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About Amit Varma

Amit Varma is a writer based in Mumbai. He worked in journalism for over a decade, and won the Bastiat Prize for Journalism in 2007. His bestselling novel, My Friend Sancho, was published in 2009. He is best known for his blog, India Uncut. His current project is a non-fiction book about the lack of personal and economic freedoms in post-Independence India.




Bastiat Prize 2007 Winner

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24 February, 2008

There’s Nothing Wrong In Being ‘Commercial’

This piece of mine was published today in Mail Today (pdf link).

Wherever there’s big money floating around, politicians emerge and start squealing. The recent auctions at the Indian Premier League have roused the ire of both the Left and the Right of Indian politics. On the right, the inimitable Balasaheb Thackeray has described the IPL auctions as the “gambling of industrialists”. On the Left, Gurudas Dasgupta is complaining that this will make “every youngster not a good sportsman but a man hungry for money.” 

Sundry politicians and commentators are telling us that this obscene spending will corrupt the spirit of the game, that these players are selling their soul, and so on. They behave as if “commercialization”, a term used repeatedly by shocked observers, is The Great Indian Sin. I have a question:

What, precisely, is wrong with commercialisation?

If Thackeray and Dasgupta pondered the history of human affairs, they would note that human progress is possible only because of the profit motive. The only way to make a profit is to fulfill the desire of fellow humans, by manufacturing goods or providing services that they need. The search for profit fuels innovation and enterprise. It leads to new technologies and better service. People trade to their comparative advantage, they specialize, and this makes economies more productive, and raises everyone’s standard of living.

Without such “commercialisation”, we’d be stuck in the stone age.

Profit

If Thackeray really has a problem with industry - for that is what the industrialists he condemns are all about - then he should step wearing clothes. All the clothes he wears are produced for profit, by industrialists, who clothe him not because they care for him or want to defend Hindu culture, but because he pays them money. How vulgar!

If Dasgupta has a problem with people “hungry for money”, he should immediately go on a fast. The people he gets his groceries from provide it in exchange for money, as do the restaurants that serve him food. There is only one appropriate response to this shocking commercialisation and rampant consumerism: Stop eating.

One blogger bizarrely compared the cricketers up on auction to prostitutes. Firstly, in the absence of coercion, I don’t see what is wrong with prostitution, or why we should look down on prostitutes. Secondly, if selling a service makes one a prostitute, then I am unquestionably a lady of the night, and this is my short, black, leather skirt that you’re reading. We are all whores in our own ways - and there is nothing wrong with that.

Back to the cricket. Besides the mere fact that money is involved, many people are also complaining about the amount of money the cricketers are getting. Some say cricketers should not be so well paid when other sportspeople in this country are so poorly paid. Other say that it is an outrage that Ishant Sharma should get more than Chaminda Vaas, and Rohit Sharma more than Ricky Ponting.

Look, who determines these prices? In the long run, you and I do. The businessmen putting that cash on the table do so because they estimate that those are the returns they’ll get on their investment. Those returns will come from us: We’ll buy the merchandise, we’ll watch the matches - which determine the value of TV rights - and their appeal to us will determine the value of the endorsements that flood in.

What if the team owners are wrong, and overpay for some players? Well, then they’ll duly learn their lessons when their team’s performance doesn’t justify the investment, and their bottomline suffers. What if some players are underpaid? Well, if they perform beyond their renumeration, they’ll receive their rightful value when the transfer season begins.

Twenty20 is a new form of the game, and the IPL is a new venture. It will take some time for the market to start functioning smoothly, and getting the values right. Until then, there is no point begrudging these cricketers their earnings.

The argument that this money would be better spent on other sports is bogus. If you feel Indian football should get more attention than Indian cricket, then here’s what you should do about it: Go out there and watch some local football games. Put your money where your mouth is. If you contribute your eyeballs, advertisers will open their chequebooks. If other sports don’t have a following in India, it is not because people don’t put money into them - it is the other way around.

Competition

Back to the IPL. Despite the BCCI bungling up sp much of the process, I think the IPL, if it succeeds, will be revolutionary. The reason for that is that it introduces into cricket the best guarantee of quality and efficiency: Competition.

The market for cricket has so far been a monopsony: There has been only buyer for a cricketer’s services. An Indian cricketer who wants to play cricket at the highest level can only sell his services to the BCCI, and is dependent of its selectors picking him - an imperfect process open to politics and the whims and fancies of individuals. That will change if the IPL takes off. A young, talented cricketer will have a number of people he can sell his services to, from the Bangalore Royal Challengers to the Delhi Daredevils to the Chennai Super Kings. If he is good, they will compete for him, thus guaranteeing him his true market value.

The BCCI, when it comes to cricket in India, has essentially had a captive market. The IPL teams will have to compete. The competition will threaten their existence, and they will have all the right incentives to excel. They will eschew the local politics of selection. They will search for differentiators in terms of training and scouting new talent. Like some football clubs do in Europe, they might establish youth academies to find and hone new talent. They will do so not out of love or duty to the game, but with regard to their bottomline. Cricket will benefit, as its machinery will flow that much smoother. 

Tests?

For a cricket purist like me, there is a flip side to this: What will happen to Test cricket? If the IPL succeeds, Test cricket will surely suffer. Already, one hears rumours of the ICC schedule being subject to the demands of Lalit Modi and his men. Given the amount of investment, in terms of time, that Test cricket requires from its viewers, it is possible that Test cricket will slowly die out.

Hordes of commentators and politicians will then start squealing about how the demands of the market have killed Test cricket, and how the market is a cruel, malign force.

Personally, I believe that Test cricket will have enough of an audience to survive—even if it ends up being a niche audience. But if it doesn’t, here’s my question: Should people who don’t watch Test cricket be forced to subsidize it? Remember, commerce is all about giving you what you want. If Test cricket dies, the killer won’t be commercialisation, or the IPL, or the greed of businessmen - it will be us.

*  *  *

Also read:

Dear Navjot Sidhu
The Twenty20 Age Begins

IBNLive and Rediff links via email from Praveen Krishnan.

For more, check out my essays and Op-Eds archive.

Posted by Amit Varma in Economics | Essays and Op-Eds | India | Sport

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