Markets misprice: fact.
Just look at the fact that some enormously overpaid footballers have been humiliated over the last couple of weeks by a succession of teams staffed by people who are paid less.
Congratulations to all England’s opponents for pointing this fact out so graphically.
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all the hahas
yes those drains too
of course we live in an free market capitalist society. Just ask Guernsey.
Okay 1) of course markets misprice; in this case due to imperfect information. This doesn’t mean it would be better if some guy in an office set the prices for us. 2) This isn’t necessarily a case of mispricing. Teams make their money from attendance. A mediocre player with a famous reputation is better, a bigger draw, worth more than a super talented complete unknown.
The whole sorry charade of English football is a massive indictment of so-called free market capitalism.
We’ve piddled some £3-4bn away on a league which was supposed to strengthen the English national team, but which – 20 years on — has only lined the pockets of Maserati Garages the length and breadth of the country instead.
A classic example of what happens when capital trumps regulation. The rich get richer and the rest wither on the vine.
And now we have a government in thrall to these endlessly failing ideas.
@BenM
Teams do not make their money from attendance – television pays most of it
As usual, a right winder denying who he is by giving a false email address who knows nothing of the facts
You will be banned as a result if you try again
RM
I hope it was the wrong target you were at
As for email idendity, I have no reason to hide now, as long as I don’t mention my former South African based ex employees who have been involved in more than one part of a series of nefarious multinational activities, so next time i shall be under my own name.
As Mr Murphy says; we say what we say, we believe what we believe. There is no pretence. It is too important on a blog whose owner is more influential than the right-wing nutters that try to disrupt it, to come clean.
This comment has been deleted. It failed the moderation policy noted here. http://www.taxresearch.org.uk/Blog/comments/. The editor’s decision on this matter is final.
Yes.. they do mis-price.. this is totally immoral.
uk.reuters.com/article/idUKTRE65Q2VE20100627?feedType=RSS&feedName=domesticNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FUKDomesticNews+%28News+%2F+UK+%2F+Domestic+News%29
Osbourne suggesting he could cutting incapacity benefit.
I think football is a very good example of everything that has gone wrong with society. From the new Jabulani football – because we must have a new football every tournament to make sure that every commercial opportunity is exploited, to Sky sports – has the notion of television and sport being the opium of the masses ever been so explicit, to the ludicrous belief of the players that they are somehow special and deserving of their fortune.
But Duncan above does make a valid point – players are largely paid on their marketing value rather than their ability (the Kournikova effect). Which means they get surrounded by “advisors”/hangers on who tell them how wonderful they are all the time. My uncle was a professional player – my father turned down a professional contract because in the days of a maximum wage he could earn more as a carpenter.
I’m not saying we want to go back to that, but the markets have produced something that nobody wants (other than perhaps supporters of the big 4 English clubs). And FIFA are a shower to boot.
I agree that FIFA are an appalling unaccountable organisation who seem to resemble the pre-1989 Kremlin in their opacity. A great article in the Guardian about them which Sunder Katwala mentioned recently on Next Left:
http://www.guardian.co.uk/football/1999/apr/25/newsstory.sport5
Another explanation is provided by Tim Harford in the FT:
http://blogs.ft.com/undercover/2010/06/why-england-lose-2/
Hang on a sec..
The Prem is a market, where players are paid according to their percieved worth to the club in obtaining success. Thus, as it is one of the better leagues in the world, attracts the best players on huge wages from far and wide.
Playing for your country isn’t a market at all ~ you qualify by birth rather than tallent, e.g. even if you are not the best striker in the world, if you are the best in England, you get picked. Payments are minimal compared to club football.
How is this a demonstration that markets don’t work? Surely, it would only be the case if the purpose of the league was to provide players for the country, which it isn’t.
What have I missed?
If markets do misprice, I don’t believe this is evidence of it. Players are allocated to international teams on the basis of nationality, unlike club teams, where they are allocated by market forces.
If players at high paying, high performing clubs are unable to match that performance level in international teams, that would seem to indicate that market forces result in players being used far more effectively than if they are grouped together arbitrarily.
BenM: “A classic example of what happens when capital trumps regulation.”
If anything, I would say it is a triumph of labour over capital.
English football is a relatively high-revenue, low-profit business. The scope for the capitalist, in this case, the owner of the club, to make a profit is severely constrained by the fact that the people labouring in the business to create the majority of the value to the consumer, in this case the players, are getting such a high proportion of the revenue.
I find it odd that people who would generally describe themselves as on the left (not directed at you, BenM, as I don’t know how you would describe yourself) are so quick to criticise a situation where the vast majority of the return goes to labour and very little goes to capital.
@Paul Lockett
If you really think £100,000 a week is a return to labour you have a lot to learn Paul
98% of that is capital
These people are businesses
@Harry Haddock
That you are very sad?
Careful Richard, you are in danger of falling foul of your own comments policy by throwing insults around.
I think it was a perfectly valid point, and would have preferred an educated rebuttal rather than childish name calling, but your blog, your rules.
@Harry Haddock
No – that wasn’t name calling
I do think you’re sad if you really do think that way
It was a genuine expression of concern about your lack of comprehension of what it is to be human
If you misunderstood I rest my case
@Paul Lockett
Nonsense
Labour is not subject to transfer fees running to millions of pounds from which they do not by any means entirely benefit
The business is about the brand, not the labour
Brands are capital
@Richard Murphy and others
I am aware you are piling in with typical time wasting neoliberal pedantry on this issue
You add nothing to debate by doing so bar proving you have time to waste
As such I am closing this entry to further comment
And issue a polite warning that I am not inclined to ever post your nonsense – for precisely this reason
So please desist from time wasting again
I’m not a football fan (I much prefer motorsport, which FWIW provides a really nice example of markets working…), so I may be grasping the wrong end of the stick here. But, how many of the players who take home the large wages from British clubs, aren’t English and so aren’t eligible to play for England?
As others have said, we can’t use the world cup results in this way to say whether markets work, because national players aren’t picked from a free market. Instead we’d have to look at normal teams, where they can pick any player they want, and see whether the better teams spend more on players. Or look at the salaries of players in the national teams, and see how that correlates to success.
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