professional sports venues
TRANSCRIPT
Should Government Provide Funding for Professional Sports Venues?
Whether government should provide funding for professional sports venues or not is an
issue that transcends the pragmatics of financial feasibility standards and complex economic
studies. At the heart of the matter is a more fundamental and perhaps even more important
question: what role should government play in a market economy? By answering this question,
the answer to whether government should provide funding for professional sports venues
becomes clear.
Perhaps an analogy will help. Much like an umpire in baseball does not field the ball if it
is hit towards him, rather he gets out of the way so as not to interfere with the game being
played, so government should avoid actively intervening in the marketplace. Doing so makes
both the game and the economy respectively better—after all, who would want to watch a
baseball game knowing that the umpires could actively participate in the game? Moreover, just
as it is strictly the role of the umpire to enforce the rules governing the ball players, so the role of
government should be to strictly enforce the laws governing market players. A government
policy of economic non-interventionism promotes a healthier economic environment whereby
that which is economically beneficial flourishes and that which is economically destructive
succumbs. The net effect is an increase in the living standards of all.
More to the point, government financing of professional sports stadiums is well outside
the scope of government’s role. Using tax dollars to finance the construction of a new stadium is
simply the concentrated redistribution of resources. While it is easy to see the jobs created during
the construction phase and the permanent jobs created afterwards, what is not easy to see, and
what often times goes ignored, are the jobs lost as a result of this capital redistribution and the
permanent jobs that would have been created had those tax dollars been allowed to flow freely
through the economy.
Assume, for example, that government does not finance the construction of a new
professional sports stadium and that the taxes that would have been levied to finance it are
currently in the pockets of taxpayers. Furthermore, assume that a portion of the taxes that would
have been levied are instead spent by taxpayers on dining out. As a result, assume that 100 new
jobs are created in the restaurant industry as a result of this influx of spending. Now, imagine
that government does finance the construction of a new professional sports stadium. Taxes are
levied, and the money that would have been spent on dining out is now reallocated to the
construction of the new stadium. The 100 new jobs that would have been created in the
restaurant industry are now reallocated. However, since they are never created in the first place,
the economic argument that the restaurant industry is suffering at the expense of the stadium’s
construction is lost on most people. This begs the question, who should decide how capital is
allocated? Should the economic process govern our economic decisions or should the political
process? To me, the answer is simple—let economic decisions be made through the economic
process, not the political process.