Crony Capitalism, Big Government, and TSA Security Ruin the Olympic Games


I have to admit that I have rarely taken much interest in the Olympic Games. It has nothing to do with the athletes or the events; they work, scrape, and toil for four years (the amateurs at least) for a chance to compete against the best in the world. The Olympics have become increasingly politicized, morphing it into a hyper-nationalist bread-and-circus media event that ignores and overlooks the heart of what the Olympics are supposed to be about. Just like the state should be separated from religion, our personal habits, and our economic decisions, the Olympics would be a far better event without government involvement.

In order to host and put on such a massive event, there are huge costs born by taxpayers that unsurprisingly run massively over budget. Despite being sold as a way to stimulate a city or a country's economy and as eventual sites for schools and other public services, hosting the Olympics usually leaves local governments even more broke than they were before and the remnants turned into ghost towns.

French economist Frederic Bastiat's famous broken window fallacy helps explain why. Wealth that is taken by the government is spent without the benefit of a price/loss mechanism and thus that money is terribly misallocated while ignoring how that money could have been spent voluntarily in the marketplace. As Barry Lyndon explains in a recent PolicyMic article, the top-heavy structure of the Olympics can only exist with a government backstop. It is a giant exercise in crony capitalism. The Olympics as they are constructed now wouldn't exist in a market; there is just too much liability.

State subsidies provide a backstop and a distortion of how insurance and security are supposed to work. Because of this, cities that host the Olympics churn out a security theatre that George Orwell could have never dreamed of. Fortress London is "the biggest peacetime security operation in Britain's history, " with over 20,000 U.K. troops, police, and civilian contractors policed the opening ceremonies alone. Over 4 million CCTV cameras are used to monitor the public at the games. The CIA and the FBI have provided advanced spying software, and even the TSA is going international as it feels up passengers at Heathrow Airport in London. Fear mongering over possible terrorist attacks, like using poison mini-drones hid in backpacks and "blended attacks" are claimed to justify the security. It's enough to make the skin crawl.

And besides all of the security, there is the flag-waving nationalism, tooth-combed analysis of what politicians and pundits have to say about the event, and accusations hurled back-and-forth across the world about why this or that country's domestic and/or foreign politics are supposedly unsuitable for the games.

So just like any government subsidized "service" or event, the Olympics should be privatized. Not in the corporatist way in which a government's monopoly control is transferred to or contracted out to a private agency, but an event funded and supported voluntarily. Private and public benefits with private liability, insurance, and security.

It is impossible to tell exactly what a non-subsidized, free market Olympics would like, there are few things the International Olympic Committee (IOC) could do, as well as historical examples, that suggest it would be a far better event without government intervention. First of all, the IOC could end the silly practice of athletes "representing" certain countries. In the early days of the Olympics, there existed "mixed teams" of athletes from many different countries organizing to compete. When the U.S. boycotted the 1980 Olympics and prevented hundreds of athletes from competing in an event they trained years for, athletes from Australia, Denmark, Puerto Rico, and Andorra flew the neutral Olympic, not a government, flag. Besides, many athletes don't even live and train in the countries they are supposed to represent anyway.

This would do a lot to combat the current hyper-nationalism of the Olympics where governments politicize and nudge their way into the event in order to make sure their arbitrary tax jurisdiction is honored with flags, songs, interviews with heads of state, and media coverage. It's gotten so bad, even Mitt Romney's visit to London and a Greek triple jumper's tweets get more attention than say, a blind South Korean archer who just broke a world record.

Whether it's creating bubbles and stifling economic freedom to violating our basic civil liberties while waging costly wars, governments have a knack for politicizing, waste, and self-aggrandizement at the expense of private citizens (or athletes). For the sake of the integrity of the Olympics, amateur athletes, and genuine athletic competition, governments should just mind their own business.