World Cup (4)

Posted in economics, sports by jrahman on July 2, 2010

The World Cup is entering its final stages, so it’s time wrap up this series of (re)posts.  The first post was about the political economy of football, and the second one about the difficulty in quantitative analysis of the game.  The third post noted that, contrary to expectations, and unlike American sports, football is dominated by a few big teams, whether at club or international level. 

So, what gives?  Answer over the fold, with some more political economy.

Well, in a comment in one of the earlier posts, Zafar Sobhan of the Daily Star articulates the answer pretty well, so I’ll just reproduce his comment.

the reason that victory is more democratized, for want of a better word, in american sports is as simple as it is delicious. socialism! pro sports in america have a draft system, whereby incoming young talent do not get to choose who they play for (which, in european football leagues, for instance, in effect, allows the bigger teams to outbid everyone else), but must go to the team that drafts them, and the draft order is determined, roughly speaking, in inverse order of the last season’s standings, i.e. the worst teams get to pick first.

in addition, in most sports there is also a salary cap, different in different sports, that limits how much a team can pay an individual and how much the total wage-load can be. it is these rules that bring about parity in american sports.

interestingly enough, most commentators in america decry the dominance of the big teams and complain that salary caps are too easy to circumvent and that big teams continue to leverage their financial advantages (playing in a large media market like new york or los angeles, for instance) for unfair gain and believe that the odds are still unfairly stacked against the smaller-market teams.

even more interestingly, a blue-ribbon panel appointed to look into the problem of big-team dominance and stuffed with rock-ribbed capitalists such as george will and paul volcker recommended even more socialism (e.g. greater revenue sharing) as the only way to save baseball!

I couldn’t agree more. 

But there is more to this.  Think about Marx’s predictions about capitalism.  Marx said that capitalism would collapse because competition will give way to monopoly.  Of course this prediction has not come to pass.

There are two reasons why competition has not led to monopoly in most markets.  First, most markets have firm entry as well as firm exit in the long run.  That is, people enter a market when they see existing firms earning lots of profit, and this prevents monopolies from forming.  Secondly, there is technological progress, which opens up all sorts of new products and markets.  Again, this prevents monopolies from forming.

However, in the context of a sports league, clearly neither of these can happen.  There can only be so many clubs, and rules of the game change slowly, if at all. 

So Marx’s prediction of competition giving way to monopoly may well come true in an unregulated league.  To prevent this from happening, you need outside intervention, you need redistribution, you need, for the lack of a better word, socialism!

Therefore, football-lovers of the world, unite!

Let the international unite the human race.

Finals prediction (on the eve of the quarter-finals):

Brazil vs Argentina

(one hopes there is no power failure in Dhaka, otherwise the government may well fall).

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  1. tacit said, on July 4, 2010 at 8:25 am

    I’ve got the blues, Jyoti Bhai. The blue and white blues.

  2. Syeed said, on July 5, 2010 at 9:23 am

    1. After Argentina’s last match, “someone” commented on my FB wall that I have gone crazy. I posted this on UV on the same night, and my favourite boro bhai accused me ofmostishko bikriti. Suddenly everything make sense 🙂

    2. I prefer your innocent wrong prediction over “sinful right prediction”! I know someone betting for the enemy team- in case upset happens, he will still get the money. Initially I thought its an ingenuous idea. Wanted to try it before the last match, but couldn’t do it.

  3. সাতকাহন « Mukti said, on September 21, 2012 at 1:48 am

    […] Morality of football.  (My football posts.)  And Tanoy Dutta’s new […]

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