A natural experiment in styles of capitalism: Professional sports

Abstract

This study compares two professional sports-baseball and basketball. In organization professional baseball comes closer to a US style individualistic capitalism system, with relatively free competition for players and a relatively weak commissioner. Professional basketball, on the other hand, comes much closer to a Japanese style communitarian capitalism system, with limited amounts that clubs can spend on players and with a strong commissioner. While the basketball system protects the economics of small market clubs better, as might be expected, it does not protect their winning records better. Surprisingly, the small market clubs win more in the individualistic system of baseball.