Beckenbauer’s Lack of Economics

Franz Beckenbauer never usually gives up an opportunity to voice some kind of anti-English comment.  It’ll be fun if England end up paired with Germany in the last 16.  He’s said recently that England still play kick-and-rush (a big insult in this day and age), and they suffer due to there being too many foreigners playing in the Premiership, England’s top division of football.

Standard economics argues strongly against Beckenbauer’s second point: That there are too many foreigners in the Premiership.  Put simply, Beckenbauer is arguing we should restrict places in Premiership teams on the basis of nationality.  It’s a restriction on trade.  From Ricardo’s Comparative Advantage theory onwards economists have always argued in favour of free trade.  Mainly on the notion of comparative advantage: By letting the country comparatively more efficient at producing one good to produce it, we can produce what we are comparatively more efficient at and overall output and hence income is greater for everyone.  The pie is enlarged.

Equivalently there is the incentives that protecting trade and particular industries creates for participants.  A bit like with banks, if firms know that they will be protected if things go belly up, they will take more risks: Heads I win, tails the taxpayer loses.  Firms that know they will be bailed out will operate in a non-optimal manner.

The same goes for footballers.  If places in Premiership teams are restricted on the basis of nationality, then English players are protected.  There is no incentive for them to get any better because they don’t need to in order to retain their place.  Hence the competition fostered by allowing English teams to buy from wherever they want means that the best English players must keep improving to ensure their place in their club team is maintained.  And of course, those players that are playing (by merit, not because of protection), are being tested against the best players in the world, and hence they are of world class, if they retain their place.

Stefan Szymanski and Simon Kuper in Soccernomics even go as far as to suggest there are too many English players in the Premiership.  Thankfully the 6+5 rule was abandoned by FIFA recently, for this precise point.  England is benefitting from the intense competition that takes place in its own league.