Two weeks ago, I wrote a post entitled, “No, We Should Not Pay Jim Harbaugh More Money.” Not surprisingly, this generated a lively, and mostly fruitful, discussion that included a number of War and Peace-length comments. I want to take this opportunity to highlight some of the points from the comments and also offer a few more rebuttals.
But first, two important items of business:
1. Congratulations to the football team–they’re going to the Orange Bowl in Miami to take on my cousin’s beloved Virginia Tech Hokies.
2. Athletic Director Bob Bowlsby has already offered to “sweeten” Jim Harbaugh’s contract to try and convince him to stay.
Now, back to business. One popular argument in favor of raising Harbaugh’s salary is that it he brings in more money for the school (or, more accurately, the Athletic department, since both his salary and the resulting benefits are essentially self-contained within Athletics). As Tkim writes:
Football has the chance to fund every other program in the athletic department (if Josh, you would actually come to the games). The ROI on the investment is much higher with Harbaugh.
This is true, but using this as reasoning creates a problem. If what matters is the amount of money brought in, there are a number of other obvious ways we can increase this quantity. The first is obvious: we can stop holding our student-athletes to high academic standards. Every year, our athletics program turns away thousands of talented athletes because of insufficient academics. Accepting these athletes would undoubtedly make our football program better and therefore more lucrative, but does that mean we should do it?
My guess is that most, if not all, Stanford supporters would be against lowering academic standards because considerations outside of football are important. Harbaugh himself has been vocal about the importance of putting the student in student-athlete. At other schools, football players are students in name only (see: Heisman-trophy winner Cam Newton of Auburn). But that’s not adequate reason to say that we should allow that.
To say that we should pay Harbaugh more simply because he brings in more money for the athletics department, then, only holds if we believe we should take any action to bring in money for the athletics department. Lowering academic standards would make it easier to bring in more money, but we are not in favor of lowering standards (I think we can all agree that we would rather have Andrew Luck than Cam Newton, regardless of what the Heisman voters think). Therefore, arguing in favor of raising Harbaugh’s salary based on “ROI” is, in my mind, unconvincing.
This discussion leads into the next major repeated argument: economic efficiency. Most commenters agreed I was naive and knew nothing about economics, because economics would solve all of our issues.
Stanford Alum in NYC:
Econ101 — the free market determines value.
Class of ’96:
Relative levels of pay are not a reflection of Stanford’s priorities, but of the market and his talent.
The problem here is twofold: first, market definition matters; and second, economic efficiency could, and probably should, include matters of deontological importance.
Setting aside the important and highly inaccurate assumption that free markets work by themselves, I find it hard to believe that Stanford’s football program is in the same “market” as other big-name football programs. Stanford is not offering the same product as other schools: we are offering students who play football an opportunity to be a student that plays football. We are not, as every other BCS team seems to be (including high-quality academic institutions like Cal and Michigan), a football team for football players with an attached school for everyone else. This distinction carries an enormous amount of value. To assume that the market value for a Stanford coach is the same as that of other schools is to disregard the difference between Stanford and any school that acts like a professional football team.
This value also impacts the salary of a coach. A coach who cares about the student part of the student-athlete (as Harbaugh has claimed and partially shown by not leaving already to go to a more lucrative program on multiple occasions), will incorporate this value into his valuation of a job. To be the coach at Stanford is to be the coach of a football team at a school, not just the coach of a football team. Therefore, the market value is, and should be, different than either NFL salaries or football programs that act like NFL teams. We should compare our coaches’ salaries to those of peer institutions competing at the same level of academics and sports; for football, the closest comparison looks to be Northwestern, which has very high academic standards for football players. Northwestern’s coach makes $750,000–or $500,000 less than Jim Harbaugh currently makes. This comparison is not perfect since there are other factors differentiating Northwestern and Stanford, but it is the closest comparison and can therefore be seen as a general placeholder of where real “market value” lies in this case.
A second consideration is the misconception that “non-economic” principles–such as ethics, fairness, establishing priorities, doing what is right, etc.–are naive, fanciful, and anti-economics. You could argue that demanding the importance of these factors solely on the basis that they exist goes against economics, and you might be right (though I would disagree with you that they are therefore not important). But that does not mean that these factors are not worth consideration even from an economic point of view: “practical” (to borrow a word from commenter Eric) economic thinking is that which tries to maximize welfare given constraints, which include individual’s and society’s valuation of deontological principles. To write off any other consideration besides pure monetary efficiency is far more naive–it fails to take into consideration all aspects of the argument at hand. This includes what makes Stanford a unique and laudable football program in the first place: an insistence on strong academic standards and a school-first mentality.
Separately, I want to clarify a point from my original post. I take issue with Alvin Rabushka’s idea that we need to pay millions of dollars for a football coach because “Stanford University clings to the principle of excellence” in all areas of the school, academic or otherwise. I countered with the example that there are an extraordinary number of programs, departments, and activities that are underfunded. Commenters were quick to point out to me that the money for Harbaugh is not zero-sum: Athletics operates on a separate budget from the rest of the school, and therefore an increase in his salary would not take away funding from other places. This is true; what I meant to illustrate with the underfunding example was not that paying Harbaugh would take away from other aspects of the school but rather that the idea that Stanford tries to be the best in every field is a delusion. Even if Harbaugh’s salary is not directly tied to any other part of campus except Athletics, there are still many, many parts of the school that are underfunded and given lackluster attention–and therefore an argument based on a principle of excellence in all fields is based on a questionable assumption. I also would argue that it would behoove the school to concentrate its attention on those undervalued areas, but since that is not directly relevant to the discussion of Harbaugh I’ll shelve it for the time being.
Stanford should not be a football school. It should be an educational institution with a football team. This is, and should be, reflected in the salary of the football coach. To pay him a multi-million dollar salary is to go against these principles (and does not make much sense), conclusions that can be derived from either an economic or non-economic perspective. Harbaugh has thus far been a proponent of this value structure; if he decides he cares more about money or fame–both of which can be very alluring–he is free to go, and Stanford will try to find a different coach more aligned with these principles. If he stays, we’ll be glad to have him (he’s a great coach, after all) at a salary that reflects the following sentiment from Derek Bok: “The quality of football is not the primary objective of the institution.”