Neo-liberal economic orthodoxy holds that governments are powerless to spend their way out of the current crisis, instead austerity and cutbacks are the watchwords for reaching prosperity. Indeed they go so far as to state that any policy that smacks of the mildest Keynesianism is not only misguided but would exacerbate the problems of recession, pushing the country further down the spiral of debt, despair and dependency. It would be fair to say that this mantra is heard with such sickening regularity from ConDem ministers that it is now more regurgitated than repeated. They have come to talk of Keynes in much the same way as the more blasé economists once talked of global depression: as a historical curiosity one can safely leave confined to the 1930s. To put it bluntly, government spending is bad.
That is until one mentions the Olympics. This is the single
area of expenditure that is not simply tolerated but positively enthused over.
The costs of London 2012 have rocketed to £11 billion since the initial bid was
tabled, yet assurances are made almost daily that the dividends of the Games
will far outweigh any prior budgetary concerns. This summer’s festival of sport
brings with it the promise of inward investment, of job creation, of increased
tourism and regeneration. In other words, the Olympics will act as a Keynesian
style stimulus for economic growth. Other than acknowledging the pathological
hypocrisy common to so many politicians, how do we explain the doublethink at
the heart of the government’s policy?
The answer lies in the reality of staging the Olympics. The
Games have become the justification for, and the means by which, a raft of
governmental policies are aggressively pursued. Prime real estate is sold to
corporations, areas of London have become experiments in social
liberties and the right to protest have come increasingly under attack, and
Londoners are subjected to untold
disruption to ensure the safe and speedy passage of the corporate
hospitality crowd. When one combines the vast costs with the appalling social
impact of hosting the Olympics then a picture is painted with which even the
most ardent sports fan would find disagreement.
In order to validate their decision to host the Games,
governments in each host nation have developed a narrative of legacy. It is the
spoonful of sugar to help the mega-event medicine go down. And the promise of
urban renewal is a potent argument in the face of anti-Olympic opposition,
especially when one considers how little investment some areas of London have
received over the last decades. Local people may be sceptical, but they
desperately want what the legacy is said to offer. It would be a powerful case
for hosting the Olympics if there were any truth to it. History, however, tells
quite the different story.
The first thing to note is that the Games invariably overrun
their budget. The overspend on the Athens Olympics was around 1000%. Montreal
only finished paying off their host-city debt in 2006 – thirty years after they
staged the Games. Invariably Olympic boosters point to those Games that
recorded an operational profit – such as Barcelona in 1992 – in support of
their argument. However scrutiny of these figures reveals an economic sleight
of hand worthy of Arthur Andersen or Enron. Capital investment (improvements to
a host city’s infrastructure, such as roads, tube lines etc) is excluded from
the balance sheet. Since, in the case of Barcelona, this figure is in excess of
$9 billion, its omission has a dramatic and decidedly misleading effect.
Invariably these massive costs of capital investment are the responsibility of
the public purse; operational profits end up in the hands of the IOC or big
Likewise the other much-lauded elements of legacy have
proven to be little more than white elephants. Helen Lenskyj eloquently details
the effects of hosting the Games on the poorest communities here.
Venues in successive host cities have been left unoccupied and derelict, with
Olympic buildings in Athens
used to house the growing numbers of homeless people as economic folly and
economic crisis collide in a moment of historical irony and immense human
suffering. Studies have shown that the number of tourists travelling to New
South Wales actually fell in the years following the Sydney
Olympics. For every positive claim made of the Olympic legacy, critics can
point to a plethora of deleterious effects.
The London 2012 Olympics now seem to be following this
familiar formula. Even Boris Johnson has been forced to admit that there is no
“legacy masterplan”. The Olympic stadium is still to find a permanent resident.
The promised jobs have turned out, in the main, to be temporary and short-term.
The investment has come at the expense of local residents and public spaces.
The chances of the Games ‘inspiring a generation’ are looking increasingly
unlikely according to the Public
Affairs Committee. At the same time the salaries
of LOCOG officials show the virtues of adhering to Olympism. LOCOG chief
Paul Deighton is being paid £800,000 a year, while Seb
Coe collects £350,000. Another 16 LOCOG staff are paid more than £150,000
As the mask of good intent slips away, so the economic
rationale of the Olympic Games reveals itself to be little more than good
old-fashioned ‘trickle-down’ theory. Mammoth government expenditure is merely
the reallocation of public money, which might otherwise have been used for
schools and hospitals, to facilitate the Olympic corporate bonanza. While the
mass of people are left thankful for the few crumbs that have fallen from the
top table so the IOC and big business grow fat on their very own legacy of