Fraser Forum

Ban golf and the economy would get along just fine

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Don’t get me wrong. I love golf. I came to the game late but, as my spouse will tell you (with a sigh), I’m trying hard to make up for lost time. As I write, it’s minus 15 Celsius in Montreal with a bitter north wind that makes it feel like minus 26. But I’m thinking that if my personal opening day this year is the same as it was last year (May 4th), there are only 99 more days to wait. It’s always great to break 100, isn’t it?

Golf Channel stories this week from the humongous PGA Merchandise Show currently underway in Orlando, Florida (temperature right now: 14 degrees Celsius, feels like 12) only serve to quicken the anticipation.

Like all such gatherings, no matter the industry, this one features the obligatory recitation of the industry’s important economic impact, in this case: $70 billion of direct activity, two million jobs, and almost $180 billion of total impact, both direct and indirect. If the purpose of that kind of data is to say: “We’re big so pay attention to what we have to say,” I’m fine with that. Use whatever leverage you can. But if you mean by it that you’re economically crucial so don’t even think of doing anything policy-wise that will hurt us, then my reaction as an economist is: No foot wedges allowed here, buddy. Play the ball where it lies.

What do I mean by that?

Suppose, as many spouses might wish and as both Scotland’s James II and China’s Chairman Mao actually did, we outlawed golf. And suppose the ban actually held. That would be a severe shank for anyone employed in the industry. (Not all bans do hold, of course. Statistics Canada just estimated that Canada’s still mainly illegal marijuana output is essentially the same as its brewing output—$3 billion per year.)

But, in the long run, would a ban on golf—would a ban on any industry?—be “bad for the economy?” Not in the way industry lobbyists imply. The money golfers had been spending on golf wouldn’t just evaporate. Now former golfers would find some other way to spend it. And former golf pros and greenskeepers and caddies and golf equipment producers and designers and researchers and golf course and resort operators and all those two million people supposedly directly involved in the now-defunct industry would find something else to do.

They would have to.

And most almost certainly would. Why? Because all the money formerly spent on golf would move into the non-golf part of the economy, which in the United States is $19 trillion (with a “t”) and therefore 270 times the size of the golf industry. All that new demand eventually would elicit new supply.

It wouldn’t be a pleasant process. No one likes to lose their job and have to find a new one. But in a $19 trillion economy the loss of a $70 billion industry just isn’t that big a deal. And even if golf were a much bigger industry, well, people have to eat. Golf’s contraction—any industry’s contraction—would lead to other industries’ expansion. To be sure, some golf workers nearing retirement age might decide to go early instead of trying to find work elsewhere, while others, hard as they did try, might never find other work. But the U.S. has a big, flexible labour market where millions and millions of people are hired or fired every month. So, after an adjustment period, almost all of golf’s “factors of production” would be absorbed and become involved in the production of other things.

What would be different is that GDP might not be quite as large as it was with golf. But this would be for “supply-side” rather than “demand-side” reasons. Some of the former golf workers may have been better at their golf jobs than they are at anything else. In fact, you’d assume they were and that’s how they ended up in golf in the first place. So overall productivity might be down a tad. But the amount of the decline would not be the current output of the golf industry, as the lobbyists invariably imply. It would be the difference between golf’s current output and the output that all the former golf workers and golf capital now produced elsewhere in the economy. Most golf workers I’ve met seem generally pretty capable so that’s probably a much smaller number.

The truly important difference is that millions and millions of unhappy people would miss their golf. I’m not sure where I’d redirect my golf spending. Maybe skiing. Maybe renting a summer cottage. But though I like skiing and I like sitting by a lake in summer I like golf more. So I’d be a little less happy if I had to do these other things rather than go hiking through long green fields after a little white ball. Strange as it seems, so would millions of other people.

That’s what we’d lose. The perverse enjoyment of golf, not GDP or jobs. GDP and jobs would take care of themselves.

So the next time someone wants to tell you about the crucial economic importance of their industry, smile back at them as they talk but don’t listen. Think swing thoughts instead. Fairways and greens. Fairways and greens.

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