Why abundance weakens incentives – and why constraint keeps winning
In economics, the paradox of plenty—often called the resource curse—describes a counterintuitive outcome: countries rich in natural resources frequently develop weaker institutions than those forced to operate under scarcity. The problem is not abundance itself. It’s that when resources are cheap to replace, failure becomes survivable, and learning slows down.
Major League Baseball has quietly built a similar system.
Draft capital, revenue sharing, and payroll flexibility function as renewable resources. They replenish automatically. And because they do, they can weaken the very incentives that produce strong organizations. Teams with abundant access to inputs often underperform those forced to operate under constraint. Not because they are less intelligent or less ambitious, but because constraint is what disciplines institutions.
To understand why, we need a simple framework.
How Teams Actually Turn Resources Into Wins
Every baseball organization operates with three moving parts:
- Resources: draft position, prospect capital, payroll flexibility, revenue inflows
- Institutions: player development, scouting, analytics, contract discipline, internal accountability
- Constraints: payroll limits, competitive pressure, ownership tolerance for failure
Resources by themselves don’t produce wins. They have to be converted. That conversion is handled by institutions, and institutions only improve when constraints force them to.
When replacement resources are cheap or automatic, mistakes carry little penalty. When constraints bind, mistakes become costly, and learning accelerates.
This produces two very different organizational paths:
- One where teams accumulate inputs but fail to improve their conversion process
- Another where scarcity forces discipline, innovation, and sustained overperformance
That difference is the paradox of plenty in baseball form.
This offseason gives us three live case studies.
1. Kyle Tucker: When the Boom Ends, Rents Get Collected
Kyle Tucker’s eventual arrival in Los Angeles is best understood not as a single free-agent splash, but as a two-stage redistribution of surplus value.
The Houston Astros traded Tucker to the Cubs during the 2025 season, well before this offseason. That wasn’t a sign of failure. It was an acknowledgment that Tucker had crossed a threshold from surplus asset to fully priced one.
For nearly a decade, Houston operated under extreme constraint:
- High draft capital from losing seasons
- Little margin for payroll error
- Strong internal pressure to convert cheaply acquired talent
Those constraints forced elite institutional performance. The Astros turned draft position into stars under control, below-market wages, and organizational depth that masked mistakes. That was the resource boom.
The trade signaled the end of that phase.
Once Tucker reached the open market and signed for top-of-market money with the Dodgers, the process completed itself. Surplus value created under one institutional regime was repriced and absorbed by another.
This is where the Norway analogy applies.
Norway is often cited as the rare country that avoided the resource curse. It didn’t spend oil money as it arrived. It built institutions first, saved surplus in a sovereign wealth fund, and only then allowed that wealth to flow through the economy.
The Dodgers occupy the same position in baseball.
They didn’t draft Tucker. They didn’t tank for him. They didn’t reorganize their system to accommodate him. They simply absorbed him—financially and structurally—without changing how they operate.
That’s abundance after discipline. Resource importation without institutional erosion.
This is not evidence the Astros failed. It’s evidence they succeeded so thoroughly that the constraints which built them disappeared.
Houston created surplus under constraint; Los Angeles absorbs surplus after discipline.
2. Gavin Lux for Brock Burke: The Illusion of Agency
At the other end of the spectrum sits a transaction like the Reds’ three-team trade involving Gavin Lux. The decision to move Lux after just one season is defensible in isolation, which is precisely what makes it revealing.
Cincinnati acquired Lux at real cost (parting with Mike Sirota and a draft pick) to address a clear need on a roster hovering at the edge of contention. Lux was not a bust. In fact, he was one of the Reds’ more productive hitters in a lineup that struggled to score consistently. The team narrowly missed the postseason, gained a full season of information, and then reversed course, sending Lux out for Brock Burke.
Publicly, the explanation is clean: payroll flexibility, roster clarity, and a path cleared for Sal Stewart in the Cincinnati lineup.
Institutionally, it’s incoherent.
If Stewart was the plan, Lux should never have been acquired at that price. If Lux was a meaningful test, one season was insufficient to evaluate either the player or the process that identified him. In either case, the organization exits the transaction cycle having learned nothing durable. The Reds no longer have Lux. They no longer have Sirota. They no longer have the draft pick. Their competitive position is unchanged, and their confidence in their internal evaluations is no stronger than it was before.
This is what late-stage resource dependence looks like in baseball. When institutions are weak, organizations substitute motion for progress. Transactions create the appearance of agency, but they do not improve the conversion process that turns resources into wins.
For a low-revenue team like the Reds, the problem is not a lack of flexibility. It is too much of it. Each move resets the accountability clock. Each reversal dissolves the consequences that force learning. The constraint that should discipline decision-making never binds.
Changing the constraint would mean fewer moves, not more. Longer commitments, not quicker exits. Public and internal alignment on prospect timelines, even at the cost of short-term discomfort. Letting mistakes persist long enough to diagnose them instead of erasing them with the next transaction.
The Lux trade did not fail because it was wrong. It failed because, after a full season of information, it left the organization exactly where it started – minus assets, minus conviction, and no closer to understanding how it turns inputs into outcomes.
That is the illusion of agency.
3. Bo Bichette to the Mets: Capital as a Substitute for Learning
The Mets signing Bo Bichette to a three-year, $126 million deal is the most revealing case from this week – not because it’s a bad signing, but because of what it signals.
This is not an indictment of Bichette. It’s a diagnosis of the regime.
Deep into the Cohen era, a pattern is emerging:
- Money absorbs mistakes faster than institutions can learn from them
- Each new acquisition resets the accountability clock
- Success is always deferred to the next transaction
In the framework outlined above, the issue is clear:
- Resource inflow is enormous
- Constraints are artificially muted
- Institutional quality struggles to compound
That’s why this signing feels different after another missed postseason. It’s not part of a visible accumulation process. It’s an assertion that resources can stand in for structure.
Economists point to this exact behavior in early-stage resource curses: capital consumption without institutional reinforcement. The danger isn’t spending too much. It’s learning too slowly.
Scarcity Builds Winners
The paradox of plenty in MLB is not about disliking money, draft picks, or ambition. It’s about understanding what actually produces sustained success.
Resources matter. But they are inert without institutions. And institutions only strengthen when mistakes are costly enough to demand correction.
Constraint is not the enemy of winning. In baseball, it is often the cause of it.
As surplus continues to flow – from draft to market, from control to capital – the real question facing fans and front offices is not who is accumulating the most resources.
It’s this:
Which teams are building institutions, and which are just replenishing inputs?
That distinction determines who escapes the curse.
Big West Dugout 