The World Cup, the last refuge of the patriot (and the economist)

In less than a week we will be immersed in a new soccer world cup. Great excitement is coming. According to Branko Milanovic, the world cup is one of the big winners from globalization. Because now the best players in all countries play in the best leagues (but they return to play for their countries in the world cup), all national teams benefit from increased player mobility: the best players from any country compete at the highest level all year long and learn from the best directly. The result is more uncertainty in competitions between national teams, as opposed to much more concentration of talent in team competitions. If you look at the most recent editions of the world cup, it is true that from the round of sixteen to the final, most games finish with a very narrow score, in many cases ending with extra time or with a penalty shoot-out. The last final was decided at the extra time in 2010 and in the 2006 edition Italy won in a penalty shoot-out. That is why it is very difficult to predict who will be the winner. Brazil has the home field advantage, and Spain has enormous talent. True, they are older now, but there are more players now that play in non-Spanish leagues; that is, Spanish players are more open than ever to the forces of globalization: economists should like this. And there are many other teams that can be a surprise winner. Besides sports, at the world cup we will see flags and painted faces, people feeling identified with national symbols that have increasingly little meaning outside the football pitch. Someone said that patriotism is the last refuge of the scoundrel, and the world cup is one of the last refuges of the patriot’s gregariousness. It is also one of the last refuges of the economists, who find their theories of increasingly little application out of the pitch, but who spend an increasing amount of time and resources (myself included) thinking about the beatiful game. Look at today’s front page in The Economist or at the recent report by Goldman Sachs. Our excuse is that many important issues, such as corruption, rationality, team incentives and many others, have a very transparent laboratory in the soccer industry (in and out of the pitch).