Y = C + I + G + (M-X)
The equation above is fundamental and in macro economics it is the first thing that fresh faced (or not so much after freshers week) Economics undergraduates learn in a Macro Module. It is a wonderfully simple and elegant equation and is at the heart of understanding how the sum of the individuals of a country make up its whole. Put simply, it says that the national income of the economy is made up of consumption, investment, government spending and net imports. National income is the measure more commonly known as GDP, the figure that is quoted in the financial times and news outlets. When we hear that the economy has grown 1% it is referring to the fact that GDP has increased by 1%. But you aren’t here for an economic lecture nor have you paid £9,000 a year for the pleasure of being bored to sleep, so where am I going with this?
Well GDP is measuring everyone and everything in the economy, when you buy that coffee in Pret or a pint down the pub you are consuming and therefore contributing to the GDP of the economy. When you and your family go to the cinema as many are doing in the summer holidays (well there isn’t any football to go to) you are all contributing to the GDP of the economy. And on August 12th everyone that attends the first match of the season will… you know where I’m going with this. Add into this all the investment that occurs in the economy and the amount of money the government will spend every year and don’t forget the net imports to the country and you get an good barometer ope how ‘rich’ the country is. The USA is, unsurprisingly the richest country in the world with a GDP $18.6 trillion. However they do have a population of 320 million, so per capita its not that impressive.
Lets look at the countries at the bottom of the list and its Tuvalu with a GDP of $34 million then its a huge jump to Kiribati $167million, Mashall Islands at $183million and then Palau at $293 million. these are countries with very small populations but they are into the tens of thousands. This is in effect how much these countries are worth. But last week one person, not a small country with a population of 17,000 was valued higher then any of these countries. What did this person do to be worth as much? He uses his feet to kick a spherical piece of plastic and rubber filled with air, whilst adhering to rules set by a governing body with 21 other people for 90 minutes a week for 9 months of the year. I’m of course talking about Robert Snodgrass. No that doesn’t sound right. *checks Sky Sports News*. Neymar! Thats his name Neymar.
Bought by the state funded PSG in France from Barcelona for £200million the talented and successful forward Neymar has become the most expensive player of all time making the second most expensive Paul Pogba look like a bargain at £89million. Football is no longer in the atmosphere it has been blasted off into space. They may as well play with aliens but even they would baulk at the amount that has been paid FOR ONE PERSON.
This is terrible. Its nonsense. Too much money. Something has to be done. How can he be worth that much.
Well my friends he is worth every single penny of that money. Not because of his talents on the football field but because of two reasons:
Football is a global game and is becoming even more global in emerging markets
Television companies have been competing for lucrative contracts and this competition has meant that the price has been forced up.
But we are the ones watching, we are the ones who pay the subscriptions and we are the ones that pay the money to see our teams in more expensive seats in bigger stadiums. We are the ones who buy the kits, bet on matches and follow the team on social media.
Football is in a bubble market at the moment, wealth breads wealth. the wealth has been pumped in from a number of veins all funded by the fans. The bubble will eventually burst I am sure of this, but for the time being with more and more fans falling in love with the beautiful games, we spend money on those we love prices will continue to rise for a number of years yet. Don’t like it? Thats capitalism.