Thinking Aloud: FIFA and the Blagojevich Principle

May 28, 2015 by Darius 

Yesterday, a US federal court unveiled indictments against 14 officials of FIFA, the international soccer organization, on charges of corruption.  The men were taken into custody in Switzerland and are pending extradition to the US.

FIFA has long been suspected of being a very corrupt organization, and with good reason.  After all, FIFA officials possess the first thing necessary for corruption: something valuable to sell.  In this case, FIFA officials possess the votes for which country should get to host the World Cup.  It’s the most recent manifestation of what I’ve dubbed The Blagojevich Principle.

Rod Blagojevich was the governor of Illinois in 2008 when Barack Obama, who was then a US senator from Illinois, was elected president.  That left Blagojevich with the chance to appoint someone to fill Obama’s seat for the remainder of Obama’s senate term.  Blagojevich, sensed an opportunity: why just appoint someone when he could sell the seat for personal gain?  As he said to an aide, “It’s a fucking valuable thing, you just don’t give it away for nothing.”  Unfortunately for Blagojevich, due to an ongoing investigation into suspected corruption, the FBI was listening in, and Blagojevich was packed off to prison.

Without intending to, Blagojevich coined a pithy way of expressing a very fundamental idea.

You don’t need to look far to find The Blagojevich Principle in action.  The Blagojevich Principle isn’t always harmful.  For example, foreign tourists visiting Jordan must pay about $70 to enter Petra, whereas Jordanians pay less than $5 for admission.  Why?  Because Petra is a f*cking valuable thing.  Foreign tourists can and will pay a significant premium for the opportunity to see Petra.

However, The Blagojevich Principle can be quite pernicious.  When an Angolan official lines his own pockets with kickbacks from contracts he approved for oil rights, he sold his country’s minerals, which were a f*cking valuable thing and cannot be replaced, for his own gain.  When a Dagestani official takes a bribe from someone looking to enlist in the military because that’s the only reliable route to future employment in the Caucasus, he sold what was supposed to be an opportunity open to all to someone specific for his own gain.  When FIFA officials sold their votes for World Cup venues, they deprived countries that couldn’t or wouldn’t pay bribes from consideration for hosting a tournament that is supposed to transcend national squabbles.  While that certainly isn’t tantamount to human trafficking, it erodes the international community’s faith in the rule of law and of fair play.

The Blagojevich Principle is perhaps as common an economic driver as Adam Smith’s invisible hand of the marketplace.  And that is often not a good thing.  We have become too inured to the idea that money not only makes the world go ‘round, it is also the most appropriate way of divvying up access to opportunities that should be made available to all, not just to those willing and able to pay for them.

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