It’s The Same Old Story
Published: Sunday, September 22, 2013
Updated: Sunday, September 22, 2013 16:09
Well, we’re back at “Common Cents” after a fun summer of relaxing and looking at the economics of our daily world. Believe it or not, a lot of economic-related things happened that weren’t tied to the Wall Street Journal, and what better way to kick off the year than my favorite topic: sports.
No doubt you’ve heard about the Aaron Hernandez saga from just about every angle. Why would he do it, why would a man who has millions of dollars and the love of his loyal fans do such a thing? We’ve heard the sports radio talk show hosts take their shot at why he would stick to a life of crime, but the economists have stayed silent, well until now. In fact, economically speaking, Hernandez had no choice but to continue to resort to a life of crime. Crazy you say? Well, maybe but I’ll explain my reasoning and hopefully teach you a thing or too at the same time.
The study of economics is a study ultimately based on how we satisfy our unlimited wants with our limited resources. We all want things: finished homework assignments, cars, friends, food, and we use our time, energy, and money to maximize our happiness as much as possible. Economists measure this happiness using an “indifference curve” which basically
tracks what you want and what you can afford so as to maximize your level of happiness.
What the heck does this have to do with Hernandez? Hold on, I’m getting to it! So with an indifference curve you can plot bundles of two goods that will maximize your happiness. For the sake of simplicity let’s label them “x” and “y.” As you can see on the graph there are two curves “one” and “two.” Let’s start with curve one; at every point on that curve I am equally happy, however I would be happier if I could consume a bundle outside the curve. Now, let’s suppose I get a raise in pay, then I can go from curve one to curve two and this makes me super happy. Hot dog!
It is the exact same with Hernandez. Growing up he was accustomed to a certain way of life. He lived in a rough place and that was the only life he ever knew. When he was given a boatload of money he didn’t know how to “change,” but he did know how to live his life, and that was the only way he knew how. Hernandez stuck to a life of crime because, well, he had no choice but to. On my curve, once my income rises I don’t switch to a new bundle of goods, instead I am just able to afford more of what I already like. It’s the same with Hernandez, when that multi-million dollar contract rolled in all Hernandez could do was spend more on what he liked, which in his case included some illicit things.
So Hernandez’s problems aren’t just a matter of sports or sociology, it’s a great study in economics and a very interesting perspective on the dilemma facing many athletes.