The Olympics is always an enjoyable diversion from the spectacle of professional sports (football, baseball, basketball, tennis, golf, etc.) and a chance to witness the amazing feats of athletes in non-traditional games such as gymnastics, swimming, diving, dancing, rowing, fencing, horse-back riding, shooting, and especially track & field (my favorite).
But the Olympics is also a lesson in the great debate on the best way to run an international event. Which is the best formula for success? A government-oriented, centrally planned model or a free enterprise, decentralized model?
Like many Americans, I watched the country rankings with keen anticipation to see which nation was leading in the medals count at the end of the day. Who would win the Olympics this year, state-run China or the privately-run USA?
Prior to the collapse of the Soviet Union, the Communists beat the Free World almost every Olympics, supporting the old threat by Khrushchev in the 1960s that ???we will bury you.??? They devoted an inordinate amount of human and capital resources to achieve their goal. But after 1992, the USA regained its status as the world???s most dominate country in the Olympics.
In the 2008 Olympics in Beijing, Communist China pulled out all the stops and earned the most gold medals. But the US won in total medals.
This time around, after a week of games, China had a slight lead over the US in gold and total medals count. But by the end of the games, there was no contest. The United States won 46 gold medals vs. 38 for China, and in overall medals count, the US garnered 104 vs. 87 for China.
And don???t forget that many foreigners who won medals trained in the United States. UK???s Mo Farah comes to mind. He and American Galen Rupp trained in Portland at the private Nike Oregon Project under coach Alberto Salazar. Farah won the gold medal in both the 5,000 and 10,000 meter races, and Rupp took silver in the 10,000 behind Farah.
Unlike other national Olympic committees, the United States Olympic Committee is a non-profit organization, wholly dependent on private contributions and corporate sponsorship.
That???s not to say that the US is completely private in its Olympic efforts. Many athletes train at state-run universities and public high schools, which receive lots of government funding.
And don???t forget Title IX legislation, which may in part be responsible for so many female athletes winning medals this year (two-thirds of the U.S. golds were won by women). Of course, Title IX also had unintended consequences. One could argue that US men did worse because Title IX forced many men’s sports programs to be discontinued in order to meet the required “equality.???
Still, there???s a lot of private sector involvement in athletic prowess on the college level. For example, college football (largely funded by private means such as TV contracts and ticket sales) is one big reason why our athletes are so successful. It brings in almost all the revenue for collegiate sports programs.
All in all, there is much more of a do-it-yourself approach to the U.S. And it’s far better for the athletes themselves. One Chinese athlete I read about had only been home 17 days since 1996.
The US has provided real leadership when it comes to financing the Olympics, starting with the 1984 Olympics in Los Angeles, the first to be funded entirely by private sponsorships and contracts. The London Olympics could have also learned a thing or two from the US when it comes to ticket sales for the Olympics. In the US, we???ve largely solved the scalper problem with the creation of standardized private secondary markets via Stubhub and Ticketmaster. Meanwhile, in London, the British adopted the old Medieval approach by making scalping illegal. The bobbies cracked down on scalpers and even jailed individuals who tried to sell (or even buy) tickets. No wonder many events had empty seats.
America???s melting pot of citizen athletes boiled over in the Olympics for everyone to see. A diversified, open-to-all, laissez-faire policy works wonders and sends a message loud and clear to the world: Democratic capitalism works!
Mark Skousen was recently named one of the top 20 most influential living economists (www.superscholar.org). Since 1980, he is the editor of the award-winning investment newsletter, Forecasts & Strategies (www.markskousen.com). He is also the producer of FreedomFest, the world’s largest gathering of free minds (www.freedomfest.com).