College sports meets the free market

What do free markets, socialism and college football have in common?

The pre-transfer portal era of college athletics functioned under a controlled, restrictive system that resembled certain aspects of socialism. Student-athletes were awarded scholarships — much like merit-based academic scholars — providing access to higher education, often fully funded or subsidized. However, unlike traditional students, athletes faced severe restrictions. While students had the freedom to transfer, study abroad, take time off, or work part-time, athletes were effectively tethered to their universities. The system made transferring to another institution nearly impossible, economically unwise, and strategically discouraged.

The transfer portal transformed college athletics by injecting free-market principles into the system — mirroring the fundamental differences between socialism and capitalism. In “The Wealth of Nations,” Adam Smith describes the "invisible hand" that governs free markets. A core tenet of this principle — a foundation of modern economics (and the transfer portal) — is labor mobility: allowing workers to move freely in search of better opportunities while industries compete to attract and retain talent at the highest price they can afford, and the lowest price labor will accept.

That is precisely what the transfer portal has done, it has mobilized labor. There is no better explanation. Critics of the system should consider how top talent is retained and distributed in corporate America. Just last year the OpenAI CEO went on the record grieving that his top engineers were being poached by Google and other elite suitors due to egregious paydays. Athletically, this mirrors the path of the last three Heisman Trophy winners, who all transferred to programs that offered an advantageous and better fit, paving the way to college football’s highest honor. Free agency in professional sports and the chronic coaching carousel are also no exception. Why do universities — and large corporations — spend millions to lure top talent from competitors? The answer lies in labor mobility. It is neither malicious nor unethical, it is simply good business and a natural outcome of economic competition.

Lame critics often note changes to “team spirit” and state that a free education is enough for an 18-year-old. But these arguments miss the point. Only a small fraction of athletes benefit from these lucrative opportunities, and restricting player mobility to uphold outdated ideals is simply irrational. Why should a system prevent individuals from earning what the market determines they are worth? Under the old system, a third-year mediocre starter at a DI FCS school held the same value as marquee athletes like Tim Tebow or Caitlin Clark — players who solely sell out stadiums. It would be no different from Warren Buffett and your local Edward Jones adviser being paid the exact same. That’s ludicrous.

The real value of the transfer portal isn’t just in monetary compensation; it’s in enabling talent to allocate itself to the best institution. Nothing more, nothing less.

Creighton Mitchell of Urbandale played football for two years at the University of North Dakota, both before and after today’s NCAA transfer portal was implemented. He went on to obtain an economics degree from Penn State and will soon begin his investment banking career in Boston.