As a regular visitor to a minor league baseball stadium, I have always been curious about the difference between those who will make the big leagues and those who will not. In rare cases it is obvious. I was in awe the day I say Pedro Martinez make his AAA debut in Albuquerque. I had never seen a change-up like that here. But usually, to my not-very-cultivated baseball eye, it is not at all obvious.

In today’s New York Times magazine, Michael Lewis has a piece that wanders in quietly – almost like a baseball game, I suppose – through the question:

As Paul DePodesta, general manager of the Los Angeles Dodgers, puts it: ”A very small percentage of the players in the big leagues actually are much better than everyone else, and deserve to be paid the millions. A slightly larger percentage of players are actually worse than players who are stuck in the minors, but those guys usually aren’t the ones getting the big money. It’s the vast middle where the bulk of the inefficiency lies — the player who is a ‘known’ player due to his major-league service time making millions of dollars who can be replaced at little to no cost in terms of production with a player making close to the league minimum.” Just beneath a thin tier of truly great big-league ballplayers is a roiling inferno of essentially arbitrary promotions and demotions, in which the outcomes are determined by politics, fashion, misunderstanding and luck. Put another way: the market for most baseball players is hugely speculative, more like the market for, say, new Internet stocks than the market for stocks in companies with healthy earnings. The investors don’t know how to value the assets.