Capitalism, Not Morality, Ended Baseball’s Color Line

By Michael Munger

In the early days of baseball, in the 19th century, the sport was colorblind and open to players of all backgrounds. True, the bigotry of individual players (and fans!) was a problem. Still, as late as 1884 Moses Fleetwood Walker and his brother Weldy played professional baseball for the Toledo Blue Stockings. But protests by bigots, including one of baseball’s most famous players, Cap Anson, first baseman and manager for the Chicago White Stockings, led to concerns that players would strike, or fans would become violent, and games would be disrupted.

The problem was that the best black players were much better than the worst white players, and were in many cases better than the best white players in some clubs. The desire to win, and the fact that black players were willing to accept salaries that white players would reject, meant that competition forced the bigots to pay too high a cost, either in lost pay for forfeited games or lost bonuses because when all-white teams did play they would lose to more talented mixed teams.

The solution, as is always the case, was institutionalized racism, or the use of force to oblige even non-bigots to act as if they were bigots. A “gentleman’s agreement” was struck, beginning with the end of the 1884 season. It was not written down, but it was clear: no team in the National or American League could sign a black player. On July 14, 1887, the issue was settled by two events. Anson managed to force George Stovey, a black pitcher, to be benched in a game between the White Stockings and the Newark Little Giants. And the owners of the International League, the “high minors” of baseball, the feeders for major league talent, voted six to four to ban any new, and to invalidate existing, contracts with black players.

Notice the collective element: the owners could have remained bigots, simply exercising their own racial prejudices and not signing black players. Instead, bigots managed to impose the general policy; it was not enough that I won’t sign black players, because the policy will only work if no one is allowed to sign black players. Racism forces everyone to act as if they were prejudiced.

This policy, implicit but binding, stayed firmly in place for 60 years, ending in 1946 with the signing of Jackie Robinson to a minor league contract. Robinson moved up to the major league club, the Brooklyn Dodgers, at the start of the 1947 season.

The hero of this story, in many accounts, was the Dodger general manager, Branch Rickey. But serious scholars have expressed skepticism about this kind of “magic white man-savior” story, and I think they are right. Rickey was a notorious miser, skinflint, and squeezer of contracts, as well as a near-genius judge of talent. Rickey had at least four reasons to break the color line: black players (1) were athletically talented, (2) were underpriced, and (3) were likely to attract thousands of new fans to the Brooklyn ballpark, which was quite close to several heavily African American neighborhoods.

It is also true that (4) Rickey had long resented the bigotry of fellow owners and the racism of the gentleman’s agreement. This sense of the injustice of racism dated (at least) from his time in college at Ohio Wesleyan University, when he had witnessed the systematic racial bigotry of hotels and other teams against black players. I don’t want to deny Rickey credit for (4), but the market forces —  (1), (2), and (3) — are the real story: Rickey was too greedy to leave easy profits on the table.

Remember, until 1946 the gentleman's agreement had enforced a universal "color line," even in the minor leagues. But baseball requires many skills that have to be developed over years of practice; there had to be some source of black players completely outside the system, or even greed wouldn’t have been enough. There was just such a pool of talent, however, because of the development, particularly beginning around 1930, of highly profitable — for some teams at least, including the Birmingham Black Barons, the Pittsburgh Crawfords, and Kansas City Monarchs — parallel Negro leagues. These players had enough talent that they played a highly organized schedule of games before often-crowded stadiums. The salaries of some black stars reached as high as $8,000 per year, with additional bonuses and expenses paid under the table, by 1946. That amounts to more than $100,000 in 2018 dollars, far less than modern ballplayer salaries but still a sizeable sum, enough to attract the talent and effort of young athletes.

Rickey’s Dodgers were perennial also-rans, both in New York (where they trailed the Yankees and Giants in attendance) and in the National League (where they always trailed the St. Louis Cardinals in performance). Ironically, perhaps, the strength of the Cardinals was due in part to its innovative “farm system,” with organized scouting in tiny communities all over the Midwest. Rickey himself had developed this power system when he worked for the Cardinals (1919-42), and he now had to try to compete against it.

Rickey was frustrated by his inability to sign quality players — at least at the price he was willing to pay — and by his inability to win pennants. Further, he was convinced that the flagging attendance at Brooklyn's Ebbets Field could rebound if he could sell tickets to African American fans. Further, the skills of the black players, using almost any measure of offense or defense, were consistently higher than those of white players for the same level of salary. Remember, all that is really necessary is that the best black players be better than the worst white players, given the difference in salary. If competition were to be allowed, and if black athletes were allowed a level playing field, racism would have to yield to the cold facts of wins and losses.

All these factors — low attendance, losing seasons, small budgets, and the availability of a huge pool of cheap, high-quality ballplayers in the Negro leagues — led Rickey to sign Jackie Robinson. Rickey is often portrayed as a king or saint, a magic white man who did Jackie Robinson a favor and sacrificed his own reputation for the benefit of African Americans. But this was a flinty-eyed, green-eyeshade decision and nothing more: Jackie Robinson was signed for a paltry $600 per month even though his skills, defensive prowess, and offensive production quickly established him as one of the premier players in baseball. By 1955, Robinson was the highest-paid Dodger, making more than $35,000 per year, but even that was the result of his market power and not any charity on the part of Brooklyn's management.

Other owners (the “gentlemen” in the misnamed gentlemen’s agreement) were infuriated, of course. But that can only be explained by their recognition that the competitive advantage of opening the league to all players based solely on talent would prevent them from indulging their bigoted preferences. The most bigoted teams, or rather their owners and management, by this measure were from New York, Washington, Philadelphia, and (notoriously) Boston. Boston’s ownership actually held out until 1959, and gave up only when it became clear that without organized artificial racism the price of bigotry was just too high.

To be fair, the end of the formal color line did not end systematic racism in major league baseball. There is strong evidence that black players either were underpaid or were not hired at all for at least 10 years following Jackie Robinson’s emergence on the field. Consider the difference between average players, by race, for the period, comparing the means of batting averages for white and black players and showing the difference in those means.

This table must be interpreted as a measure of the disequilibrium, in standard microeconomic terms, caused by residual bigotry. If there is no racism, meaning that market forces can operate to eliminate the performance differences between races, given that race has no impact on baseball outcomes, there should be no difference in mean performance. At the margin, owners and managers will hire players based on productivity.

Replacing the worst white players with the best black players ought, at the margin, to raise the batting statistics of both groups. But the process was only partly carried out, meaning that some managerial or owner taste for discrimination (or perhaps a fan taste for discrimination, not wanting “too many” blacks on a team, or player opposition, refusing to play with “too many” black teammates) was still preventing full equilibrium, which would imply that there was no difference at the margin.

One could object that the results shown in the table are the result of selection, but that’s the point: at the margin, hiring the best black players not on the roster was far more productive, in terms of cost per unit output, than retaining the least productive whites already on the roster. Note that I am not claiming that black athletes, on average, are in any way naturally superior at running, leaping, or any of the other attributes in bigoted stereotypes. The point is that if the two pools are identical overall, one should expect teams facing competition and caring only about winning to continue adding better black players and firing inferior white players, at the margin, until the mean difference disappears.

I shouldn’t be too optimistic or claim too much. Capitalism and market competition are partial solutions, at best, to problems of racism because all markets can do is make bigotry more expensive. The Boston Red Sox had averaged a winning percentage of nearly 61.0 percent during the late 1940s, a remarkable performance, with only white players. In the period when baseball desegregation became general, 1951-59, the Red Sox played at a level just over 51.5 percent, a nearly average performance.

Even in the period following management’s surrender to competitive necessity, their reluctance to fully integrate the team held them back, with performances of 45.0 percent or less for much of the 1960s. Only in 1967, with seven black players on the roster, did the Red Sox return to prominence. The “Impossible Dream” team started three black players (Foy, Scott, and Smith) out of eight position players.

Perhaps I shouldn’t make too much of the analogy to sports, but there is an obvious parallel with markets in the sense that there is a clear metric to judge performance. Baseball teams are judged on wins and losses, and firms in the marketplace are “judged” by profits and losses. Since performance is objective, there is far more pressure on participants to put aside their prejudices and personal preferences.

This leveling of privilege, in which everyone is judged by their merits, is often lauded as being an advantage of sporting competition. We don’t always recognize that markets have the same leveling function, the same corrosion of artificial privilege. The evangelical-Christian author Nancy Pearcey noted that this principle is actually general, regardless of whether we are considering religious movements, sports, or markets.

She said, “Competition is always a good thing. It forces us to do our best. A monopoly renders people complacent and satisfied with mediocrity.”

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Michael Munger

Michael Munger is Professor of Economics at Duke University and Senior Fellow of the American Institute for Economic Research. His degrees are from Davidson College, Washingon University in St. Louis, and Washington University.