Thursday, December 13, 2007 former U.S. Senator George Mitchell released the results of a 20-month long investigation into the use of steroids in major league baseball. The report indicated that usage of steroids has been widespread for at least a decade and has occurred in virtually every major league clubhouse. In addition to old names like Barry Bonds and Jason Giambi, dozens of new names surfaced, including future hall of fame pitcher Roger Clemens. Other notable names listed were Gary Sheffield, Miguel Tejada and David Justice. Mitchell recommended to baseball commissioner Bud Selig that none of these players should be punished. I think he’s right, and I’ll tell you why.

Like almost every situation in life, one needs only look at the “marginal benefits” vs. “marginal costs” of a typical major league baseball player over the past fifteen or twenty years to understand the essence of this baseball steroid story. In economics we teach that almost all human decisions are made at the “margin’. A rational person should engage in any activity where the extra (marginal) benefits exceed the extra (marginal) costs. However, if the additional costs exceed the additional benefits, the person should refuse to engage in that activity.

In that context, let’s examine the decision-making process of a talented major league baseball player over the past fifteen years who was considering the use of steroids or human growth hormone. The marginal benefits are the extension of his major league career, rapid healing from injuries, improved performance in hitting, fielding or pitching, and the higher salary that such improved performance demands. For Roger Clemens, the extension of his pitching career for two more years was worth an additional $60 million. There may also be the non-pecuniary rewards of increased stardom, fame, and a trip to the hall of fame.

What about the marginal costs of using these substances? Due to the fact that baseball team owners, the players union, and Commissioner Bud Selig have turned a blind-eye to performance enhancing substances for more than a decade, their have been virtually no league-imposed penalties for players that have used them. For most of those years, steroids weren’t illegal and there were no routine tests for the use of any substances as a condition of employment. In other words, the short-term marginal costs were zero. The most significant “marginal cost” to a player of using these substances was long-term, namely, an increase in long-run health risks and shortened life expectancy. But, heck, if coal miners are willing to shorten their lives to make an additional $10 an hour, can we blame a baseball player who will shorten his life expectancy by the same number of years to make an additional $50 million?

Over the past twenty years, for many baseball players, the substantial marginal benefits of using performance-enhancing substances far outweighed the almost negligible short-term marginal costs. Given the incentives to use the substances, without any meaningful sanctions, there is no reason to assume that anything other than widespread drug use would have occurred. I’m not saying that use of these substances is desirable or noble, but I certainly understand why it happened.

Rather than putting asterisks on the names and records of those who were identified in the Mitchell report, in my opinion it would be better to simply put an editorial asterisk on this “steroid era” of the colorful history of baseball. Hopefully, as the Mitchell report recommends, baseball will install an effective drug treatment and prevention program. Programs should also be targeted to young people in all sporting activities, informing them of the health consequences of performance-enhancing substances. Nevertheless, as long as the human race endures, people will attempt to find shortcuts to success.