doesn’t have. Our production is our consumption, or, as Jean-Baptiste Say put it, “Products are always bought with products.” Just as LeBron James’s power to consume is maximized by his choice of basketball as a career, our power to consume is greatest when we’re doing what we’re comparatively best at. In the next chapter we’ll explore how the principle of comparative advantage applies to our fellow workers around the world.