Olympic hockey and marginal productivity

Feb.21, 2006

The Canadian national hockey teams `performance at the Olympics has many Canadians crowded around their tv set cheering our teams on .   The women did us proud capturing the gold medal for the second Olympics in a row. The men`s team has faltered although today thanks to an outstanding effort by goalie Martin Brodeur and Joe Sacic and Montreal West
island native   Vincent Lecavelier we held on to defeat the Czechs 3 to 2 after two straight losses to Finland and Switzerland.

Today`s   Montreal   Gazette includes a fascinating set of tables showing each of the Olympic national mens` hockey teams and their NHL salaries. The combined salary of the Canadian team is a whopping 97.7 million dollars including 9 players who earn over 5 million dollars each. The next most expensive salariat is the American team at 61.5 million, folllowed by the Czechs at 52 million, the Swedes at 45.8 million, the Russians at 45.5 million, the Slovaks at 32.8 million, Finland at 22.4 million, the Germans at 7.3 million, the Latvians at 4.2 million, the Swiss at 3.5 million, and   Kazakhstan at at 1 million. The Italian team has no NHL pros.

The single biggest salary of 8.4 million is paid to   Jaromir Jagr who is playing for the Czechs.

The fact that the highest paid team(both in terms of total salariat and average salary) Canada lost 2 to 0 to the second lowest paid Switzerland (only three   NHL pros each earning less than 1.9 million shows the obvious -   money doesn`t buy everthing.

In sports, like in life generally, money is very important but so too is fortune, determination, courage, desire, talent, boldness, effort and heart. None of which have a price tag. If we used standard economic theory to measure the marginal productivity of the Canadians versus the   Swiss or even the Finns, the Canadians at least in their two losses would come up short by a large margin.

Lets hope that the Canadians inspired by their effort today will go on to win a medal by the end of this tough competition.

But clearly the x factor which subsumes all the immeasurables that contribute to overall productivity plays a large role in the sporting world. I suspect it plays a significant role in economic life generally . On the whole it is not captured in neo-classical value theory very effectively.

Initial endowments of these characteristics plus initial endowments of wealth and capital play a larger role than we might think