New Logical Fallacy

I'd like to propose a new logical fallacy which I would like to call the "Collective Field of Dreams Fallacy":  if the public doesn't build it, they won't come.  It's the fallacy invoked when the various supporters of public funding for stadiums/arenas come forth.  As a case in point, here's some stuff from the New York Times (registration required):

Mayor Michael R. Bloomberg recently provided a new reason for building a 75,000-seat stadium on the Far West Side of Manhattan - and it's not the Olympics, conventions, or professional football.

"Keep in mind that what this is about is jobs, jobs, jobs - and people need those jobs now," Mr. Bloomberg said the day the Metropolitan Transportation Authority voted to sell development rights to the Jets so that they can build a $2.2 billion home on the Hudson.

Mr. Bloomberg, like so many others, make the implicit claim that if the public doesn't build this stadium it won't get built and if so, then x jobs will no longer exist and/or will never exist.  But this is silly.  The main reason it is silly is because most of the spending associated with sports teams/sports events is spending redirected from other parts of the local area.  So, if income and jobs are created by spending on sports teams, income and jobs are destroyed by the redirection of spending from other areas.  In other words, if it doesn't get built, then they'll still come - they'll just come to different parts of the metro area.

Ross Fabricant, an economist for the State of Florida arguing against the notion that the Florida Marlins are a boon to local economies understands it:

County numbers crunchers insist the stadium will generate between $7 million and $8 million in sales tax annually, but Fabricant blasted claims that professional teams boost public coffers.

He suggested that the money consumers spend at new stadiums is money that would have been spent elsewhere.

He noted that some 40 economic studies conducted by independent researchers ''unambiguously and clearly'' agree: ``There is no net positive economic benefit from publicly supported professional sports teams and stadiums.''

Were stadiums good for the economy, Fabricant suggested, ``the Bronx and Detroit would be stellar examples of economic development. They're not.

The other part of the fallacy is to assume that if the stadium/arena isn't built with public funds, then it won't get built.  Why not? If private moneys aren't forthcoming, that could be a sign that the project just ain't all it's cracked up to be. 

The free rider problem may be at work to some extent, but most of the benefits generated by professional sports teams/events are somehow captured by the teams and the promoters of the events.  They capture these benefits, including civic pride, through the sale of tickets, parking, concessions, media rights, advertising, and merchandise sales.  Besides, as argued above, most spending on sports is redirected from other areas of a city.  Doesn't that spending generate spillovers as well?  In other words, the free rider problem is likely very minimal.

It might it also be the case that the public arena crowds out entrepreneurs who would build private arenas.  Wouldn't a privately funded arena/stadium be able to house crowds for games, concerts, conventions, etc.?  But it can be tough (not impossible) for a private entrepreneur to compete against a public monopoly or publicly-backed monopoly. 

So, in closing, I'd like to propose a new logical fallacy - the "Collective Field of Dreams Fallacy" - if the public doesn't build it, they won't come.

Comments

[John B. Chilton]

1. I must have slept through the announcement that the deal finally went through -- I was surprised to see today that the Washington Nationals won their first home game. Even more that they played in RFK. I remember seeing Frank Howard play there on Episcopalian night eons ago.

2. Dubai's philosophy is if you build it they will come. What's your view on that strategy in the context of a small remote country?

[Phil Miller]

They might come, but leakages tend to be larger in small areas.