Tom Brady and work as vocation

Tom Brady has announced his retirement again. We’ll see if this sticks this time, because it’s an interesting situation from the standpoint of economic theory (Non-sportsball content ahead for LGMers who use that word to describe their distaste for the athletic arts).

Tom Brady and the Income Effect

The income effect is the declining marginal utility of income. Brady has a net worth in the hundreds of millions — the exact figure is difficult to determine but really doesn’t matter for these purposes — although he apparently lost a lot of money in the Ponzi scheme world known as cryptocurrency. I don’t know if he lost money on net in his divorce from his also fabulously wealthy ex-wife, but again it doesn’t matter for these purposes: he’s an extremely wealthy man.

So more money should, all things being equal, not mean very much to Brady, since he has so much of it already.

On the other hand:

Tom Brady and the Substitution Effect

The substitution effect is what happens when somebody exchanges labor — meaning income-generating activity they wouldn’t engage in if not for the income it generates — for leisure, meaning stuff the person likes to do that doesn’t pay for doing it.

The conundrum here is that an already extremely rich person who can perform more labor for vast sums, i.e., Tom Brady, illustrates the fundamental tension between the two effects. Brady is extremely rich already, but he could probably make another $50 million next season, if he were to sign a one-year contract with any of several NFL franchises desperate for a still very good if not as great as he once was quarterback (Not to mention the economic value to the franchise of the publicity from doing so).

So in his case substituting leisure for labor is an extremely costly personal decision, even though he’s already extremely rich. ETA: A complicated factor here is that Brady can earn many millions via alternative labor, in the form of sports broadcasting etc.

And here we reach the point of this post, which is that this sort of economic analysis is psychologically and sociologically somewhat thin and barren.

Tom Brady continues/continued to play NFL football to the astounding age of 45 for a complex set of reasons that really aren’t captured very fully by the dichotomy created by the theoretical frames of the income and substitution effects.

Or to put it another way, the frames of “labor” and “leisure” don’t really capture, in many circumstances, why people choose to do the things they do.

I would like to write more about this now but I have to get ready for work, so you all take over.