Economics professor Greg Mankiw blogged about professional poker players:
Third, there is the professional gambler, such as the one in the Slate article (or the boyfriend of blogger Jacqueline Passey ). In some ways, this case is the saddest of all. I have no doubt that some people can, in fact, make a living gambling. But doing so requires a lot of intelligence and savvy. It is a shame that someone with so much inherent ability wastes it doing something of such little social value.
But Mankiw seemed uninterested in the plight of the professional poker player in the article he linked to who only made $300/week before he became a professional poker player. Clearly there’s a huge inefficiency in the way people are allocated to jobs if someone with “so much inherent ability” is only able to earn $300/week. The guy in the article clearly didn’t choose to waste his ability on poker, but rather it was the must lucrative career available to him.
Professor Brad Delong then chimes in with the following comment:
Somebody good enough at calculating odds and reading situations to make money as a professional gambler should pick a segment that is positive-sum rather than zero-sum for the economy as a whole: he should go to Wall Street and become part of the global capital allocation mechanism.
I doubt very much that people are quitting their Wall Street jobs to become professional poker players. Professor Delong is obviously unaware of the fact that Wall Street only hires people with MBAs from schools such as Harvard, Wharton, or Columbia. It doesn’t matter how smart someone is or how good he is at “calculating odds and reading situations.” If his only education is a bachelor’s degree from a state school then Wall Street is not interested.
This ties in to my previous posts about how IQ is unrelated to income.
Economics professors don’t seem to understand how our labor market really works.