ECONOMICS: Unless they are defended by the government, cartels always break down

Wednesday, October 4, 2017

https://www.garynorth.com/public/17188.cfm

The Economics of Assistant Coaches’ Bribery
Gary North – September 28, 2017

*** begin quote ***

There is a fundamental rule of economics: unless they are defended by the government, cartels always break down. They can be sustained only by government intervention. The government protects the cartels from members of the cartel who break the rules of the cartel in order to increase market share and thereby increase net income. The government makes cartel-busting a crime. In the case of the movie and also in the case of the latest scandals, net income is really what it is all about.

What we are seeing is the intervention of governments around the country to defend the NCAA’s cartel. If it were not for government intervention to keep coaches from paying full ticket for the valuable services of the best players, major universities would be forced to pay millions of dollars to these players, just as professional sports teams have to pay their players. A free market would prevail.

Top collegiate basketball coaches today are paid multimillion-dollar salaries. The head coaches don’t want to lose this income. In contrast, assistant coaches are not paid huge salaries. They are tempted to do under-the-table deals that are against the financial interests of the NCAA’s cartel. None of the coaches being accused of bribery is a head coach. No head coach is going to risk his $4 million annual salary for penny-ante payoffs to recruit top players.

If we had a free market in college education, there would be no legal restriction on the use of the word “college” or “university” imposed by any state on profit-seeking educational ventures. There would be no government money used to build sports stadiums. There would be open entry. Private college tuition would fall at all but the premier schools. College athletes in the top-ranked sports universities would be paid full ticket.

*** end quote ***

Ignoring for the moment that these alleged “bribery” charges may not — or should not be — considered  accurate, why do we have cartels in sports?

Why are the Taxpayers funding sports stadiums?

Why are the Team Owners (i.e., “State Universities”) allowed to keep “indentured servants” working (i.e., playing games) for them?

Argh!

We need to get the Gooferment out of all of there!

# – # – # – # – # 


%d bloggers like this: