Why legalizing vice in Corporate America might not be a great idea

One problem with the on-going legalization of vices like sports gambling and marijuana is that, over time, it shifts the quality of people whose job it is to market the vice away from organized crime-adjacent disreputables toward MBA’s.

Technical people have much to say about the downside of MBAs, most of it no doubt valid. Still … given enough time to master a new market, MBA-types tend to be really good at their jobs.

E.g., big league baseball front offices used to be run by the more presentable of baseball lifers, but now they are run by guys like Andrew Friedman of the Los Angeles Dodgers who’d otherwise be working at hedge funds. Los Angeles has been the highest attendance market for almost half the seasons since the Dodgers moved to L.A. in 1958 (they’ve led all of baseball in attendance for 33 out of 67 seasons), but only under Friedman have they figured out how to convert their vast wealth into consistent dominance.

From 2017 onward, Friedman’s Dodgers have been playing .641 ball in the regular season. The most recent comparable run appears to be the Lou Gehrig-Joe DiMaggio New York Yankees of 1935-1942, who played .640 ball. (Post-seasons, of course, have been a different matter for the Dodgers, with only one World Series title in the Clayton Kershaw era.)

Marijuana, for example, was for generations diffidently marketed by potheads. Increasingly, however, it's being marketed by go-getters who read the Harvard Business Review for fun.

Consider food and beverage marketing. It's always been legal and respectable, so many fine people go into it. They've gotten really good at it, making it practically a science.

And Americans have gotten really fat.

When I worked in market research (1982-2000), one of our best executives took a job at a client, a gigantic beverage and snack company. She came back and gave a presentation in which she enthusiastically explained that, crazy as it sounded, the ultimate goal of Giganto Corp. was to make sure that their refreshing soft drinks and delicious salted snacks were within arms’ reach of all Americans at all times.

“Uh-oh,” I thought.

At that time, about a third of a century ago, I, a devotee of the Wall Street Journal editorial page, was extremely enthusiastic about capitalism. But even I back then could recognize that tasking high quality individuals like my friend with catering ever more to Americans’ impulsive instincts was a recipe for trouble.

One of my nightmares is a libertarian America in which Costco, using its vast economies of scale and supply chain expertise, sells 100 grams of Coca-Cola brand cocaine party packs for $999.

Fortunately, that hasn't happened.

Yet.