Private ethics and public capitalism

Rob posted about an interesting interview in The Athletic with Gil Meche, the former Kansas City Royals’ pitcher who walked away from the last year of a five-year $60 million contract in 2011. Because the NYT has pulled off the extremely annoying stunt of having a separate subscription to its sports section from the rest of the publication, I didn’t have access to the full interview initially, but now that I’ve read the whole thing I have some thoughts.

A lot of LGM readers understandably took the view that walking away from another twelve million dollars when you’re 32 years old is, all things being equal, an admirable thing to do in this decadent and depraved society, in which money is now essentially God. I certainly agree with that in the abstract. But living here in the material world, one doesn’t have to be a material girl to perceive some potential complications.

Gil Meche understood his decision to walk away from that twelve million dollars within a frame in which an employee who isn’t performing as well as he is expected to perform by himself and his employer, and nevertheless continues to expect the contract he signed to be honored by the employer, is therefore doing something that’s in some way morally dubious and even reprehensible. He thought that way about his decision because he, like everyone else in this society, has had that message hammered home to him over and over again by the people who profit, quite literally, from that belief,

Some quotes from the piece:

“Gil’s exact words to me were: ‘You signed me as a starter and I can’t fulfill that obligation. I’m not going to take that money as a relief pitcher,’” [KC GM Dayton] Moore said.

“Realizing I wasn’t helping the team much, it started to just build on my conscience.”

“January came around in 2011, and I just didn’t have it in me to start wanting to throw again. Even if I would have had a decent year out of the bullpen, the amount of money just didn’t seem right.”

“No. I know it got a lot of publicity and all that stuff, but to me, I didn’t want it to be looked at like that. It was just the right decision at the right time for me and my family. And I also wanted to pay respect to the Royals and to Dayton, all those guys that believed in me.”

“But looking back at the amount of money it was, trust me, now that my kids are in college and wanting to graduate and get jobs, there are many times I think: “OK, if they start making $200,000 a year and have extremely good jobs, that’s going to take them a while to make $12 million. …”

[Not sure if this is meant literally or sarcastically].

“Dayton was an amazing person, not just for a front-office person but as a guy to go to and chat with. So he wanted to make sure that what I was doing was right for me and my family.

But it was obviously a shock. He just couldn’t quite comprehend what I was doing. He was like: “Gil, that’s a lot of money.” I said: “Dayton, I understand that, dude. I really do. But you gave me an opportunity to pitch in Kansas City, and I did the best I could until I started getting hurt. In a way, this is my respect back to the organization — and to myself. Because I had to live with knowing I was making all that money.”

Again, I admire Meche for walking away from playing baseball for seven more months in exchange for twelve million dollars, in the sense that he decided that, after getting paid $51 million to play baseball by age 32, he didn’t need yet even more money to buy another beach house and another boat and an even bigger house, because he would rather get off the hedonic treadmill, not that he would put it like that. That is certainly all very counter-cultural in a good way. (There’s a passage in which Meche talks about the satisfaction he gets from spending several hours on a tractor just mowing the grass on a 42-acre parcel that he owns that reminds me of a passage in Anna Karenina, in which Levin spends all day harvesting wheat with his serfs until he’s completely exhausted, and feels some sort of deep spiritual fulfillment from this, at least for a day).

But there are aspects of this story that are not so great. I don’t expect Meche to think about any of this stuff in more sociological and structural terms, because he was a Cajun kid who had spent his entire life focused on becoming and then being a major league baseball pitcher, which is something that requires fantastic levels of single-minded concentration and devotion.

But as for the rest of us here at LGM, we might step back for a moment and ask — which literally no one in that thread, or in The Athletic story itself for that matter, ever did — what exactly happened to that twelve million dollars that Meche decided he didn’t need enough to play baseball for another seven months in 2011? Did it just disappear into the ether? Did it go to Money Heaven?

It didn’t of course. Where it went is straight into the pocket of the team’s owner, David Glass.

David Glass was hired by Sam Walton in the early days of Wal-Mart (1976) into the company’s C-suite, and by 1988 he had become the booming company’s CEO. His friend Ewing Kauffman was the original owner of the Royals’ franchise, and when Kauffman died in 1993 Glass became part of a complicated five-person limited tax partnership, that managed the Royals while Kauffman’s estate searched for a suitable buyer for the franchise. Kauffman’s estate had until 2001 to sell the team under this arrangement, and was having trouble doing so in the late 1990s at the minimum bid price of $75 million. This was in no small part because the major league owners, including Glass himself as a kind of quasi-owner, had created a crisis in the economic structure of the sport, by engaging in rampant illegal collusion, which led to players’ strike in the summer of 1994, that ended up cancelling the rest of the season. That experience had made a bunch of extremely rich people, including Glass himself, gun shy about buying a MLB franchise, given that, horror of horrors, MLB was an industry in which the labor force actually had the power to seriously fuck with the profits of said rich people.

Eventually Glass, who was worth several hundred million dollars that he had “earned” as CEO of the friendly feudal structure that is the WalMart Corporation, and who very much wanted to own a MLB franchise, bit the bullet and paid $96 million to buy the Royals in 2000.

The then proceeded to decimate the Royals as a competitive franchise, by bringing WalMart’s cost-slashing mentality to the operation of his new toy. The Royals were absolutely terrible for more than a decade as a result. The signing of Meche to a big contract in 2007 was among other things a gesture intended to try to appease increasingly outraged fans.

Meanwhile, Glass was making yacht-loads of money. MLB revenues via the exploitation of media rights exploded, the value of MLB franchises skyrocketed in the wake of the arrival of sustained labor peace, and the Royals were possibly the most profitable day to day franchise in the sport during Meche’s years in KC, seeing a net operating income of $73 million between 2009-2013. This is because the team had such a low payroll, because Glass was a cheap son of a bitch, who despite or rather because of his wealth uncountable, was still obsessed with maximizing the bottom line. Indeed in 2011, the year Meche decided to walk away from that $12. million, the Royals had the lowest payroll in baseball, at $36 million, meaning that the $12 million Meche decided not to collect would have represented fully 25% of what Glass was obligated to pay his players. Instead, with operating revenues of $161 million, the team was making Glass yet more incredible amounts of money. Meanwhile, the value of the franchise continued to go through the roof.

Here’s the thing: Gil Meche felt really badly about the fact that at the end of his big contract he was injured and couldn’t perform at the level at which he expected himself to perform. Taking that final $12 million seemed on some level wrong to him, even though he was absolutely entitled to it, contractually speaking, because his labor union had spent decades fighting and sacrificing to protect its members from the rapacity of ruthless bastards like David Glass.

Meanwhile, David Glass was “earning” more than one million dollars per week, in capital appreciation and operating income, every single week for the twenty years that he owned the Royals, before he sold them in 2019 for more than one billion dollars, that is, more than ten times what he paid for them in 2000 (by way of comparison the equity markets only a little more than doubled over this time).

And what did Glass do to earn more than one million dollars per week every week for 20 years: a sum, in other words, roughly 100 times the amount of money that Gil Meche walked away from, and thereby transferred directly into David Glass’s bank account, because Meche felt like he was no longer genuinely earning the salary his employer was obligated to pay him? The answer, comrades, is that David Glass did quite literally nothing, unless you count spending every waking minute thinking about how to screw over his employees work, which I suppose it is.

Again, this isn’t really a criticism of Mcche so much as it is of the society that successfully socialized Meche to fail to perceive that there is almost literally nothing that he could have done with that $12 million that he chose to forego that wouldn’t have been more socially useful than giving it to David Glass.

When the accumulation of wealth is no longer of high social importance, there will be great changes in the code of morals. We shall be able to rid ourselves of many of the pseudo-moral principles which have hag-ridden us for two hundred years, by which we have exalted some of the most distasteful of human qualities into the position of the highest virtues. We shall be able to afford to dare to assess the money-motive at its true value. The love of money as a possession -as distinguished from the love of money as a means to the enjoyments and realities of life -will be recognised forwhat it is, a somewhat disgusting morbidity, one of those semicriminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease. All kinds of social customs and economic practices, affecting the distribution of wealth and of economic rewards and penalties, which we now maintain at all costs, however distasteful and unjust they may be in themselves, because they are tremendously useful in promoting the accumulation of capital, we shall then be free, at last, to discard.

John Maynard Keynes, “Economic Possibilities For Our Grandchildren,” (1930)