Tuesday, February 28, 2006

A Hat-trick for Globalization

by Berly

All the world is a football field,
And all the men and women merely players

Forgive my pun on that Shakespeare sonnet, but if you live in Italy football is everywhere. Even if those magnificent churches are empty on Sunday, the stadium and pubs are never empty when a game is on. Sunday night’s TV is full with football coverage and Monday morning in class in time to tease between supporters of different teams.

I came across an excellent essay by Branko Milanovic, an economist at the Carnegie Endowment for International Peace, entitled Learning Globalization From Football.

So, let us set to watch a football match between near-ideal globalization represented by football (F) and real world (RW) globalization.

In football the markets works since supply met their demand. A team can hire any player they like if they can pay the price and a player can look for team that suits its taste after the contract expire (one can even break the contract, for a price). No monopoly and price fixing. Compare that with real world oligopolistic business arrangement and trade restrictions.

The whistle is sounded and the game begins… the F team make a beautiful breakthrough and Inzaghi scored with high curve that elude the goal keeper. 1-0!

In football, there is no limitation of player mobility. All of Arsenal’s players are non-British nationals and the coach is French. Most of top European clubs employed non European in their team. And how does an African or Asian get spotted? Just play well in World Cup or regional cup and flood of offers will come. Meritocracy is at work here and eveyone has a chance. Compare with real world where it’s very difficult (especially for non western) to work across countries with all the licenses and legal limitations.

The keeper of RW is making illegal move and resulted in Penalty. Totti took the shoot and make a powerful curving banana. 2-0!

Remember when Senegal beat France in 2002 World Cup? A French friend of mine give excused that it’s actually French against French since most of Senegal team play on French league. In football, after learning to play with the best and in the toughest league the players will go back to play for their own countries in World Cup and Olympics. Thus, spreading their hard gained skills to their fellow countrymen and brings pride for their country. Similar arrangement need to be made in globalization where the ex-pat from developing countries can share their skill and network to their countrymen beside sending remittance to their immediate family.

Ibrahimovic and Del Piero bring the ball crossing defensive line and work toe-to-toe in order to face the lonely goal keeper. A soft touch by Ibrahimovic brings the score to 3-0! ... Long wistle is sounded and time is up.

If only the whole globalization is a football field…

There are still 3 British citizens on current Arsenal team.


a.p. said...

Actually, the Arse still have three English: Sol Campbell, Ashley Cole and Theo Walcott...

Berly said...

Thanks for the correction, I was just quoting from Milanovic without checking further. Errata is added to the text.

But the point stand, globalization work for footbal due to less of nationalism sentiment on the player composisiton and more on the result.

Compare to the messy divestation and privatitazion process in Indonesia (disclaimer: I am not saying all public company must be privatized).

Anonymous said...

for me, Arsenal is the perfect simbol of a globalization institute... it is effective & efficient, mind u Arsene Wenger (AW) is an economist turned football manager...
for a team that has a youth academy that is not even in the top 5 of British football (not just England), for them to achieve what they've achieved is completely spectacular...

alief.aulia said...

just remind you not too excited.
like anti-globalization movement that is now happening around the world, football field also facing the same problem. Europe is now trying to regulate the amount of foreign player a club can have.
those who against globalization (haloo, Mr Fidel Castro, Mr Hugo Chaves, Mr Evo Morales, Mr Luiz Inacio Lula da Silva, and the other gank of latin america), are the leader of the country which is ironically gaining much by the globalization of their football player.
Oh, I forgot, Maradona who used to play for Boca (Argentina), Barcelona (Spain), Napoli (Italy) was joining Mr. Castro to lead the march against Bush (globalization symbol?) on the last Summit of Americas.

rizal said...

me not anti globalization -- I love it.

But, what about this:
(F)-> level playing field-> glob(whatisit)can work
(RW) -> no -> I don't know, you tell me

what if I buy a so-so Japanese player --instead of a great skilled young English player-- to attract Japan market. Call it glob-whatisit?


Berly said...

Hmm, then it will be like a company that put a well conected but not-so-skilled person at its board wanting to get profitable project. Its optimal to do so if the benefit (new profit) outweight the opportunity cost (salary, bonus and increase performance that could have been achieve had a more capable person filled the slot).

But beware that a football field is a very competitive one. Having a weak player could bring down the whole team performance (ex:lower than fourth ranking in national league loose its UEFA broadcasting deal). High elasticity of ticket/merchandise sales to performance could hurt team profitability even more.

Of course in the end it depend on how big is the effect(an overrated economics question). There should be an optimal level of skill differential to profitability.

Could anyone tell me how good is Yao Ming in Houston Rocket (NBA) in term of skill and bringing new viewer?

Ujang said...

First of all, great blog!

This discussion reminded me of an article in Slate sometime ago, from which I quote: "...when you look at the business of professional sports—in both Europe and the United States—American sports are virtually all socialistic while the European soccer leagues more closely resemble the entrepreneurial capitalism we Americans fetishize...." ( full article ).

The length to which the US pro-sports try to level the playing field is bordering on ridiculous.

On the other hand, UEFA is trying to rollback the Bosman ruling by forcing clubs to have a minimum number of homegrown players, possibly violating some parts of the EU treaty.

Btw, I don't really agree with Milanovic's proposal about migrants having to spend one year out five in their own countries.

PS: Italy just beat the crap out of Germany. What a great day!