LeBron James, Loyalty and the Economic Future of Cleveland

I don’t follow follow professional basketball, but it was virtually impossible not to avoid the media frenzy around LeBron James’ decision to move to Miami and leave Cleveland. The outcry from loyal Cavaliers fans has been particularly vocal, with many fans and the team management feeling betrayed by LeBron for having the audacity to move to a team where his skills and resources could be optimized. In James’ case, the quest is for a national championship. Despite his star power, he couldn’t lift Cleveland to a national championship. (We seem to forget this is a team sport.)
Reason has a vested interested in Cleveland because of its popular six part video series on the city’s decline. Nick Gillespie has an excellent commentary on the LeBron James affair and its implications for the city as well. Nick points out:
“While there’s no certainty that teaming up with the Heat will lead James to the winner’s circle, it’s definitely the case that he doesn’t deserve abuse for taking full advantage of the free agent opportunities available to him. As labor in a stridently enforced cartel, he puts the asses in the seats and he should extract whatever he can during a career that can end at any minute. We forget that it wasn’t so long ago that stars of James’ stature were totally screwed by an oppressive management system (Matt Welch doesn’t, in this great essay about how Joe Willie Namath, Richie Dick Allen, and Oscar Big O Robertson ushered in an age of “Locker-Room Liberty“).
“More important, Cleveland’s destiny as a dying industrial city is in no way linked to James’ staying or going. As economist Dennis Coates has pointed out, having a major professional franchise in an area actually reduces per capita income by about $40 (believe). Cities don’t rise and fall on the backs of their sports teams and sports figures (trust me, I lived in Buffalo three of its four Super Bowl years and nothing would have changed had Scud Norwood split the uprights against the Giants).”

I agree, but the very personal and emotional responses from those in Cleveland also says a lot about the need to change mindsets in struggling cities. At the end of the day, LeBron James did what any entrepeneur would do: He allocated his resources (his talent) with the hopes of maximizing his return (cementing his legacy with a championship). Those opportunities were greater in Miami than in Cleveland.
The idea that LeBron should have stayed in Cleveland to show loyalty to his hometown (although he really is from Akron), really demonstrates a classic economic victim mentality that sidesteps the real issues and problems the city (and region) faces. Are Clevelanders really saying that, as a matter of principle, LeBron James should avoid maxmizing the value his talent could bring to the NBA and himself by staying in Cleveland? After all, even though he was an MVP, the team wasn’t able capitlize on his talent to take the franchise to the pinnacle of success in his profession. Should the most talented entrepreneurs and workers consciously make decisions to work in jobs that don’t fully utilize their skills? Based on the team management and fan response to LeBron James, the answer is “yes.” With this attitude, we shouldn’t be surprised that the city and region are struggling economically.
Cities prosper by adding value and unleashing the productive value of their limited resources, not by constraining them. LeBron James decided, after seven years in Cleveland, his talents could best be served in a team environment in Miami, not Cleveland or, for that matter, New York or Los Angeles.
LeBron James is doing what all productive and rational thinking entrepreneurs do: they use their resources to the most productive use. That is the lsson Cleveland should take to heart. Cleveland’s economic prosperity will not depend on charity, or limiting the potential of its entrepeneurs. If there is a lesson here, it’s that city needs to take a hard internal look at what limits entrepreneurial potential in Cleveland, identify those barriers, and remove them.