Following my previous post about English football’s Dutch Disease problem here http://rayestu.com/2013/05/24/why-the-three-lions-wont-have-too-many-more-good-players-the-dutch-disease/, I will further elaborate my thought on footballonomics.
Most sane economists would tell you that free trade is good for countries. It makes countries produce more of what they can do better than others and import what they can’t, a much more efficient way of doing things. It lets people get higher standard of living as they could buy foreign goods (presumably of better quality) at a cheaper price. It destroys cartels and monopolies and induces more competition among producers, for the benefit of consumers. It provides business opportunities for a lot of people as they can sell their products abroad easier. And many more. It might be bad for domestic producers who cannot compete, but even opponents of liberalism would yield that free trade is at least good for consumers.
The key is that there is two parties in the discussion of free trade: the consumer and the producer. What is good for one may or may not be good for the other. The objective at hand should not be to simply to make domestic producers win, but also to make consumers happy. To increase the nation’s prosperity, or whatever you call it. But when we are talking about national football associations there are no multiple parties or multiple objectives, there is only one: to help the the national team succeed. In trade terminology: we have to do whatever is necessary to protect the domestic producers (the national team), and help them in their quest to dominate international markets.
Now suddenly subsidies, protectionist regulations, and even a little xenophobia start to make sense don’t they? Football associations should make sure that they get a hold of things. They should subsidize the domestic producers (invest big money in soccer academies, football scholarships, and so forth) to make sure they keep producing talents consistently. They should make sure not too many foreign players could come and take slots from local players, no creative destruction should take place. And then they should encourage their established players play in rival countries to get more experience, skills, and more importantly, to take out slots from their rivals local players.
Bottomline, while international trade is not a zero sum game, international football is. Gotta be the winner.