The UK Olympic Games of 2012 are shaping up nicely to be the expensive, possibly corrupt affair that many of us crusty cynics claimed it would be over a year ago. There is only the grimmest of satisfaction to be gained from having been proved so emphatically correct. Given the history of publicly-financed construction projects in recent years, or even projects in which public finance is only a part, the predictions should not have been difficult (think of the Scottish Parliament, or Wembley Stadium, or the Channel Tunnel, to take just three).
The likely bill – to the taxpayer – of these Games is likely to be far higher than originally projected. It is almost certain that this fact was known to British politicians and sports-establishment types who lobbied to hold the Games in Britain over a year ago. If a company had bid for a contract with the same degree of financial acumen, probity and sense as the idiots in the UK public sector, rather long gaol terms, fines or hefty compensation packages might now be the order of the day.
We are remembering the late, very great Milton Friedman a lot at the moment, digesting his contributions to the fields of technical economics, monetary theory, politics, education and much else. But I think that his often disarmingly simple statements about the role of the state and the dangers of government will endure the longest, if only because they carry truths from the start of human history:
There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you’re doing, and you try to get the most for your money.
Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost.
Then, I can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch!
Finally, I can spend somebody else?s money on somebody else. And if I spend somebody else’s money on somebody else, I?m not concerned about how much it is, and I’m not concerned about what I get. And that’s government. And that’s close to 40% of our national income.
(Via David Farrar’s blog)
I think the Olympic Games falls into the final category. I do agree with Stephen Pollard on the possibly sensible idea of cancelling the Games, even at this stage. The lead article in the Times (UK), by contrast, is remarkable for its breezy indifference to the cost of the Games and the fact that the money for it will be screwed out of the pockets of people who regard the whole spectacle as an expensive joke.
Oh, and before any commenters of a pro-state sympathy start to wonder, no, I am not a sport-hater. I enjoy watching football, cricket and other sports, and play one or two sports myself (not very well, I will admit). However, I do not expect my fellows to support my enthusiasms. Is it too much to ask the same of others?
Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost.
Surely it depends on who the somebody else is. When it’s my beloved one then the reverse is true. I am concerned about the content but likely to throw concern about the cost to the wind.
Regardless, the main point is taken. And yes, I’d like to see the plug pulled on the whole damned fiasco.
Apparently Ken is saying the event “will make a profit”. If he thinks that is the case, I would like to sell him my share now. I am completely happy for the margin he makes to go on newt-fancying or taxi-fares as he sees fit.
Guy, I doubt if Livingstone would buy any newts with your generously donated share if the profits. This is his idea of a prophet sharing scheme.
Why can’t the Olympics be staged by some private enterpreneurs ? It is a show, it is entertainment, I like it.
But why is government involved ? Is it it’s legitimate role to supply circuses for the masses ? Is there some “free market failure” involved ? Or do politicians just enjoy spending our money for their own fun ?
Jonathan, I entirely agree with your comments on the Times article. ‘Breezy indifference’ is indeed the order of the day. But notice how neatly the writer manages to poison the well at the same time:
‘The idea of London’s residents being “bankrupted” by the 2012 Olympics is a grotesque exaggeration perpetuated by killjoys who relish misery and cherish pessimism.’
Well done! I never knew what was wrong with me, but apparently I’m a killjoy – one who happens to prefer opera and theatre to sports. And, horror of horrors, I don’t even mind paying the full price for my own ticket. I hope Milton is in a better place, perhaps some kind of Libertarian paradise where all the figures add up 😉
I think it is worth noticing how now they refer to the ‘London Olympics’ and thus it is not ‘fair’ for anyone else to contribute to it, apart from Tessa Jowell’s secretive raiding of the Lottery Fund cookie jar to shore up her department’s fiscal shortcomings. So far the Great Socialist People’s Games of 2012 are estimated at 38p per week for every man, woman and child in the Greater London area, based on the original £2.375bn estimates, so I fully expect them, following the Montreal fiasco model (cost increase by at least three-fold), to have achieved at least £1.44 a week charge by the time we approach the opening of the games. Of course Kongestion Ken will be able to proudly say he has made a profit from the games – like all true socialists he will only see the profit from the games and not any of the costs involved in creating them.
I often feel that people never pay attention to one of Lady Thatcher’s more famous quotes, aimed at the imbecilic Kinnock at the the time, that,
The day London won the games, I congratulated the French. It was indeed a glorious day for Paris. Paris would not be lumbered with this grotesque spectable of drugged up freaks. Its finances had been saved. Its citizens could go about their daily lives without the burden of the olympic gravy train.
In a few years, Londoners will be looking across the channel away from their dirty, crime-ridden bankrupt city, in envy at a bright shiny clean Paris its coffers flush with cash that it didn’t piss away on spectacle.
The olympics are truly, truly horrible. There are two things that can be done with it (other than banning it outright).
1) Privatise it and let a proper business run it as someone suggested in one of the posts; and/or
2)Always have it in one single location. Some people say this location should be in Greece. But I wouldn’t wish it on the poor Greeks. There is a far better location, a location that is built on the same philosphical building blocks as the olympics, a location where there are synergies between its existing industries and the olympic circus, a location whose raison d’etre align entirely with that of the olympics. This location is Las Vegas.
There are businesses in Las Vegas which would know what to do with the olympics. There is the accomodation capacity in Las Vegas. There is plenty of ancillary entertainment in Las Vegas.
Yes, viva the olympics, viva las Vegas. Viva, especially, the olympics only in Las Vegas.
Paul,
Yeah, my first thought was that the French were the real winners.
Why do the Olympics happen at all? Hardly anyone seems interested in them. Why don’t the competitors organise them and charge admission to recoup costs? I see no reason why anyone else should be involved.
Roll up, roll up, you Olympics Lovers, and explain to me how much money YOU PERSONALLY will pay to have the games in London.
Write the cheques out now, and send them to the organisers, and GET YOUR THIEVING HANDS OUT OF MY POCKET.
Let’s have a sweep on how much is raised in this way. My guess: Five Quid.
Would the French take them off London’s hands? Or Madrid? They can’t really cancel, I suppose. the loss of face would be too much for the pollies to bear.
London Olympics 2012 PLC shuld be floated on the LSE right away. It should be sold a license (£1 billion?) to run the games and after that, be entirely on its own, including purchasing land, etc. The cost of policing and extra transportation facilities should be charged to the new company.
If it can’t raise the capital, keep to budget or schedule, or make a profit, that would be entirely its own problem. If enough takers can’t be found for this venture, the government should inform the International Olympic Committee that sorry, we are withdrawing the London offer due to lack of interest or support.
A vote-winning, truly Conservative policy for Windmill Dave to adopt? Naw, I didn’t suppose there was any chance of him doing anything like that. But he should. He really should. I would not normally go along with Will Self, but he has said this on the Olympics:
“If you were a conspiracy theorist, you might think the Government was hoping to pass on to its successors a humungous millstone of a white elephant that positively dwarfs the Tories’ piddling little Millennium Dome.”
I vented on this issue after I saw Linford Christie on Daily Politics pontificating in the most noxious way possible.
One thing to ponder. Doe anyone know how many of those that are on the Olympic ra-ra squad actually live in London? I am pleased to no longer own an abode in London so that I don’t have to pay the athletes tax to pay for the waste of time, money, effort and space that is the Olympiad.
I too congratulated the French for losing the Olympics.
The pro-Olympics types keep saying that it is “good for London”… I challenge any of them to tell us exactly why its good for London (not just one bit that has already had lots spent on it to no avail).
Funny how few (well, none) of the London ’12 boosters in the relevant Samizdata threads from last year are here defending their pet project now. They all said it would pay for itself, explaining at length how it’s a terribly cleverly devised concept, etc etc etc. Hah. I hope they all feel jolly silly.
As has been explained by the poster and by the commenters above, the games will be vastly expensive.
The whole thing will be part of the great warning against statism that Britain will be by 2012 (and, in part, already is).
I suspect that this will be the last great function that Britain will serve. A warning to the world that “modern”, “progressive”, “public-private partnership” statism does not work.
Britain shows already (and will show even more by 2012) that more government spending, more taxes, an expanding credit money bubble (go up at a 14% rate the last time I looked) and endless new regulations do not work.
By 2012 the P.F.I.s and the rest of the public-private parternships will be openly a total mess as well.
It’s not just London. In the US, most major cities have a pro baseball, football, hockey, or basketball team. Some have all four.
Here in Denver, the stadiums (stadia?) are all tax-financed. A special taxing district was created solely to fund stadiums for four supposedly-private companies. I don’t think we got the 2010 Winter Olympics here in Colorado. At least, I hope not, for exactly the reasons above. Kinda like hoping that we didn’t get the 2008 Democratic convention, as more Jackasses is the last thing that this state needs.
I recently attended a session on statistical methodologies. One methodology discussed was the “How much would you pay for x?” model, used for environmental nonsense and such like. We were told that this was the methodology used to gauge support in London and the UK for hosting the Olympics.
The sample size? Roughly 600 people in London and 200 outside of London. A clear scientific basis for the assertions of “overwhelming support” we’ve been treated to.
Or as SWMBO said “12 billion?! When it started it was a bunch of Greeks running around on a rock!”
I am sticking to my original estimate that the TOTAL cost of the games will be in the region of £40billion.
This includes the cost of security, all the freebies for hangers on and athletes, fruitless pursuit of gold for British participants though massive injections of cash into ‘training’ – but it will have been great experience for them, the cost of cleaning up the site, the provision of infrastructure for water/electricity/transport/sewage, political interference (think Wembley/Dome) but most of all it includes the cost of having to do things in ever diminishing deadlines.
The transport etc. infrastructure projects are typically 15 year projects normally – they are going to try and do them in 5 (some involving the stadiums will need to be done in about 3). A fivefold increase in nominal cost for this kind of timescale is conservative if such a compression in timescale is even possible.
There is the project management adage “time, cost, quality – pick two”. Time is no longer a variable and is diminishing rapidly, quality can only suffer a little which means cost will go out of control.
The Times reported a while back that the Beijing Olympics are estimated to cost in excess of $40billion US. Labour and other costs are far higher in the UK and factoring in wage inflation and blackmail as deadlines approach I arrive at an estimate of £40 billion.
It won’t all be lottery money or council tax – there will be tax hikes and stealth taxes but also fares will rise excessively, water will keep on having huge rises in bills as will electricity and the police precept will suffer large rises as well.
And what will the majority of the British people get for this. White elephants and broken promises of regeneration and jobs and failing infrastructure elsewhere as resources are diverted for this monumental folly.
My kinsman Clive supported the games on the grounds that they would increase London property prices (he owns a flat in the East End of London). I thought that the “London games” were a daft idea – but after reading this thread (especially qaqwex’s comment) it is clear that they are mistake on a huge scale.
Now whilst the general taxpayer will be hit (both openly by higher taxes and by the hidden tax rise of the lottery being used to help fund the game – thus meaning that taxes “have to” go up to fund things that the lottery would have funded if it had not been for the games) it is clear that the people who live in London will be hit worst of all – their council taxes will go through the roof (and the money Red Ken and the G.L. A. take from the boroughs of London was already out of control anyway).
The games are clearly yet another bit of evidence that the only function Britain will serve in the future is to act as a terrible warning of the folly of statism.
My kinsman Clive supported the games on the grounds that they would increase London property prices (he owns a flat in the East End of London). I thought that the “London games” were a daft idea – but after reading this thread (especially qaqwex’s comment) it is clear that they are mistake on a huge scale.
Now whilst the general taxpayer will be hit (both openly by higher taxes and by the hidden tax rise of the lottery being used to help fund the game – thus meaning that taxes “have to” go up to fund things that the lottery would have funded if it had not been for the games) it is clear that the people who live in London will be hit worst of all – their council taxes will go through the roof (and the money Red Ken and the G.L. A. take from the boroughs of London was already out of control anyway).
The games are clearly yet another bit of evidence that the only function Britain will serve in the future is to act as a terrible warning of the folly of statism.
My kinsman Clive supported the games on the grounds that they would increase London property prices (he owns a flat in the East End of London). I thought that the “London games” were a daft idea – but after reading this thread (especially qaqwex’s comment) it is clear that they are mistake on a huge scale.
Now whilst the general taxpayer will be hit (both openly by higher taxes and by the hidden tax rise of the lottery being used to help fund the game – thus meaning that taxes “have to” go up to fund things that the lottery would have funded if it had not been for the games) it is clear that the people who live in London will be hit worst of all – their council taxes will go through the roof (and the money Red Ken and the G.L. A. take from the boroughs of London was already out of control anyway).
The games are clearly yet another bit of evidence that the only function Britain will serve in the future is to act as a terrible warning of the folly of statism.
Well that was an odd computer thing.
Love this concept!
Property maintenance London