Moneyball: The Art of Winning an Unfair Game
By Michael Lewis (W. W. Norton, 288 pp., $24.95)
Michael Lewis's new book is a sensation. It treats a topic that would seem to interest only sports fans: how Billy Beane, the charismatic general manager of the Oakland Athletics, turned his baseball team around using, of all things, statistics. What next--an inspirational tale about superior database management? But there are some broader lessons in Lewis's book that make it worth the attention also of people who do not know the difference between a slider and a screwball. Those lessons have to do, above all, with the limits of human rationality and the efficiency of labor markets. If Lewis is right about the blunders and the confusions of those who run baseball teams, then his tale has a lot to tell us about blunders and confusions in many other domains.
Lewis focuses on the extraordinary success of Beane, who has produced a terrific baseball team despite one of the lower payrolls in baseball. Since 1999, when Beane took over, the Athletics have compiled an amazing record. Consider a few numbers. In 1999, the Athletics ranked eleventh (out of fourteen teams) in the American League in payroll and fifth in wins. In 2000, the Athletics ranked twelfth in payroll and second in wins, a feat that they duplicated in 2001. In 2002, they ranked twelfth in payroll again--and first in wins.
How did Beane pull this off? He did it largely by ignoring or defying baseball's conventional wisdom, otherwise known in baseball lingo as The Book. (As in, "The Book says that you should bunt in this situation.") It turns out that many chapters of The Book are simply wrong. Sacrifice bunts are rarely a good strategy, and steals are vastly overrated. (Unless a base stealer succeeds at least three-quarters of the time, his running efforts reduce runs scored rather than increase them.) The portion of The Book that was most in need of revision, and the most important edge that Beane was able to exploit, was in player evaluation. Here he tried to figure out, scientifically, how much a player was likely to contribute to his team's chances. He relied on objective evidence, explicitly ignoring anything that could be dismissed as "subjective."
Beane found that, as a statistical regularity, players drafted out of high school are much less likely to succeed than players drafted out of college. And so he drafted no high school players, regardless of how highly they were touted. He hired a young assistant named Paul DePodesta, a Harvard economics graduate, who relied on his computer to project players' performances, without so much as ever seeing a player swing a bat. Much of the tension, and the comedy, of Lewis's book comes from the conflict between Beane's and DePodesta's statistical methods of evaluation and the well established strategies of experts who have scouted, played, and breathed baseball for decades. The verdict? Statistical methods outperform experts. It's not even close.
As Lewis tells the tale, Beane's particular approach has intensely personal foundations. Beane himself was a top high school prospect, one of the most sought-after in the nation. He was fast, he was tall, he was strong, he could hit the ball a mile. The baseball scouts loved him. As one of them admitted, "I never looked at a single statistic of Billy's. It couldn't have crossed my mind.... He had it all." According to another, "The boy had a body you could dream on. Ramrod-straight and lean but not so lean you couldn't imagine him filling out. And that face!" Beane was selected in the first round of the draft, with the highest of expectations. He was destined to be a star.
There was just one problem: Beane did not play baseball very well. He thought too much. He was too emotional. His failures notwithstanding, baseball people saw his body, and his face, and his raw talent, and concluded that he was bound to succeed. "Teammates would look at Billy and see the future of the New York Mets. Scouts would look at him and see what they had always seen.... The body. The Good Face." He certainly had talent, and once in a while he would do something truly sensational. But after several years in major league baseball, his performance was woefully bad. With only 301 at-bats, he hit .219; more embarrassingly, he had 80 strikeouts and only 11 walks. Abruptly, he quit the game. While playing for Oakland, he told the team's general manager that he no longer wanted to be a player, and would prefer the job of advance scout, an employee who travels ahead of the team to analyze future opponents. The team's general manager was stunned: "Nobody does that. Nobody says, I quit as a player. I want to be an advance scout."
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