Chinese Basketball and Adam Smith

by Elaine Schwartz    •    Jul 21, 2011    •    737 Views

It is called the “womb to tomb model.” Selected as young children because of their exceptional height, future Chinese basketball players are educated separately. Whereas traditional Chinese schools have few, if any, extracurricular activities, their sports schools focus on athletics. Run by a government commission with programs that echo the former Soviet Union’s 5-year plans, their goal is world-class teams.

It has not worked out that way. Yes, Yao Ming, the #1 draft pick of the Houston Rockets in 2002, is Chinese. However now, the China State General Sports Administration is looking for lots of Yao Mings. And that is the problem. Not only has the Chinese government been unable to predict who will be a great player but also, they have not figured out how to create viable teams.  Explained by the NY Times, the Chinese authorities did not realize that they also needed smaller faster talent, and, even if they had known, the system precludes them from selecting the right people and optimally developing their skills.

By contrast, U.S. basketball has been described as Darwinian. It is a recreational activity, it is a school sport, it is a profession. Self-selected, coach-selected, team-selected, informal and professional, no government tells people who should and should not play. Maybe like Adam Smith?

This Wharton Knowledge article describes the history of Chinese basketball and its contemporary relationships with the NBA and Nike.

The Economic Lesson

Seemingly chaotic because government does not exert central control, there is an underlying order within a market system that was described by Adam Smith. Although consumers and producers are motivated by their own self-interested incentives, people’s wants and needs are satisfied. In a similar way, perhaps, the U.S. basketball system successfully develops talent.

An Economic Question: Might we credit the success of basketball in the U.S. to a system that resembles the apparent haphazard character of the market but actually has its own inherent order? Explain.



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