Broken Window Parable Applies to Thinking, Too

A recent Kansas City Star editorial from a libertarian/conservative think tank argues that the locale will likely not profit overall from hosting games from the 2026 World Cup, which the three largest nations in North America will be co-hosting.

Let me quickly get this out of the way: As a soccer fan and a patriot, it was great to see commentary on the World Cup that was neither (a) tribalistically against soccer on the grounds that it wasn't invented in the good ole U. S. of A., nor (b) tribalistically fanatical about fútbol for exactly the same reason.

Onward...

The piece makes what many fiscal conservatives and libertarians will take to be a good economic case against hosting such events, based on Frédéric Bastiat's Broken Window parable, which the piece briefly summarizes. Writer Peter Jacobsen goes on to liken the tax funding for the stadium to money paid to fix said broken window:

Image by Pawel Czerwinski, via Unsplash, license.

The same problem exists with the World Cup. Cities must use resources obtained from taxpayers to win the bid for a World Cup. U.S. Soccer's aforementioned report estimates the cost per city in the hundreds of millions, though Kansas City Mayor Quinton Lucas claims the current cost is $50 million dollars in renovations to Arrowhead Stadium. But if history is anything to go by, this could be a big underestimation.

What Kansas City taxpayers would have used their money for is not something we can easily know. But it's easy to see how hotels, for example, may benefit from the World Cup. [link omitted]

While it is true that the money diverted towards this effort could have been spent on other things, that is not the fundamental issue this piece should have addressed. After all, we all have expenses pop up or even make choices about spending our money or time or attention that others might not.

Taxation, as a species of improper government coercion, is the real issue here, because it removes our control over our own money. There is nothing wrong with a piece showing how Bastiat's fallacy applies to major events, but this argument applies to anything funded by taxation.

Perhaps some readers, getting the hint from the book mentioned early on, will see that the same argument applies more generally to events like the Olympics or to "public" works projects like stadiums. Maybe a few might generalize even further. But I think this was overall an opportunity lost to point out that such efforts empty the pockets of some to enrich others (or for other purposes not our own).

In addition, and more interestingly, because the propriety of taxation is never challenged even in passing, the reader's imagination is taken up by this interesting analogy. The piece fails to either (a) rouse righteous indignation at the injustice of the funding scheme or (b) allow most people the space to imagine a better way of funding such events.

Perhaps large businesses could put together plans to fund such events profitably to themselves and partners without looting anyone. Indeed, under capitalism, whatever scheme to fund a World Cup, an Olympics, or a World Series would be entirely voluntary and the only people who would take a bath if it were unprofitable would be the people who decided to invest in making it happen.

Bastiat's parable applies not just to the money in your pocket, but also to what you spend your time and attention on.

-- CAV