Matt Evans: The Market Works, Or How The Desire To Make Money Contributes To Social Change
“By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it”
— Adam Smith, “The Wealth of Nations”
The NFL is having a watershed moment. After last weeks drama about Ray Rice assaulting his future wife, and this weeks revelations about Adrian Peterson being accused of child abuse, the NFL has taken some bold steps.
It has permanently banned Rice from the NFL, and Peterson is all-but banned. Additionally, the NFL has stated that changes will be forthcoming to its weekly TV programming, and was very explicit about the fact that it was adding 4 female members to an advisory panel.
The interesting thing is that Rice has not been convicted of any crime. Nor has Peterson. Unlike situations where restraining orders or similar pre-emptive penalties are applied, their continued inclusion in the NFL doesn’t increase the likelihood that they will commit more of the same types of acts that they are under suspicion of.
In fact, Rice’s wife is not interested in pressing charges against him, and decided to marry him after the incident was alleged to have taken place.
Why has the NFL convicted these two players prior to any court of law having done so? What is special about their status as NFL players that makes the NFL take this action? Does anyone really believe that a plumber would lose his job if a video emerged of him roughing up his fiance?
The reason is quite simple, actually.
The NFL exists to make money.
The NFL presumably has captured the entirety of the US market of men who are interested in football. The longstanding problem of the NFL is how to continue making more money when it already has tremendous market penetration, and when its prices are already significant.
The obvious answer is to increase the number of women who are loyal, paying, NFL customers. Professional advertisers and marketers learned long ago that tremendous profits were to be had by tapping into female purchasing power. This realization coincided with increased entry by women into the workforce, and increased female control over household buying power. Marketing has always targeted women in roles where women dominate; it has only been more recent that marketing has targeted women in areas where male awareness is saturated, and females are still underrepresented.
The NFL has made the decision that in order to increase its customer base, specifically women, it needs to take a strong position against domestic abuse and child abuse. If you think I am unfairly making this an issue about women, refer back to the new female advisory members. The NFL is being overt about the pro-female course it has charted.
However, that course change isn’t just a matter of internal reflection. Perhaps even more important than the fan dollars are the advertiser dollars.
The NFL doesn’t merely have to please its own fan base. It has to please the customer base of its advertising partners. Chief amongst these is Nike. Nike is an incredibly strong brand with women buyers, and simply will not alienate its loyal customers over the NFL’s misdeeds. Much like how Walmart can dictate terms to its suppliers, Nike is in a position to dictate terms to the organizations it sponsors. The voice of the advertiser’s customers is perhaps the most powerful voice of all.
In this way, even people who don’t care about football can, via network effects, impact the social attitudes of organizations like the NFL.
Today, the NFL believes that the fans and advertisers expect a player who hits a woman to be blacklisted indefinitely — even if the woman in question doesn’t press charges.
Today, the NFL believes that the fans and advertisers expect a player who lashes a child to be blacklisted indefinitely — even if no conviction ever materializes.
According to statistics, NFL players actually have a lower arrest rate than both NBA players and the general male population. So the myth of the thuggish NFL player is actually not supported by evidence.
Because of the NFL’s desire to make as much money as it can, from as broad of a customer base as possible, and to retain and attract the most lucrative advertising deals, it is actually dealing with societal problems more strictly than both the justice system and other competing sports businesses do.
In the future, the NFL will no longer optimize around players that are strictly amazing on the field. The NFL will come to be populated by people who do not get caught doing the “wrong” things off the field. The NFL already beats the general population on this metric, but apparently, it will continue to get better if it wants to keep making money.
The fans and the advertisers want an NFL that is as entertaining as possible while still meeting the arbitrary and malleable definitions of what is socially acceptable. Those definitions are different today then they were even 10 years ago.
The best way to realize social change is to appeal to the part of men that never changes and never rests: their own greed. This is the secret magic of capitalism; this is part of the “Invisible Hand” that Adam Smith wrote about hundreds of years ago.