Moneyball and Whiteyball and Market Inefficiencies

Few pleasures, in my mind, compare to the joy of reading a well written book. Although I was not overly impressed by the movie rendition of Moneyball, the book and its explanation of the acquisition of undervalued assets by the Oakland Athletics delighted me. It probably also helped that the 2001 and 2002 seasons are not prominent in my baseball memory (2001 was my first year of college, and in 2002 I was out of the country), and when I read the book in 2006 I was coming back from my baseball hiatus following another strong Oakland team while living in Minnesota. Watching the 2006 ALCS in the Metrodome and having Mark Kotsay’s inside the park homerun silence the crowd is one of my favorite baseball memories.

Reading Michael Lewis’s book, you get the sense that Beane and company had discovered something new, that in some way they had figured out how to game the system by identifying market inefficiencies and focusing on on-base percentage. To my surprise, however, I recently found this passage in Why Time Begins on Opening Day written by Thomas Boswell in 1984. Writing about the rise of the St. Louis Cardinals in the early 1980s, he speaks about how Whitey Herzog built his winning teams as an anathema to Earl Weaver’s “pitching, fundamentals, and three-run homers,” or what in that age most closely resembled sabermetrics. Herzog’s teams, instead, were built around speed (on offense and on defense) and relief pitching. Why Whiteyball? Well, it was this quote from the book that caught my attention:

“To Herzog it’s axiomatic that the contemporary Ace of Staff lives in the bullpen. Herzog starts with speedsters and relievers; then, as a kind of apologetic after-thought, he looks to see if any stray sluggers or starting pitchers–you know, the category of players who monopolize the Hall of Fame—happen to be left lying about. To Herzog, the most overabundant commodity in baseball is a respectable starting pitcher who can give you a few presentable innings. John Stuper, Dave LaPoint, Steve Mura—sure, dime a dozen. Win it all with ‘em. Now perhaps we can see why Herzog could build his team so quickly. He could get the guys he wanted because nobody else thought much of them. He sought precisely the baseball commodities that were most undervalued” (p. 73).

Just like Moneyball, Whiteyball identified undervalued assets and acquired them cheaply to create a championship team. What stands out in my mind, however, is that Boswell does not say that Herzog went looking for undervalued assets. Rather, Herzog’s managerial preferences for a competitive team matched exactly what the baseball market currently undervalued at that time. It’s this key point that I think Lewis’s book misses or is not clear about. Was Moneyball a conscientious decision to target undervalued assets or was it just pure chance that Beane and DePodesta’s desire for players who could not play defense and got on-base at high rates was the undervalued asset at the time?

As the market for baseball assets changes, I also have to wonder, in this age of information, will there ever be a market inefficiency that will last long enough to allow a club to build a coherent team on the field. In following the A’s attempts to rebuild in the last 5 years or so, they have moved from one inefficiency (defense: with the acquisitions of Coco Crisp, Kevin Kouzmanoff, and Ryan Sweeney) to another (raw latino talent: Michael Ynoa and Yoenis Cespedes) to another (relief pitchers: Grant Balfour, Michael Wuertz, and Brian Fuentes). It seems to me that in only targeting inefficiencies, it becomes much more difficult to build a coherent team. Whereas Herzog’s transactions targeted inefficiencies, they were also part of a larger strategic purpose:

“He had little trouble trading for the heart of his new team—Lonnie Smith, Ozzie Smith, Willie McGee, and Bruce Sutter. These and other personnel moves, like signing free agent Darrell Porter, weren’t uniformly brilliant, but they all had the thread of Herzog’s guiding purpose. Each trade was greater than the sum of its parts, because each new Card complemented the others” (p. 73-74).

This is cross-posted at Baseball-Bob.