2. Talent in baseball is not normally distributed. It is a pyramid. For every player who is 10 percent above the average player, there are probably twenty players who are 10 percent below average.
I agree. (Others don't; for further discussion also see here.)
But what is this thing called "talent"? Talent is a combination of a high level of skill and sustained, consistent performance. Skill in baseball is measured through metrics such as ERA (earned run average) and OPS (on-base average plus slugging percentage) -- measures that turn counting stats into an efficiency or rate measure. While this type of measure is important, they fail to account for the fact that some players have lengthy careers, while other players have a very short MLB career. Teams will sign long-term contracts with aging superstars because the player's skill is still above average, even though they may have diminished with age.
In short, career length becomes a valid proxy for talent.
The charts below plot the number of pitchers over the period 1996-2009, by both the number of games played (which favours the relief pitchers) and innings pitched (which favours the starters). During this period a total of 2,134 individuals pitched in MLB -- but the chart shows that very few of them stuck around for any length of time.
At the head of the "games" list at 898 is the still-active Mariano Rivera, while the pitcher with the most innings over this period was Greg Maddux (2887.67 innings; and Maddux threw more than 2,100 innings before 1996, as well). These two individuals, and other Hall of Fame calibre pitchers, are out at the far right of the long tail. Close to the origin at the left are pitchers whose entire career lasted but 1/3 of an inning -- a single out.
Figure 1: Number of Pitchers, by Career Innings Pitched (1996-2009)
Figure 2: Number of Pitchers, by Career Games (1996-2009)
But what of the average skill level of those pitchers? Pitchers who get a small amount of MLB experience (fewer than 27 innings) have a higher ERA than those who get more opportunities to pitch. This group -- 27% of all MLB pitchers -- recorded an average ERA of 8.08, compared to 5.15 for the 42% who pitched between 27 to 269 innings, and 4.45 for the 27% who threw between 270 and 1349 innings. The elite, those who pitched 1350 innings and above, recorded the lowest ERA of all, 4.17.
In spite of the wide variance in the ERAs of the coffee drinkers, the differences in the mean scores are statistically significant.
Figure 3: MLB Pitchers, average ERA, by number of innings pitched (1996-2009)
In summary: there is an abundance of players who are less talented than the major league average, while at the same time the number of above-average talents is low. The distribution, at the major league level, is not normal. Just like Bill James said 22 years ago.