Before I get into the habit of posting about specific current events, I want to elaborate on a theory that consistently appears in my mind when reading about the economic turmoil of the last few months and years. It has less to do with the austerity versus stimulus debate, the evils of inflation, or how to save the sinking eurozone, and more to do with the proper role of government in the modern economy. All other economic concerns stem from this fundamental question of the appropriate level of interference by the government in our free-market capitalist system. If we know what level of assistance or constriction by the state is acceptable and/or desirable, answers to the problems like those mentioned about become much clearer. Fundamental questions are best answered by fundamental responses. As Leonardo da Vinci said, “Simplicity is the ultimate sophistication”.
In this era of irrevocably intertwined markets, instantaneous worldwide communication, and the looming specter of mass destruction by any number of advanced weapons systems, what is simpler than sports? Of course, many people would argue that sports are a complex world of indecipherable statistics and unrefined fanaticism, but there is also a level of stability and purity that is present in these games that most other aspects of human life don’t have. The rules are often set in stone, with tinkering at the margins accounting for most of the changes. In the realm of professional team sports, the teams competing against each other rarely reorganize, and while the players comprising those teams seem to create a constant whirlwind of trades and signings, these actions are accomplished under a specifically defined and (mostly) clear set of protocols. Furthermore, it is the hallmark of championship teams to avoid a high rate of player turnover, meaning that in the sporting world, there is a premium on consistency.
But I digress. The point of all this is that the search for a simple model of economic activity and the optimal relationship between the public and private spheres can be found in the elementary nature of sports, which is a conclusion I have consistently been led to over the last few months. I choose to use basketball as the medium of the metaphor, but practically any team sport can be used to the same effect. The ultimate goal of a basketball game is to score more points than your opponent. Points are simply a measure of team productivity. The idea is to outperform the other squad by means of any number of strategies within the context of the previously established rules. In the same manner, the goal of any national economy is to increase productivity, leading to more sales, and more wealth for all members of that economy. Sports and business alike naturally favor participants that have more inherent talent and competitive drive, but both arenas also demand that rules be put in place to provide a fair result. And why does fairness matter in either basketball or the economy? Because neither are ultimately about the participants and their desire to crush the opposition. They are about the observers–the fans and the consumers, none of which want to be party to a predetermined, prejudiced, or otherwise discreditable contest. To elaborate, over the next week I will place a more in-depth focus on three of the main entities involved in basketball at any given time: the players, the referees (or the league as a whole), and the fans. The general hypothesis will remain the same as above, but there are many more points of intersection between the idealized form of sport and a suitable model of economics within each of these individual metaphors. It is my hope that when this task is complete, more of us can base our economic philosophies on the same premises rather than arguing from completely different metaphysical standpoints.