World Cup: symbolic or economic success?

It seems that there would be no direct material benefit to a society that celebrates being world champion, since not one of the US$ 52 million that the AFA will receive will go to those who spent hours and hours suffering during the matches. Unlike the players, who will get a prize of about US$ 500,000; household appliance companies, which sold more televisions, or Aerolíneas Argentinas, which completed each new flight to Qatar, the 5 million people who waited under the sun for a Selection they could not see will not have an additional bonus because their equipment football won the third world cup in history.

However, I wonder if this sporting success and the human capital mobilized behind a brand called Argentina can transform this symbolic value into a concrete material value capable of spilling over into society.

“Animal spirits”. In his General Theory, keynes applied to the economy the concept of “animal spirit”, that vital impulse of the human being beyond any material reward: “A large part of our positive activities depend more on spontaneous optimism than on a mathematical expectation, be it moral, hedonistic or economic . Perhaps most of our decisions to do something positive (…) can only be considered as the result of the animal spirits and not as a consequence of a weighted average of the quantitative benefits multiplied by the quantitative probabilities”.

There seems to be a correlation between becoming world champion and the monetization of the country brand…

Keynes actually gave it a title (“animal spirits”, although in the first Spanish version of the work the translator Eduardo Hornedo translated it as “fiery”) to what philosophers, scientists and economists had been recognizing for centuries about the positive or negative consequences of these impulsive and collective movements.

So, if the “spontaneous optimism” that Keynes spoke of is capable of generating investment and consumption and influencing the different economic agents, what could be the economic benefit of what happened in the country in recent days from this phenomenon? of masses that was not guided by a premeditated “mathematical expectation”?

A first answer would be given by verifying that, since the 1990 World Cup, the countries that won the Cup had an average increase in GDP of 1.6% above forecast. In The economy of the unusual, the book by the economist Sebastián Campanario, it is shown that since 1966 the stock market index of the winning nations exceeded the general average by 9%.

Of the five champion countries before Argentina, in four of them (Brazil, Italy, Spain and Germany) the GDP of the year in which the World Cup was played (it was always in the middle of the year) ended up being higher than that of the previous period. Only when France won, in 2018, was its GDP lower than the following year.

Before the start of the World Cup, a study by the School of Economics at the University of Surrey pointed out that, since 1961, winning the cup increased GDP growth by at least 0.25% during the two quarters following that result.

… but the greatest inspiration that the Cup can shed is that the union pays more than the crack

GDP. The logic of estimating some type of positive economic repercussion from winning a World Cup lies in the global magnitude that this sporting success reaches and in the interest that the nation that was able to promote the most efficient team in the tournament can arouse.

The sectors that are immediately related as the most benefited are those linked to tourism, but the assumption is that what wins is the country brand and everything associated with it.

They are hypotheses that some economists refute. For example, in the case of Argentina, while the year after the 1978 championship was won there was growth in GDP, the year after the 1986 World Cup had a drop. Still, it is difficult to compare with those years, since there were no precise measurements of quarterly growth.

Today, while the closing estimates for Gross Product 2022 are around 5.5%, those for next year anticipate half that. It is correct that a year ago the growth projections indicated half of what it will end up being, but for now nobody dreams that next year growth will be higher than the current one.

Country Brand. I agree with those who think that success in the most important sporting event in the world could contribute to building a country brand. As what already contributes the innovative capacity of the agricultural sector, the energy potential, being the cradle of technological unicorns and the quality of meats and wines. Or a Pope who comes “from the end of the world”.

Argentina, as a market before the rest of the countries, is built day by day with the best and worst of us.

But I think the true benefits of what happened in Qatar they could be much greater than those that eventually derive from the repositioning of the country brand.

It is the second time in three years that we are facing a historic opportunity that serves as inspiration to close a gap that for more than a decade has blocked any long-term political understanding, with the economic consequences that this causes.

The first opportunity occurred in the second quarter of 2020, during the pandemic, when the majority of the political leadership was united to face the covid and therefore obtained an approval rating of more than 60%.

Macri yeta: political levity by other means

The second is now.

A new inspiring opportunity that, this time, comes from football. The message questions the obvious: if society can align behind a common objective, without even seeking immediate economic advantage, what prevents a vast majority from uniting behind a consensus that, moreover, would be capable of reaching economic and social improvements?

Just as a majority perceived in the second quarter of 2020 that its leadership was coming together to listen to the specialists and do the best possible in the face of an unprecedented event, during the soccer World Cup, society trusted that the players and the technical team formed a group that worked together in pursuit of winning a championship again after 36 years.

Even if the selection had not gotten the trophy, I understand that this joint work would still have been recognized as meritorious.

Of course, the fact that all Argentines shared the World Cup dream does not mean that, automatically, they will also rally behind a consensual political and economic project.

Inspiration. Unless, really, the time has come for a new and broad social majority to be convinced that a change of era is necessary. And that there are leaders who manage to tune in with that collective feeling.

Perhaps you had to wait for a football success to cause a turning point. An inspiration that, to begin with, allows us to recognize ourselves not as enemies but, in any case, as people with competing interests capable of sitting down to find points of agreement.

That may happen – hopefully – or it may be another missed opportunity. But it is a new sign that society is asking for a leadership that leads the change of cycle.

Because if it turns out the other way around and it is society that finally decides to lead it, the risks will always be greater.