Your taxes hard at work.. uhm I mean at play

by Eszter Hargittai on December 27, 2003

While I believe that taxes in many countries could probably be used better and for more things than they are currently, I do think there should be limits to how government spends its tax payers’ money. A recent decision by the Hungarian government seems to suggest that some see no limits. The state has decided to spend $4 million sponsoring a driver for participation in Formula One next year. If this happened in a country with adequate social services and few people living in poverty then perhaps one could contemplate its legitimacy. But in a country with as many social problems as Hungary, I find it hard to swallow. Read it and weep.

{ 34 comments }

1

Eric 12.27.03 at 9:52 pm

Truly sad. I’m trying to follow the money to figure out who would benefit from this, but I’m not getting it. When a company sponsors an athelete or team, they count it as advertising. Hungary has nothing to gain but the shallow prestiege of having an entrant in a race.

Oh, and did I read it correctly? Hungary has a “sports minister?”

2

Will Wilkinson 12.27.03 at 9:52 pm

I don’t think it would be reasonable to contemplate the legitimacy if this even if social services were adequate and poverty was low. In that case, assuming all other responsibilities of government are taken care of, there is no reason for the government to do anything with any extra money other than return it to the taxpayers. I mean, a race car?!

3

Bob 12.27.03 at 11:25 pm

“Hungary has a ‘sports minister’?”

More Strength Through Joy.

Btw Britain has a Sports Minister too.

4

eszter 12.27.03 at 11:44 pm

Will, you’re probably right.. I was trying to leave some room for possible interpretations of this decision I may have missed.

I think the idea behind it is that Hungary is a tiny country in need of any publicity it can get. Or maybe it’s about building national pride by having someone to cheer for during Formula One races. Now as to whether having a participant in such a race really builds any useful PR for a country or how it influences national pride (and whether that’s really a legit goal or a good thing) especially in contrast to other ways in which that money could be spent.. well, that’s where I seem to disagree with the politicians involved.

5

J E Thelin 12.28.03 at 1:56 am

F1 is pretty much the biggest individual sport in the world (I’d be willing to bet that in global viewer figures only football – soccer to some – beats it). So as PR money, it’s not far from being an automatic waste, except that Baumgartner isn’t exactly a particularly auspicious driver.

You have to see the bigger picture too. With more and more countries wanting to join in the F1 circus (Bahrain and China being new this year), even established venues like the Hungaroring are in danger of being dropped within the next few years (both Canada and France have been in danger this year). Showing *any* kind of commitment to the sport then will probably be a vote in favor of your country’s race staying on the schedule.

And the PR advantages of the yearly race at the Hungaroring are certainly worth much *much* more than 4 million USD.

Don’t most European nations have a sports minister, BTW?

6

Avinash 12.28.03 at 2:49 am

“Hungary has a ‘sports minister’?”

The fact that an economy like Hungary has a sports minister isint especially remarkable.
India, which probably ranks lower in terms of social indicators than Hungary, has one (the same minister is also in charge of `youth affairs’). More significantly, there is a whole sprawling bureaucracy which backs him up.
And btw, even the state of Andhra, in India is lobbying for an F1 track to be set up in the city of Hyderabad. Though i’m not sure how much money, if any, has been spent in the lobbying process…apart from a state funded trip to Italy, that is… ;)

>>Official says India looks to host Formula One Grand Prix race

September 03, 2003
HYDERABAD, India (AP) – A government delegation will travel to Italy next week in a bid to convince Formula One to add an Indian Grand Prix to its race circuit, a government official said Wednesday.
The delegation will make a presentation to Formula One chief Bernie Ecclestone, outlining facilities available in Hyderabad, the capital of the southern state of Andhra Pradesh, said state chief minister Chandrababu Naidu. Ecclestone will be in Italy to attend the Italian Grand Prix at Monza.
The meeting follows an invitation to Naidu from the Formula One authority to discuss the size of the event and requirements for hosting it.
The Grand Prix would give a tremendous boost to the state’s infrastructure and tourism, Naidu told reporters.
The state government already has held two rounds of talks with Formula One representatives.
Circuit designer Hermann Tilke, who conceived the Grand Prix race tracks in Bahrain and Malaysia, as well as the Chinese city of Shanghai, recently visited India.

7

Kerim Friedman 12.28.03 at 4:54 am

Just to put things in perspective, the Pentagon can’t account for one trillion dollars of taxpayer money….

8

Bob 12.28.03 at 6:23 am

By the account here the Pentagon has also mislaid “56 airplanes, 32 tanks, and 36 Javelin missile command launch-units” – at: http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2003/05/18/MN251738.DTL&type=printable

More to the thread theme, has no one noticed that governing regimes with totalitarian pretentions almost invariably promote national prowess in sports and sponsor a state movie-making industry? Remember that much of present concerns over performance-enhancing drugs in sport arose out of the heavy prescription of steroids to athletes in East Germany and the training up of folks of questionable gender to compete as female athletes led to gender tests. All that suggests an obsession with national image over the spirit of friendly rivalry.

9

Dan Simon 12.28.03 at 7:46 am

For some reason, people seem to like seeing the government spend money to support those entertainments they enjoy, and then scream bloody murder when the government spends money on entertainments they dislike. A friend of mine, as big a goo-goo (“good government” enthusiast) as you’ll ever find, actually voted “yes” on a referendum asking if his city should blow millions on a new baseball stadium. You see, he’s an enthusiastic baseball fan.

While I personally don’t care for the idea of $4 million in government money being spent on a Formula 1 team, I take some small consolation in the fact that lots of ordinary Hungarians of little means will probably get some enjoyment out of it. If instead the government had blown $4 million on, say, a Rothko for the Hungarian national art museum, how many low-income Hungarians would have been likely to get a big thrill out of it–and how many Crooked Timber collectivists would have complained?

10

daithi mac mhaolmhuaidh 12.28.03 at 2:42 pm

I think JE Thelin hit it on the head. It’s easy to see the powers-that-be deciding to take the Hungaroring Grand Prix away and giving it to China or somebody. That GP is the only thing that got me to Hungary, and probably a lot of other people too. So I assume the investment is aimed at that.

11

Chip Taylor 12.28.03 at 4:00 pm

What’s next? Postal departments sponsoring bicycle racing teams?

Oh, wait…

Nevermind.

12

Bob 12.28.03 at 4:01 pm

Roman emperors came to understand well the effective political recipe for minimising those plebian discontents which could lead to revolting consequences: Bread and circuses.

13

Danny 12.28.03 at 4:12 pm

I do think there should be limits to how government spends its tax payers’ money.

If one accepts that the gov’t can spend money on promoting ‘culture'[1], then I don’t really see how one can make distinctions between spending it is wrong to spend it on Formula-1 drivers but that spending it on Symphony orchestras is OK. This is a matter that should be for people to decide, that is to a democratically-elected gov’t.

[1] Whatever that means. It may mean something useful for anthropologists. For the rest of us it is just something we have and others don’t.

14

Mikhel 12.28.03 at 5:37 pm

Dan Simon —

Great points.

15

SqueakyRat 12.28.03 at 8:10 pm

Dan Simon —
Well, maybe. Except “thrill” and “Mark Rothko” are words I never expected to read in the same sentence.

16

msg 12.28.03 at 8:32 pm

Marathons, javelins, disci, Jamaican bobsleds for crying out loud, which most people found endearing and fun, though Jamaica’s economic picture at the time wasn’t all roses and apples. What jars is the serious power of Formula1. It’s an exclusive club for the privileged and their suitably respectful wannabes. Hungary officially sanctioning their own car and driver is unseemly. It’s the little guy claiming too big a share of the masculine glamor. Some colonial parvenu pretending to be James Bond.
But almost everyone these days climbs in and out of automobiles. When’s the last time you threw a spear?
Aren’t the Olympics a celebrating of excellence at what were once common activites?
What’s more common than driving? Eating?
Say, how about somehow combining bread AND circuses into one highly entertaining competition everyone could enter? We could feed the (qualifying) poor and entertain them at the same time.

17

dsquared 12.28.03 at 9:45 pm

I actually think that this may be a popular move, as the one thing I do know aout the Hungarians as a bunch is that they are absolutely mental about Formula 1. Even more so than the Finns.

18

eszter 12.28.03 at 10:47 pm

Dan Simon – what you seem to be referring to here is the difference between what some who study culture would distinguish as “highbrow” vs “lowbrow” culture. You are suggesting that Rothko would be highbrow and thus okay for some whereas Formula One may be considered lowbrow and thus not okay for those same people. Had my post been about the Hungarian government’s subsidy of Hungarian pop music (which also exists) then this would be a more legit critique. But my post wasn’t about that. It was about sports.

One could probably argue that various sports could be considered “highbrow” or “lowbrow”. And then you could’ve suggested that if they were sponsoring someone’s entry into a more highbrow sport then perhaps I wouldn’t be complaining (but how can you know that?).

I think comparing across domains (from arts to sports) is a bit of a stretch.

And no, anthropologists are not the only ones for whom culture is “useful” as Danny puts it.:) [that’s a pdf link]

19

Jon H 12.28.03 at 11:01 pm

Formula 1 is apparently huge in Europe. The sports I hear about most on BBC world service are soccer, cricket, tennis, and F1.

It might not be a bad investment if Hungary is trying to advertise themselves and project a modern, affluent image to prospective tourists.

At least they’re not attracting football hooligans…

20

Jon H 12.28.03 at 11:24 pm

Another thing to note is that, as far as government financed boondoggles go, $4 million is relatively cheap.

Had the plan instead been something that involved construction of a building – a cultural center, say – it likely would have cost at least $10 million. And, these days, it probably would have involved Frank Gehry and a goopy titanium monstrosity.

Worst case, you have ill-considered things like the UK’s millenium dome. Even for a wealthy country, that billion pounds could surely have been better spent.

A Formula 1 team might not be the wisest expenditure, but it surely could have been far, far worse.

21

Dan Simon 12.28.03 at 11:37 pm

You appear to be claiming that there is a huge, obvious moral difference between government-funded cultural entertainments that fall under the category, “sports” and government-funded cultural entertainments that fall under the category, “arts”. In fact you suggest that the difference is so great that the former are clearly egregious and appalling, while the latter clearly are not.

Now, I’m willing to accept your assurance that your distinction is not based on the “highbrow”/”lowbrow” cultural divide. Perhaps, then, you’d like to explain your true criterion for distinguishing between them? It’s certainly not obvious to me.

22

eszter 12.29.03 at 12:03 am

Dan, I probably took the discussion in the wrong direction. The Rothko example wasn’t a good analogy for other reasons either. If the gov’t decided to pay a person $4 million to travel somewhere and take a look at a Rothko painting (or take a course in Rothko-style painting) that would have been a better analogy, in my opinion. The gov’t is sponsoring one participant in a race here. The benefit to the masses from that one person’s participation is unclear. Formula One is already broadcast in Hungary so people already have access to watching the race. There is even a racetrack in Hungary (referred to by others in this thread: Hungaroring) so interested parties have relatively easy means to going and watching the race in person (e.g. they don’t have to travel abroad). This money is going towards one person’s participation in it. It is not a public good in that sense, it serves one private individual. I did not articulate this point clearly earlier, thanks for pushing me on it.

23

Jon H 12.29.03 at 12:54 am

Eszter writes: “The gov’t is sponsoring one participant in a race here. The benefit to the masses from that one person’s participation is unclear. Formula One is already broadcast in Hungary so people already have access to watching the race. “

I’m sure it’s multiple races, not just one race.

And I think the point is not just for Hungarians to see it, but for people in other countries to see it.

24

EKR 12.29.03 at 3:55 am

I’ve got to agree with Dan here, which is surely one of the signs of the apocalypse.

The presumed benefit from the Rothko would be that people in Hungary could go see it, which they would consider to be valuable. The presumed benefit from the F1 sponsorship is that Hungarians can derive pleasure/national pride from knowing that one of their own is racing in F1–and watching him on TV, I guess. Now, I have no idea whether more people in Hungary would prefer to have their money spent on a Rothko or on F1, but I don’t see any a priori reason why one expenditure would be legitimate and the other not.

Incidentally, I note that Hungary sent a team to the 2000 Olympics in Sydney, and in fact collected 17 medals. I’m suspecting that Hungary spends much more than $4 million on Olympic athletes (off the top of my head, I’d guess that it’s about 50-100k/athlete) Although there are of course more than 1 athletes, this still strikes me as a case where a relatively large sum of money is being spent to benefit a small number of athletes, again presumably with the rationale of national pride. Is it the principle of the thing or just the amount you object to?

25

eszter 12.29.03 at 11:11 am

Rothko is not a Hungarian artist so the analogy is still not good if the point was to suggest that Hungarians take pride in seeing the participation of a Hungarian in some event (or seeing the artwork of a Hungarian in a gallery).

More importantly, as I said in my earlier post, people in Hungary can already see Formula One races so this subsidy was not about making a new event/experience available to them.

Yes, I’m sure participation in the Olympics is expensive.. for every nation.. as is participation in other world championships. But my impression is that Formula One is a different type of sporting event with private participation where participants represent themselves (or the cars or companies) more than a particular nation. My impression is that there is no limit on number of people from any particular country (but perhaps I’m wrong there). In contrast, each country only enters the Soccer World Cup with one team, only has one soccer team in the Olympics, etc. I don’t think the comparison is completely valid.

26

EKR 12.29.03 at 3:50 pm

Well, it’s always tough to draw tight analogies that only let you focus on the point you’re trying to make. But, no, I wasn’t trying to suggest that Hungarians would have pride in Rothko, but rather that they would enjoy seeing his painting. That’s one variety of benefit. Pride in one’s countryman (in the F1 case) is another. It seems to me that you’re arguing that one variety of benefit is inherently superior to the other. Is that not your argument?

You make two points wrt the Olympics:
(1) That people represent their country, as opposed to F1, where people represent themselves.
(2) That there is no limit on participants.

While I agree that point (1) is formally true, I think it is practically false. People seem to have an enormous pride in their countrymen or women when they participate in international sporting events, whether or not they are competing as part of some national team. Consider, for instance, the pride that Lance Armstrong has aroused in American cycling enthusiasts. Now, it’s true that Lance is riding for USPS, so that does muddy the water a bit, but there was a similar reaction to Greg Lemond, even when he was riding for La Vie Claire.

(2) It’s true that in principle there are an unlimited number of drivers from any country but in practice, there appear to be about 20 active drivers total whereas any given country probably has an Olympic team in excess of 20 people. So, I think it’s quite plausible that some Hungarians would feel national pride in a Hungarian participating.

I take your second paragraph to be primarily an argument that Hungarians are unlikely to take pride in seeing a Hungarian in F1. However, are you saying that *even if they did anyway* this would be an illegitimate expenditure? If not, then it seems that we’re really discussing whether they do take pride in it, in which case that seems like an appropriate matter on which the government should be making judgement calls, no?

27

zizka 12.29.03 at 8:53 pm

To an American there’s nothing unusual about spending public money on sports instead of education or welfare. It’s a way of life here — most notably when funding stadiums for professional sports.

I hate the subsidies even though I’m something of a sports fan, but I never find them surprising any more.

28

a different chris 12.29.03 at 9:44 pm

In a freestanding sense I find this insane on so many levels I hardly know where to start, but in a comparative sense I don’t see any difference between what the Hungarians are doing and what every other major (and some not so major) government does when it comes to sports.

Except for one minor point: What if the Hungarian driver not only sucks, but gets himself killed in the process? This is not a problem that you face when you send an Ilie Nastase out there with a racket.

Zizka: I can’t decide if it is sadder to watch the public purse robbed on playboxes for millionare and billionaires, or to contemplate the fawning over top high school atheletes vis. equally outstanding scholars.

29

Jon H 12.30.03 at 6:55 pm

Diff. Chris writes: “What if the Hungarian driver not only sucks, but gets himself killed in the process? This is not a problem that you face when you send an Ilie Nastase out there with a racket.”

Eh, the driver knew the risks.

The skiers on a nation’s olympic team could get injured or killed during competition, so F1 isn’t that unusual in that respect. Plenty of sports involve a risk of serious or fatal injury.

I recall a Chinese athlete, I think a gymnast, who was paralyzed during a practice or competition a few years ago.

30

Zizka 12.31.03 at 12:03 am

D. Chris — yeah, if you have your country’s hopes pinned on a single hero in a blood sport, there’s the possibility of having it backfire. But the Hungarian libertarians will certainly have an answer ready.

31

J E Thelin 12.31.03 at 8:21 am

F1 may be a fast and essentially dangerous sport, but aside from two accidents killing trackside workers (one of which was an unfortunate one-in-a-million freak event), there have been no fatalities in the sport since 1994.

32

J E Thelin 12.31.03 at 8:21 am

F1 may be a fast and essentially dangerous sport, but aside from two accidents killing trackside workers (one of which was an unfortunate one-in-a-million freak event), there have been no fatalities in the sport since 1994.

33

shanti 01.01.04 at 7:40 pm

I think that some of the earlier comments on the money/tourism aspect of the sport are relevant to evaluating whether this is a good decision or not.

Yes, this is about sponsoring a single driver for a year and it is unusual for a government to do that in F1. *But*, F1 is a huuuuge money-making enterprise–both for teams and countries who host races. And there is alot of importance attached to a “home” race if a driver or team is popular. For example, the Brazilian GP was the place to go if you were a Senna fan and wanted to see him. Likewise, when Ferrari is doing well, everyone wants to be at the Italian GP. So, if this guy does do well, Hungary will probably benefit by more than $4 mn worth of tourism, fees from the FIA governing body, maybe TV rights (I can’t remember if countries share profits from TV rights with the FIA or not, sorry).
I also agree that this may be a strategy to keep Hungary on the GP schedule.

So, I think if this is pure charity on the government’s part, it would probably be considered a bad use of funds (or at least less good than some other uses). However, if they see it as a money-making venture, whose proceeds can then go to a social cause of some sort, then maybe it’s not so egregious.

34

Barry Posner 01.05.04 at 8:55 pm

This isn’t new. Malaysia sponsored the Stewart F1 team for a few years, and also sponsored Minardi when Malaysian driver Alex Yoong was behind the wheel in 2002.

Several state enterprises have sponsored teams, as far back as Saudia Airlines sponsoring Williams in the early 80s – when bin Laden enterprises was also a Williams sponsor :-)

Not to defend this action, but $4 million is a drop in the bucket comapred to public expenditures on stadiums in North America. Hell, in Pittsburgh public funding of new stadiums was defeated by initiative, yet the pols still figured out a way to get public dollars into them.

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