This is the thread I will link to whenever someone makes the nonsensical comparison of the "economy" of a zero-sum sports league selling the entertainment product of competition vs that of a *non* zero-sum real economy and invoke descriptors like “capitalist” and “socialist.” 1/9

This thread is inspired by the most recent infraction: A June 2020 NYT video essay about the NBA called “Is It Basketball … or Socialism?” https://www.nytimes.com/2020/06/29/opinion/income-inequality-nba-socialism.html

Here's why such comparisons are silly: Sports leagues are zero-sum. For every win, there is a loss. (Or for every tie, another tie.) In an 82-game NBA season, the collective regular season record of the 30 teams will always be precisely 1230-1230.

For the NBA, (which is an entertainment product that exists in a real economy), the product *IS* competition. It thus makes business sense for this competition to be fairly even. Nobody wants to watch LeBron James against the Boise YMCA (or at least not regularly).

In the NBA, it is in the financial self-interest of the Los Angeles Lakers for the remaining 29 teams to provide a decent level of competition. The quality of this competition product is what keeps fans interested and buying tickets, TV subscriptions, and merchandise.

Some naive commentators would call these self-imposed league rules "socialist," but the reality is that they are simply business protocols implemented by a firm operating in a capitalist economy to improve its product (which is competition between teams).

Now compare the NBA to other firms in a real economy. Google and Amazon aren’t selling consumers “competition” between the two firms—they have other products and services they sell. Nobody invites folks over for a big watch party of the market cap lead of Apple vs. Microsoft.

In most sectors of the economy, it’s not in the self-interest of a given firm for a competitor to be strong enough to provide a good level of competition. It is not zero-sum. There can be more than one "winner." We can grow the economic pie. But there's always one NBA trophy.

In conclusion: It makes no sense for zero-sum sports leagues, which are an entertainment product, to be seriously compared to national economies. But that doesn't prevent a long history (and sadly probably future) of such bad takes. (9/9)

Addendum: One very wrong claim in that NYT video is that in the NBA, "poor teams can make competitive salary offers to top players.” Nope. The individual max salary means teams can’t compete on price for stars, so those stars just team up to make superteams in big marquee cities.