English Talent Stifled?

During the coming term (subject to confirmation!) we'll be talking about the economics of sport in Contemporary Issues. One thing we'll think about is applying the economically appealing concept of competition into the context of sport.

Roy Hodgson has spoken directly into that arena today, bemoaning that English talent is being stifled because of lack of opportunity in the Premiership. I should make it clear - I'm a big fan of Hodgson and fully believe he was the right appointment back in the Spring. However, his talent lies in coaching, rather than analysing events through the lens of economics.

You'll hopefully recall the first and second theorems of welfare economics from econ101a last year - that a competitive outcome is Pareto optimal, and that a Pareto optimal outcome is also a competitive outcome. In laymans terms this says we can't do better than the competitive outcome. Restrict competition, and while you might benefit some, you'll have an overall net negative impact - you'll negatively affect others.

English players, forced to develop within the Premiership system, have about the best training imaginable - each week they play against (and alongside) the greatest players in the world (bar those that have left for Barcelona or Real Madrid). They aren't in squads because they are protected by rules telling teams how many players from particular types of countries they can field.

The most likely impact of this is that the English players that make it are of world class - the other likely consequence is that there are fewer of these players. So what Roy Hodgson faces, compared to, say, what Bobby Robson faced in the late 1980s, is a smaller pool of higher quality players. But Hodgson knows that the ones he can put in his team are familiar with playing against the best players in the world week in, week out.

Surely that's much better than having a large pool of mediocre players?

Rail Fares

Yesterday saw the announcement that rail fares are going up by 6.2% in January, which has naturally caused plenty of consternation, with Guardian blogs fuming about the social exclusion going on.  The same sentiment is declared on Liberal Conspiracy too, with another sentiment being expressed: Controlling train fares protects the consumer.

However, is that true? Is it really true that controlling prices protects customers? In Contemporary Issues we'll spend quite a bit of time looking at reasons why governments might intervene in various markets to do things like control prices.

If you think you agree with the sentiment that controlling prices protects customers, hopefully you'll be challenged about the bases on which you hold that view, while if you think it is much more complicated, the course will help you to articulate that sentiment better.

A view that controlling prices protects customers ignores the possibility that customers are affected by the quality of a good being produced, and also its quantity. The upward sloping supply curve we are all used to now tells us that if the price is held low, then the quantity supplied will be low - it's not worth firms providing.

The supply curve is just one analytical tool we'll make use of in the course, but hopefully your appetite has been whetted already...