Saturday, June 16, 2012

The Myth of Olympic Legacy

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 cleansing, civil 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 business.

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 each.

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 riches.