A Little Disagreement With Deirdre

Deirdre Nansen McCloskey was one of our favorite people even before she became who she is now.  MWG was a grad student with a few toes in economics but more in accounting and The Rhetoric Of Economics really helped us understand the differences between the two disciplines.  Her insight into the significance of what she calls The Great Enrichment (Jonah Goldberg calls “The Miracle,”  we like Deirdre’s name) are priceless.  Deirdre is at work on NRO debunking the myth that Sweden is a socialist country.  Ian Burell is over at The Herd talking about the economics of soccer in How Football Raised Its Game.  It is a bit confusing because he calls soccer football and he is specific that he is discussing English soccer.

Sidebar: The English part of English soccer is not exactly right either.  England, Scotland, Wales, and Northern Ireland all have their own separate national teams but England and Wales are join together in professional soccer so Welch teams can play in the Premiership league.  Cardiff City did this year but was relegated.  End Sidebar

Deirdre takes those to task who use Sweden as an example of socialism starting right with her NRO title, Sweden Is Capitalist.  You must read it all but here is a taste of it:

If “socialism” means government ownership of the means of production, which is the classic definition, Sweden never qualified. When little Sweden’s economists were second in academic standing only to big Britain’s, in the early 20th century, they were “liberal” in the European sense: free-traders opposed to central planning and governmental ownership. None of Sweden’s manufacturing or extractive industries has ever been socialized, this in contrast, for example, to the experiment after 1946 in the world’s first innovative economy [that’s Britain], when the Labour party’s Clause IV nationalized the Bank of England, coal, inland transport, gas, steel, health services, and much else. Sweden never followed even the more modest example of America’s temporary nationalization of railways during the First World War. Sweden’s Systembolaget, the state liquor store, was sold off in 2008, as it has not yet been in all the U.S. Apoteket, the maddeningly inefficient Swedish-government drug-store monopoly, was privatized, too, praise the Lord.

We know Deirdre is right but we have a soft spot in our heart for the state liquor stores in New Hampshire.  Well, one in particular.  New Hampshire has made a few miles of I-89 a toll road so there is the New Hampshire State Liquor Store and Safety Rest Stop right on the highway.  It is a great way to speed you on your vacation.

Our disagreement with Deirdre comes from the last two words of this:

Like the Land of 10,000 Lakes [that’s Minnesota], Sweden is a place of private ownership and thrusting [that’s what it says] inventors, Swedish bachelor farmers and pretty generous social provision, pretty good schools (with vouchers) and terrible weather. [Emphasis added]

We would agree that Minnesota can get a little hot in the summer but Sweden sounds like a lovely place.  The southern part is close to perfect for us:

In Götaland, where you’ll find the cities Gothenburg and Malmö, winters are shorter and milder, while daytime summer temperatures normally range from 15 to 25 degrees Celsius.

Malmo is almost 56 degrees north (a little south of Juneau, Alaska) so the sun isn’t too intense.  It is as close to perfect as weather gets for us.

Ian is trying to generalize from soccer to all labor markets

Clearly there are costs to progress. Yet ultimately we should give thanks to the power of globalisation in transforming our national game, which has been revived by the free movement of labour and capital – and bear in mind the wider lessons for other parts of the economy as we cheer on these teams.

Another comparison of European countries and the US is that the teams in European soccer leagues have much more economic freedom than American teams.  European teams do not have restrictions like salary caps so the rich teams almost always win.  They also play in multiple competitions.  There are exceptions as Ajax almost broke through in the Champion’s League this year and Leicester City won the Premiership in 2015-16 but such events are rare.  More common is that Bayern Munich has won the Bundesliga the last six years and is poised to make it seven next week.  The poor teams are often fighting relegation.  Relegation means that the better teams from the lower leagues are promoted consistent with economic freedom.

Top soccer players and coaches, as Ian explains, are extraordinarily talented.  The players are also extraordinarily expensive costing teams (called transfer fees) as much as €222 million to buy their contract.  Ian’s argument supports restricted immigration for talented individuals rather than open borders.  That’s the wider lesson.

We have four lessons about Sweden and soccer.  First, capitalism makes countries and the individuals in them rich.  The same capitalism makes soccer great and soccer players rich.  Second, Sweden is both rich and capitalistic.  Both Deirdre and Heritage agree that Sweden and the US have about the same degree of economic freedom.  They both agree that there are differences but some are in one direction and some in the other.  Thirdly, the impact of importing extraordinarily talented soccer players might tell us to bring in similar folks in other lines of work but it does not suggest that we have open borders.   Lastly, weather preferences are personal.  The weather preferences for Deirdre and MWG don’t seem to match.

 

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