Fraser Forum

Golf is great—but don’t even think about subsidizing it

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Golf is great—but don’t even think about subsidizing it

May 1 was National Golf Day in Canada and the United States, and golfers and their association officials celebrated by doing what comes naturally to groups in the 21st century—lobbying.

Government relations experts on both sides of the border pitched the importance of golf to their respective economies and highlighted how golf supposedly benefits our two countries in endless different ways. In Washington, according to the event’s official website, golfers helped in “turf restoration projects between the Lincoln Memorial and the Washington Monument,” laid “irrigation pipe along the Reflecting Pool” (one of the world’s longest lateral hazards), mowed near the Vietnam Veterans Memorial and laid sod near the Washington Monument. They also met with politicians on Capitol Hill to “discuss golf's 15,000 diverse businesses, 2 million jobs, tax revenue creation and tourism value.” As the Golf Channel kept telling us, golf’s “contribution” to the U.S. economy is $84 billion a year.

Now I love golf—to a fault, my wife would probably tell you. No one looks forward more than I do to the start of the new golf season, which in southwestern Quebec is just about now. Some courses actually opened last week, though that only prompted the weather to turn bad. Luckily, the meteorology looks better for next week. But apart from being a golfer I’m also an economist and as an economist I’ve got to tell you most of the bumpf behind golf lobbying is hogwash. That’s not just because golf is a seemingly frivolous pastime (fighting words at any 19th hole). Most of the bumpf behind most industry lobbying is hogwash.

Golf is wonderful, we who love it believe. But when I go out and play 18 holes the person that benefits is me. My family may share in that benefit. True, they do have to put up with stories of this or that great or, more often, ghastly shot. But in the long run they get a saner, happier spouse/father so on balance they gain, too.

But that’s it. Playing 18 benefits me a lot and them a little but no one else at all. Golf is, in Economics-Speak, a “private good,” one whose consumption almost exclusively benefits the person doing the consumption. As a rule, markets are extremely good at providing private goods. The people running the golf course decide how much they have to charge per round to make money and, given whatever they settle on, I decide whether the benefit I get per round exceeds what I have to pay for it. In my view, where I play, it almost always does. If enough people feel as I do, the course can stay in business. If not, it goes out of business. Too bad for me and the rest of my fellow golfers, but if what we’re willing to pay isn’t enough for those in the business of supply, the resources currently going into the course should be devoted to some other purpose that can earn their keep.

We have, in sum, the perfect candidate for hands-off, market-run allocation. The number and quality of golf rounds supplied is determined by the number and quality of golf rounds golfers demand, which is exactly as it should be. Governments and lobbyists, keep out!

And that $84 billion “contribution” to the U.S. economy? First, it’s not a contribution, in the sense of “gift,” even if that tends to be the language we’ve used about such things for the last few decades. It’s a self-interested purchase by people who are benefiting from the goods and services supplied. When they decide the benefit they’re getting isn’t worth what they’re having to pay, they’ll take their money elsewhere. Golf will decline in economic importance but whatever else they spend their money on will rise. “The economy” will do fine. It won’t produce as much golf but it will produce whatever else takes their place in the never-ending ebb and flow of activity fashion.

Are there truly no external benefits from golf? Granted, if I and other codgers keep ourselves active and healthy hammering a little white ball around the countryside, that may ease the burden on Medicare, which back in the 1960s we decided to finance collectively. So my playing golf may provide you with a small fiscal benefit—assuming the bureaucracy doesn’t suck it up and spend it on something it and the lobbyists favour. But far and away the prime beneficiary of my good health is me. I have every incentive to keep myself healthy with or without any subsidy you may decide to provide me.

Plus, golf isn’t the only activity that can help keep me healthy. To get it right, you’ll have to subsidize all other ways we seniors can keep ourselves going.

And on top of that, do the math. Suppose you provide $1 of subsidy. How much does that increase my golf playing? Not much, I bet. And how much does the induced increase in my golf playing improve my health? Also only a little. And how much does that improvement in health reduce my demand for Medicare services? And what share of that reduction in Medicare budgets do you get back in tax relief or other government services that you, as opposed to some lobby, actually benefit from? Small times small times small times small = really small. Buying lottery tickets is probably a better investment for you than subsidizing my golf.

Enjoy the golf season, if golf is your pleasure. Enjoy whatever else you like, if it isn’t. But forget about “the economy”—it will take care of itself.

Fairways and greens, everyone.

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