Budapest has done the sensible thing and withdrawn from the competition to host the 2024 Summer Olympics. Finally a refutation of the standard point about economists – that the more united their view on a subject the less attention anyone else pays to them. For the truth about the Olympics is that they are a potential financial disaster which no sensible person would wish to host or subsidise.
No, really, 85 per cent of surveyed economists think that subsidies to professional sports teams should cease – and Olympic athletes these days are professional. All that guff about the games causing job creation, economic development, urban renewal and all that, just guff. Even rugby stadia in New Zealand, the place which takes sport seriously, aren’t worth the outlay.
Back in 2004, the Athens games contributed to the entire country going bust. It only contributed, but even so. Now, not even a year after, and the Rio stadia are already rotting away. As for our own attempt, it was going to cost £2 billion at the outset (a figure arrived at by government deciding not to include charging itself for VAT in the calculations) and ended up somewhere north of £20 billion.
The numbers will never stack up. The future value of velodromes, rowing lakes, athletics tracks and diving pools is not up to the costs of creating them. These are, quite simply, a collective money pit.
The same goes for all those other arguments rattled out in defence of the games; they don’t add up. Certainly, there’s a burst of tourism from those desperate to come see the a runnin’an’ a jumpin’. But as London found out, that burst was neatly offset by all those people who would have liked to come to visit at that time – but didn’t because of the crowds. It was all rather Yogi Berra: no one goes there anymore because it’s too busy. He was right, in this instance.
To the economist, though, it’s the regeneration argument which is the most insane. Sure, various nasty areas in east London were spruced up, this happens in every Olympic location. But let’s look at the opportunity costs. The price of something is not what you spend upon it, nor is it the benefit you get from having spent it. It’s what you have given up in order to gain it. That’s the true price.
So, if we were to have spent £20 billion tidying up London, would we have got more of it tidied up if we hadn’t had to host a sporting bacchanal at the same time? Most assuredly, we would have got a lot more done for that money without all the interruption. So even though it might have been fun to see whiff whaff come home, it certainly wasn’t worth it.
That’s why I have only praise for the good sense of the Burghers of Budapest. The local establishment was all in favour of the games – after all, there would be billions raised in taxes to be spent and who wouldn’t love to be a part of that?
But those being taxed had a rather different view and started a petition to call for a referendum. On 17 Feb they handed that in with 40 per cent more signatures than were needed to set the process in motion. On the 22 of this month the bid organisers folded and withdrew, following Hamburg in 2015 and Rome in September. Now only Los Angeles and Paris are left in the race.
If only we had been able to do the same and phone Paris to see if they still wanted it before we blew £20 million large.
The truth is that if the lycra-clad superjocks want to have a jamboree that’s their right and privilege, of course it is. But there’s absolutely no reason why we should pay for it – we being the taxpayers of whichever urb is mad enough to agree upon hosting.
The Olympics: Just Say No.