My understanding is the broken window theory relates to destruction and rebuilding and not opportunity cost. I don't think building a new stadium is analogous to breaking a window.
> If we build a stadium, we necessarily do so instead of a hospital, school, houses,
Maybe as a global society this is true because of absolute capital allocation, but because people have the ability to allocate their own capital in the way that they would like to it's not a mutually exclusive endeavor. Further, building a new hospital, house, or school can be uneconomical and not necessary and also has the same issues you're highlighting. Building new housing for homeless people takes money away from special needs children etc... . It depends on the details and opportunities, so I'd disagree that this is necessarily true except in a specific example that we could analyze together.
> Money spent near the stadium in a bar isn't getting spend at some other business.
It’s fine, but it means that the revenue generating projections from sports teams are reflecting the amount of diverted entertainment spending, not net new money. And the frame is often the latter, which is both wrong and deceptive.
If teams presented their cases more truthfully - this stadium won’t make any more money than other options, but the people of this city like sports, so please subsidize the rich owners- I would have less of an issue.
(Said from San Diego, where this former chargers fan is ecstatic to see the city didn’t kowtow to the team’s demands for a new stadium. They are now in LA, and I get 16 Sundays per year back into my life. )
> It’s fine, but it means that the revenue generating projections from sports teams are reflecting the amount of diverted entertainment spending, not net new money. And the frame is often the latter, which is both wrong and deceptive.
Yea I mean they probably don't depict this in the best way possible, but undoubtedly it brings in tourists and other investment, at a minimum. But I think that this could also be used as an argument against, say, an airport because now people have easy access to travel to NYC, or Florida, or California and it diverts money spent from local entertainment to those cities/attractions/etc... Instead of spending money at MoMA in NYC why don't you spend it at the Columbus Art Museum? (I do say this to illustrate a point, but I actually agree we should spend money more locally).
I really wish we could get away from "XYZ rich owners" comments though because the government subsidies all sorts of people, rich or otherwise. Also it's not just the owners but the players too. They make millions upon millions of dollars. Intel coming to Columbus with tax breaks subsidizes the rich shareholders and CEO. The federal government maintaining a shipyard in New England subsidizes wealthy dock workers and the shipyard CEO. Roads? Same thing. Hospitals? Wealthy doctors. Wealthy defense contractors making bombs that our tax dollars are paying for to defend Ukraine from Russia. And you can play this game with any public investment or economic decision.
> But I think that this could also be used as an argument against, say, an airport because now people have easy access to travel to NYC, or Florida, or California and it diverts money spent from local entertainment to those cities/attractions/etc...
You're running away into pretty esoteric apples-Vs-oranges territory there. Compare local investments against other local investments, or if you're talking about a new communications hub, an airport against, say, a railway station. (Sheesh, didn't you even see how much like a cringe-worthy attempt at diversion that came across as?)
> I really wish we could get away from "XYZ rich owners" comments though because the government subsidies all sorts of people, rich or otherwise.
And I really wish we could get away from "Oh, those poor little rich owners" comments... The difference is that poor people need -- and (therefore), in many systems of ethics, "deserve" -- subsidies. Billionaires and gigacorps, not so much.
> And you can play this game with any public investment or economic decision.
I don’t think that it’s true of airports, for example. I am not an expert in this, and have mostly focused on the baseball side of things, but the work I have seen from neutral economists are pretty clear that these taxpayer dollars are not high RoI.
Your comment boils down to “all government spending on this list of items is equally inefficient, so why not build stadiums instead of airports.” I think that ignores the fact that airports are infrastructure, whereas sports are entertainment. Personally, I don’t think the govt should spend money on entertainment when the financial beneficiaries could easily cover the costs.
Also, in baseball, the owners are the last types of people I would support. They don’t even care all that much about the product on field - there is not a structural incentive to put a better product on the field. The comparison of billionaires to millionaires is also deceptive - that is a huge chasm, and players are being paid for producing value, using the income from their labor. Owners are paid because they have odd tax breaks (did you know they can depreciate their team purchase cost, despite team values consistently beating index returns?)
Lords of the realm is a great book to get insight into MLB owners.
> Your comment boils down to “all government spending on this list of items is equally inefficient, so why not build stadiums instead of airports.” I think that ignores the fact that airports are infrastructure, whereas sports are entertainment. Personally, I don’t think the govt should spend money on entertainment when the financial beneficiaries could easily cover the costs.
Sorry, but I don't agree with this characterization. In response to your comment about bars and that a new bar at a new stadium diverting spend from previous bars this would apply to other things like commercial air travel which diverts local money to far away places.
Also civilizations have had entertainment for as long as they have existed. We need entertainment and it's quite critical to social stability and well-being as far as I know.
"My understanding is the broken window theory relates to destruction and rebuilding and not opportunity cost."
https://en.wikipedia.org/wiki/Parable_of_the_broken_window
"The parable seeks to show how opportunity costs, as well as the law of unintended consequences..."
"I don't think building a new stadium is analogous to breaking a window."
It is, in the sense that building a stadium or repairing a window both require forgoing something else that could have been done instead.
"...it's not a mutually exclusive endeavor."
It is most certainly mutually exclusive. If I person is going to spend an hour building a stadium, they will not be creating anything else with that hour or engaging in valuable leisure time.
If we pay (or tell/force) people to build a stadium - regardless of who pays (the owner, the public, a Genie) those people will have to NOT do whatever else they might have done.
> If I person is going to spend an hour building a stadium, they will not be creating anything else with that hour or engaging in valuable leisure time.
This is just talking about opportunity cost then, not the Parable of the Broken Window.
> If we pay (or tell/force) people to build a stadium - regardless of who pays (the owner, the public, a Genie) those people will have to NOT do whatever else they might have done.
Yes, there are opportunity costs to the things we do. But this applies to anything, not just new stadiums. If you choose to buy a new computer or travel for a vacation or install a new toilet you could have been doing something else with that money. The key here is that in market economies (this is everybody, US, Norway, Japan, wherever) people are independent agents and can allocate their time and resources how they see fit.
> My understanding is the broken window theory relates to destruction and rebuilding and not opportunity cost. I don't think building a new stadium is analogous to breaking a window.
Both versions exist independently. AFAIK the one intended to illustrate the fallacy of "Anything that increases GDP must be good!" is the older, by far.
The reductio-ad-absurdum version is that the glazier putting his sons or apprentices up to going out and smashing windows must be a net benefit for society...
> If we build a stadium, we necessarily do so instead of a hospital, school, houses,
Maybe as a global society this is true because of absolute capital allocation, but because people have the ability to allocate their own capital in the way that they would like to it's not a mutually exclusive endeavor. Further, building a new hospital, house, or school can be uneconomical and not necessary and also has the same issues you're highlighting. Building new housing for homeless people takes money away from special needs children etc... . It depends on the details and opportunities, so I'd disagree that this is necessarily true except in a specific example that we could analyze together.
> Money spent near the stadium in a bar isn't getting spend at some other business.
Yea that's fine. Both economically and morally.