ON "GOODPUT AND "BADPUT"

...Supply-side economics stresses the "market solution," with minimized government intervention (regulation...

...That the NFL owners should have fought the NFLPA so bitterly and been prepared to cancel the season is not surprising...

...In order to improve our measured economic performance, the lights tend to be dimmed over the less obvious costs of production...

...Moreover, debris from the illuminated sections of the street could easily be removed into the dark areas without any apparent negative effects— like dirt swept under the rug...

...But I know that the pleasure pro football and the Browns give me cannot be separated from a deliberate blindness on my part...

...Emphasizing private costs of production at the expense of social costs of production, with resulting illusory victories over inflation and in productivity, is a classic case of legerdemain...

...The effect of this policy is to lower the rate of measured inflation (prices don't have to cover "badputs"), and to raise the level of measured productivity (less of the work force is required to reduce "badputs" and so can be devoted to producing "goodputs...

...The extent of "badputs" consumed is in many respects involuntary —it depends on where one lives, what job choices are available, the type of products one consumes, and on the level of one's income...

...The 28 teams of the NFL do not negotiate separately with the networks but have a joint contract that guarantees them $1.6 billion over the next four years and pays each team (in a true socialism-for-the-rich plan) equal revenues regardless of its quality or fan appeal...

...What I saw instead was what television and huge stadiums conceal, the degree to which every professional football play—each tackle, each block, each run—is dominated by collisions so fierce that 20 and 30 yards away you can hear the thud of flesh against flesh, flesh against hard plastic...

...It was not until I was 13, however, that I got to see the Browns close up...

...Under the NFLPA proposals differences in quality would have been acknowledged not through individual contracts but by a bonus system that would take into consideration everything from how many games a player started to whether his team made the Superbowl...

...And full-cost pricing is less likely to happen under deregulation than under regulation...

...The more comprehensive social costs of production, including the "badputs"which are made more visible by regulation—are suppressed...

...Suppose there were cost-of-living and productivity measures that included the suppressed social cost as well as the more obvious private costs that are incurred...

...The shock was the violence of the game...

...The apparent success in our current measures, brought about by deregulation, may in fact be illusory...

...Unlike Chrysler or International Harvester, the NFL is an industry where profits are on the upsurge...

...Deregulation suppresses "badputs" by making firms less accountable for them...

...or harm may be unequally distributed, as in the case of occupational hazards to which particular workers are exposed...

...Productivity rates also may rise because of deregulation—that is, the measured productivity rate may rise...

...Equally important, players are now eligible for severance pay after two years in the league...

...Certainly, the issues raised in 1982 by the NFL Players' Association's 57-day strike were not naive ones...

...Less weight on steeply rising mortgages means less acknowledged inflation and, not inconsequentially, lower cost-of-living adjustments in wage contracts and other payments tied to the index...

...Turn up the lights...

...Politically, the rise in measured productivity occasioned by supply-side deregulation is very important...

...The results are instead a mixed bag for the players...

...Finally, because of the NFL's immunity from antitrust law, a team has for all practical purposes the power to control a player's service for his entire football career...

...NICOLAUS MILLS the measured rate of inflation and increase measured productivity and, at the same time, result in an increase of the "social cost of living" and a cut in "social productivity...

...Prices may rise less rapidly than if regulations were imposed...

...This sparked the recent controversy over mortgage rates and their weight in the Consumer Price Index...

...both private and social costs would be captured in this measure...

...In that belief I was no different from most of my school friends...

...That is, since the cost of producing "goodput" must be covered by the As a child growing up in Ohio, I thought of the Cleveland Browns as gods...

...The same omission occurs in the measuring of productivity (output per work hour...

...Supply-side measures of productivity focus on "goodput...

...All people, in fact, do not consume the same bundles of "goodputs" and "badputs...

...For example, unemployment data are easier to come by than data on underemployment...

...A parallel bias would occur if one were to look down on a street at night that is illuminated only here and there by periodic, fixed, artificial lights...

...If the weights are adjusted, reflecting changes in consumer spending, the index is altered...

...Our fall Sundays were spent watching the Browns on television or, if someone's father could be persuaded to take us, from the upper deck of Cleveland Stadium...

...Distribution of pay: In this area the NFLPA sought to reverse a situation in which players negotiate their contracts individually and are subjected to a system that results in wide variations in pay...

...I did not stop watching professional football because of that afternoon, and although I live in New York City, I continue to root for the Cleveland Browns...

...Supply-side policies, favoring deregulation, emphasize private market costs, prices, and outputs— the "goodputs...

...Consistent with a lower productivity are higher unit costs...

...they are not apprised of the "social cost of living" and "social productivity...

...Success in effecting "positive" changes in inflation and productivity brings political dividends as long as people are uninformed about more comprehensive ways of measuring—ways that might measure such things as the "social cost of living" and "social productivity...

...The average team plays in stadiums (many of them financed by local taxes) that in contrast to the nation's factories operate at 94 percent of capacity...

...Doing away with effective regulation in such areas as pollution control, occupational health and safety control, and consumer safety could reduce • Sources of revenue: The NFLPA's key demand here was for a linkage between revenues NFL teams pull in and salaries paid out to players...

...It is the associations of childhood that as adults draw most of us to football, and to be reminded of the game's cost—of pensions and bonuses and crippling injuries—is to be deprived of the willed naiveté fanship requires...

...other, perhaps more significant problems are suppressed and hidden in the dark...

...And so, since the firm doesn't pay for them, these very real costs of production don't appear in the price of the product and the measure of inflation...

...What they have formally conceded in the agreement they signed are their most far-reaching proposals: a share of television revenues and a wage-scale arrangement the NFLPA would administer...

...The point is: if a group doesn't consume too many "badputs," it most likely will not push for measuring the cost of living so as to include social costs...

...Actually, the firm's output is comprised of both "goodput" and "badput," the "goodput" being the obvious, productive output—the "badput" being that output's ill effects: pollution, accidents and illness, and so on...

...Such ignorance may generate harm to all, as in the case of unseen atmospheric pollution...

...How so...

...The minimum NFL salary is now $30,000 for a rookie but, most significantly, the minimum increases $10,000 per year to a maximum of $200,000 for a player with 18 years of service...

...An important implication of this analysis is that some (not all) of our recent poor economic performance on the price and productivity front represents progress, not regress...

...Regulations designed to illuminate the "badputs," and to account more fully for the true costs of production, tend to be suppressed...

...Assuming that the regulations are in fact socially desirable, we are nevertheless better off, even though our imperfect current methods of measuring our wellbeing suggest otherwise...

...Deregulation may bring about no effective change in the true cost of living...

...Nor Otto Graham, who had the kindly, worn face of a minister rather than the look of an athlete...

...The "social" costs of production—such as the cost of pollution, accidents, illness, and plant closings— which are not borne by the firm, are not considered in the Consumer Price Index...

...Voters cast their votes in response to published changes in inflation and productivity...

...The focus is on "goodputs," not on "badputs...

...Nor their speed...

...What would have been lost would not be the incentive to excel but the owners' right to reward excellence as they saw fit and to pay (in an effort to keep rival leagues from forming) their highest bonuses to untried rookies...

...A reduction in illumination tends to keep society ignorant of certain problems...

...Our cost of living (and inflation) is measured by an "index"—such as the Consumer Price Index...

...Let's call these two more comprehensive and accurate measures of inflation and productivity the "social cost of living indicator" and the "social productivity indicator...

...In the case of unequal distribution, a remedy is hard to come by, since we must also overcome the problem of ignorance, in addition to persuading the majority to care about the problems of a minority...

...Let's apply some of these ideas to supply-side economics and to its methods of measuring the cost of living and the level of productivity...

...Yet success in raising measured productivity can be politically rewarding even if "social productivity" has declined...

...these costs are passed on to consumers, and thus the rise in inflation...

...Consumers of "goodput" are to some extent subsidized by consumers of "badput...

...I had expected heroics and perfection...

...Above all, there is the matter of television...

...Pollution that destroys lovely vistas is a more obvious target for remedy than pollution that slowly, and less obviously, poisons the environment over time in more disastrous ways...

...THIS CONTROVERSY illustrates an important point...

...The debate over the Consumer Price Index is focused on refining the more obvious data...

...A look at the structure and operation of the 28 football teams of the NFL makes the reasons for the strike clear...

...So with most fans and so, too, with their cool reaction to this fall's National Football League strike...

...Even now, I am still not anxious to acknowledge the realities of the game...

...Thus the incentive to hire an inexperienced rookie and replace a veteran (who after 12 years could receive $140,000 in severance pay) is reduced, and players who are cut by teams leave the league with the financial means to begin new careers...

...In a sport that emphasizes endurance, team play, and the sacrifice of ego, the lessons of the playing field would have been carried to the marketplace with remarkable ingenuity by the original NFLPA proposals...

...For example, if workers, or their families, or the society at large will pay for occupation-related illnesses, the consumers of the products involved are receiving a direct subsidy...

...Professional football's early teams, Chicago, Green Bay, Hammond, Dayton, were funded by companies seeking to reduce worker discontent by fostering team loyalty, and throughout its history the League has constantly opposed serious organizing efforts by its players...

...Their five-year $1.6 billion contract amounts to an estimated 46 percent of the NFL owners' gross—down 10 percent from their first strike demand but an improvement over the owners' counteroffer...

...They centered on nothing less than the question of worker control in an industry whose 1,500 worker athletes, because they are so wellknown, have the power to influence the country far out of proportion to their numbers...

...they ignore most of the "badput...

...Rather, they were the central figures of a glamour industry, who realized that unless they organized themselves with a blue-collar solidarity, they were in danger of having their professional status undermined...

...It was a shock...

...The reduced costs to the firm via deregulation would now count as increased social costs captured in the "social cost of living...

...The link between supply-side economics and the theory of street illumination is clear...

...The fall in productivity is a consequence of labor's and capital's compliance with new regulations...

...The use of more resources through regulation in order to reduce "badputs" can be expected to increase measured inflation and to reduce measured productivity...

...In a given base year, say 1977, the index is set at 100, and subsequent years then are compared and measured in relation to this base year...

...Social productivity," however, takes into account not only the possible rise in "goodputs" stemming from deregulation but also the concomitant rise in "badputs," which have to be subtracted from any increase in the measure of "goodputs...

...There may simply be an internal transfer of costs and prices within the "social cost of living" indicator from private to social...

...That is, the full costs of production are not reflected in the price of production because the firm is not paying the costs of occupationrelated illnesses...

...Because of the distribution and intensity of the light, only certain problems on that street appear to need urgent solution...

...What they have gained, however, is a variation on these original demands...

...THE NFLPA STRIKE DEMANDS were designed to change this situation in two areas: 22 price of the product but the cost of "badput" need not be, the index does not consider the latter...

...The apparent rise in measured productivity may be mirrored in a less significantly rising, constant, or declining "social productivity," depending on whether "badputs" production exceeds "goodputs" production as a result of deregulation...

...It was early August, and my uncle, who was friends with Otto Graham, the Browns' star quarterback, took me to the team's training camp to watch their annual intersquad game...

...Deregulation does increase "goodputs...

...The relative losses and gains from deregulation will depend on the effectiveness of the original regulation in accounting for social costs...

...So the Cost of Living Index prices "goodput"—not "badput...

...The union recognized that at a time when football is being financially transformed by technology (network television and the prospect of cable television), it is essential for players to share in the transformation...

...badputs" are not measured, and so it doesn't matter that they rise too...

...The players' union sought to minimize the gross differences between what a quarterback and a lineman, a star and an average player receive by introducing a wage scale based on seniority...

...This contradiction can occur when incremental benefits of deregulation (savings to society) are outweighed by the incremental costs of deregulation (losses society incurs by forgoing regulation...

...Less government regulation and less taxation will reduce the cost of doing private business—that is, the measured cost...

...Information and data collections, which in part guide our social and economic policies, tend to focus on the most obvious problems of society and on issues for which data can be readily collected...

...Supply-side economics emphasizes the more illuminated areas in our economy—the private costs of production as reflected in supply-side standard measures of inflation and productivity...

...Only if all production costs are fully incorporated into pricing will the subsidy disappear...

...If a firm has no need to use its work force to rectify certain hazards, productivity will be higher than otherwise...

...And data on occupational accidents are easier to find than those on occupational illness, where time may elapse between exposure to conditions that lead to the illness and its manifestation...

...The index represents the weighted average price of a representative cross section or bundle of consumer goods—such weighting being necessary because 21 consumers tend to spend more income on some goods than on others...

...Not the size of the players...

...Otherwise they are in danger of losing their bargaining power, of conceding control over the most expansive economic force in their business...

...THE POLITICAL GAINS of reducing inflation, as measured, and raising productivity, as measured, through deregulation are not illusory, even though real social losses may be incurred and these gains may exist on paper only...

...In 1982 the problem for the owners was that the athletes they had hired were not local toughs who could be replaced nor workers whose labor could just as easily be done in Taiwan or Haiti...

...Free agency has never been part of pro football, and so, despite its dangers (the average career lasts 4.6 years), its players are paid less (an estimated $84,000 per year) than either baseball or basketball players...