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Friday, October 21, 2005


Steroids in Baseball

With the baseball season winding down, not all of the focus has been on the winning teams, but rather that steroid use has been tainting the game, some of its star players, and of course the controversial records it might have helped break. Many congressmen, like Senator John McCain of Arizona, have been very outspoken against the perilous use of steroids. Many fear that past and continued steroid use in the major leagues could have very serious repercussions in many facets of life such as the dangerous impact it has made with Americas youth and the records it might have helped athletes break. In a hearing brought about by the House Government Reform Committee, Committee members concluded that the sports drug testing policy wasn’t strict enough in deterring the use of steroids. Congressional action was threatened to reform the sports testing policy more in line with the Olympic policy, where first time offenders are handed a two year suspension compared to 10 days.

In speaking of the justification for Congress’s actions to change Baseballs steroid policy, we have to look at how steroids affect the market. In so far as that many congressmen are angry that steroids may have helped break records, that doesn’t give them an allowable reason to legislate. The only way their intervention would be necessary is if there is a market failure because of the use of steroids. Congressman Henry Waxman argued that “There is an absolute correlation between the culture of steroids in the major league clubhouse and the culture of steroids in high school gyms.” Congressman Waxman is making the argument that there is a negative externality involved with the use of steroids in the major league level. The extent that teenage steroid use is dependent on major league use is very debatable.

Even if the major leagues adopted a more stringent policy, it would be unforeseen if it would help prevent steroid use among teenagers. The potential salary an athlete could earn playing in the major leagues is just as good or better of a reason to use steroids as seeing a professional ballplayer using them. The opportunity cost of not taking steroids could be too high for players at the cusp of being a major league caliber athlete. Anyway they could improve their chances of making it into the majors they might take, regardless of if major league players discontinue their use of steroids. Steroids may hurt the legitimacy of the records it breaks but I don’t see it as a negative externality. It’s too implausible of an argument that if teenagers are using steroids, it’s because they are emulating their major league heroes. I don’t think steroid use in the major leagues is as much of a market failure as many of our members of congress do. Although their concerns are justified, the use of legislation to enact harsher policies isn’t from an economical stance.

If we did think steroids were associated with a negative externality, would the appropriate policy from the economic point of view be to regulate use? Even assuming a negative externality, do you think it is likely that the optimal quantity of steroids is zero?
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