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Touchdown for Freedom
Following Fantasy Football’s Free-Market Model Provides Clues for U.S. Economic Growth
As fantasy football fans across the country take their positions in front of TVs each Sunday —checking Rotoworld—every fifteen minutes for player updates—let’s take a minute to consider how the U.S. economy would function if the rules were more like those of many fantasy football leagues.
In some ways, fantasy football offers good examples of the free-market system: More times than not, the rules of the game don’t change and are the same for everyone, and competition leads to better teams and more exciting match-ups.
In most fantasy football leagues, the rules of the game are determined before each season and do not change. This knowledge and certainty allows team owners to implement a strategy for the season that they believe will be most successful. For example, knowing how many points per touchdown are awarded or whether the league awards points for receptions is critical in selecting players for a winning team.
Imagine if there was a fantasy football league in which, mid-season, the commissioner decides to make touchdowns by quarterbacks worth 18 points instead of the original 6 because the commissioner has the best quarterback in the league. Subsequently, his team would have an advantage over teams that have less talented quarterbacks. Because the other teams chose their players based on rules at the start of the season, they would now be at a disadvantage because the rules changed to give one team a leg-up.
In the same way, changing rules and regulations for businesses affect their successes. As we noted in a recent Economic Freedom Stories video, uncertainty about the rising cost of healthcare is affecting small business owner Jim Garland’s ability to hire for his expanding business. Garland’s jet cleaning company, Sharp Details, negotiates contracts with clients two to three years in advance. However, since Garland is unable to estimate the cost of health care per employee in 2014 when the Affordable Care Act (ACA) will be in full effect, it is extremely difficult for Jim to determine how much each worker will end up of costing him to employ, and to make hiring decisions.
The rules in most fantasy football leagues are not only stable, but they also apply to everyone equally— no one owner has an unfair advantage. Again, let’s consider what the league would look like if the commissioner reserved the top quarterbacks like Drew Brees, Tom Brady and Aaron Rodgers for his friends to select in the draft, and left less impressive quarterbacks for other team owners.
The league wouldn’t be very fair or competitive if the commissioner gave a select group (his friends) the advantage of selecting the best players in exchange for some kind of gift, bribe or other preferential treatment. For example, perhaps the commissioner’s friends invite him to watch the games every Sunday at an exclusive party with bottomless Buffalo wings, mozzarella sticks and beer as long as the commissioner gives them the best players. The commissioner knows that his invite to these VIP viewings depends on the favors he grants his friends. Teams that were given the advantage during the draft would dominate and the overall quality of fantasy football would decline. Some teams would also likely drop out the following year.
This is an example of cronyism—when a fantasy owner (business) colludes with the commissioner (government official) to bend the rules—and it happens all too often in the U.S. For example, the playing field for fuel efficient cars has been slanted in favor of General Motors’ Chevy Volt.
In an effort to increase demand for fuel efficient cars, the federal government offers a $7,500 tax credit to those who purchase a Volt, and between $50,000 and $250,000 in incentives and taxpayer dollars to offset the cost to produce the Volt. Giving GM these benefits puts the company at an unfair advantage over other companies trying to compete such as Toyota which makes the Prius C. The Prius C is not eligible for a federal tax credit, grants or subsidies.
While many look to economists and politicians to fix our economic problems, maybe we should take a few lessons from some of the fantasy football leagues instead.