The Everyday Economist

Our friend J.C. Bradbury writes:

The Yankees have ten days beyond the World Series to sign Alex Rodriguez to an extension, so there is a decent chance that this will get settled very soon. (I think that the Yankees and A-Rod will part ways, but I will not be surprised if he stays.) So, I thought it would be a good time to go ahead and make a prediction as to what he will get. And I invite you to do so as well in the comments.

I’ve run a few numbers based on his performance over the past few seasons, his expected aging decline, and the anticipated rise in revenues over the course of the contract.

My prediction: 7 years, $244 million; approximately $34.8 million/year.

You can submit your prediction in the comments on his site for a chance to win a copy of his excellent book, The Baseball Economist.

Although I never attended George Mason, my opinions have been strongly influenced by members of their economics department. Arnold Kling has written an excellent essay to generalize the type of economic thinking that is prevalent at George Mason. Here is a sample:

Dani Rodrik, an economist at Harvard, where we gets used without a second thought, thinks that Masonomics overstates the case for free trade. He argues that we cannot prove that everyone in a country benefits from free trade. This is true. In fact, it is theoretically possible for more people to be hurt by trade than benefit from it. Therefore, Rodrik implies, it is conceivable that we should have tariffs, or, at the very least, we need to compensate those who are “hurt” by free trade.

Masonomics says to lose the we. Instead, like John Lennon, let us imagine that there are no countries. John and Mary are trading, and they are both better off, but an economist calculates that Sam would be better off if John and Mary were prevented from trading. What entity has the moral authority to stop John and Mary from trading?

Governments lay claim to legal authority to collect taxes or impose restrictions on trade across borders. But there is no moral significance to a border. If John, Mary, and Sam all lived within the same country, the question of whether free trade is good for “us” would never arise. John’s right to trade with Mary without interference on behalf of Sam would not be questioned. It is hard to see how moving Mary across a border changes the situation from a moral or economic standpoint.

Read the whole thing.