Capitalization Rates (how efficiently any group makes use of its talent) and the NBA (Malcolm Gladwell/Bill Simmons)
GLADWELL
What we're talking about is what are called capitalization rates, which refers to how efficiently any group makes use of its talent. So, for example, sub-Saharan Africa is radically undercapitalized when it comes to, say, physics: There are a large number of people who live there who have the ability to be physicists but never get the chance to develop that talent. Canada, by contrast, is highly capitalized when it comes to hockey players: If you can play hockey in Canada, trust me, we will find you. One of my favorite psychologists, James Flynn, has looked at capitalization rates in the U.S. for various occupations: For example, what percentage of American men who are intellectually capable of holding the top tier of managerial/professional jobs actually end up getting a job like that. The number is surprisingly low, like 60 percent or so. That suggests we have a lot of room for improvement.
What you're saying with the NBA is that over the past decade, it has become more and more highly capitalized: There isn't more talent than before, but there is -- for a variety of reasons -- a more efficient use of talent. But I suspect that in sports, as in the rest of society, there's still an awful lot of room for improvement.
Case in point: Everyone always says what an incredible advantage it has been for Peyton Manning to have had the same offensive coordinator and the same offensive system his entire career. Football offenses are so complex now that they take years to master properly, and having one system in place from the beginning has allowed Manning to capitalize on every inch of his talent. On the other hand, someone like Jason Campbell has had a different offensive coordinator in virtually every season of his pro and college career (and I'm guessing he'll get another this offseason). I'm not convinced that it's possible to say, with certainty, that Campbell has less ability than Manning. I'm only sure we can say that Campbell has not been in a situation that has allowed him to exploit his talent the way Manning has. We just don't know how good he is capable of being -- and we may never know.
SIMMONS
I like the capitalization concept. The best NBA example: From 1990 to 1996, the league's lack of a rookie salary cap combined with skyrocketing salaries led to absolute chaos. Younger stars were earning too much money too soon and had too much control of their own destiny; not just who coached them but where they played and who played with them. And the league removed any incentive they would have had to improve by making them filthy rich immediately. Nearly all of them handled it poorly: C-Webb, Coleman, Anderson, Marbury, Big Dog, LJ, Kemp, Baker … that's a lost generation, to some degree.
Flipping it around, Kobe is the best overcapitalization example other than Malone (who came along in the right era and had the perfect teammate and coach for his game). Kobe works harder off the court than anyone in the league; we have so many ways for him to improve in 2009 that he's like a kid in a candy store. We've all heard the story about how he worked out with Hakeem all summer to refine his post game, so here's one you might not have heard: When I visited Nike last month, we toured the development building (in which they customize sneakers for specific athletes), and the guy who ran it told us that Kobe was their favorite client. Why? Because he kept pushing them and pushing them to make the right shoes for him, even flying there for days at a time just to put himself through grueling workouts with sensors all over his body. This past summer, he pushed them to create a special low-top sneaker that also would prevent him from rolling his ankles -- which seems incongruous on paper -- yet they feel as if they pulled it off. And only because he kept pushing them. Forty years ago? He's wearing crummy Chuck Taylors like everyone else.