From Slowman's article on the front page (and I'm raising it here because I find conversation on the Facebook comments painful):
I find this a pretty apt metaphor, not only for the description of where prize money fits into a broader economic paradigm but for why I think there is so much angst about it particularly amongst the community of frequent triathlon participants.
The reason taxation of farmers is necessary to pay warriors is because the service the warrior provides - security - is non-excludable. He can't efficiently only provide it to one farmer who pays him. The concept is clearer in terms of national defence. We all pay the army to keep our land safe from barbarian invasion. (This is non-partisan basic economics for the most part although I am sure some libertarians will chime in and hammer on me.) It can lead to a free rider problem in that if everyone but one person pays the warrior for security, I get the benefit of his services without paying. In society, we get around this problem by compelling everyone to pay in via taxes. Same in triathlon. Whatever value is provided by the pointy end of the pack is provided collectively and it would impossible to unnecessarily cumbersome to have the pros essentially circulate and collect $10 from every participant. The Real Starky IMLP 7th campaign was essentially that task. Imagine running one of those, for each race, for each prize handed out and you get the idea.
In the race scenario, the pro prize purse "tax" is collected by the RD. The biggest most infamous RD, the one collecting the most taxes, is WTC. However unlike a government, which is essentially not supposed to profit from its activities, WTC is making profit for investors. That is why I think there is so much chatter on this topic and why WTC takes so much heat. The tax collector, who is setting our tax rate and divvying out the resources to pro warriors, is taking a big fat slice of those taxes to line its own pockets. And it is far from apparent that the rate of pay is being set a level which the payors wish it to be set at. In liberal democratic government, we hash out those decisions in elections over time. In triathlon, we bitch about it on Slowtwitch.
By comparison, the ITU can skate on much of this because it is (at least according to its own constitution) a "non-profit-making organisation". Whether you think the prize purses should be higher or lower, I think many of us take some comfort that the purses aren't being suppressed to line the pockets of financiers.
Also, thanks for a nice article Dan.
Quote:
When a farmer pays a “tax” to the warrior it’s not because he feels the warrior deserves to be paid. It’s not philanthropy. It’s not because he feels sorry for the warrior. He pays the warrior because he, the farmer, benefits. My thesis is that the chief beneficiary of the prize money is not the pro. It’s you and me. When an RD invests his race with a rational purse scaled and calibrated to the size and stature of the event it’s not because he cares about the pro, but because he cares about the experience of everyone paying to enter his race.I find this a pretty apt metaphor, not only for the description of where prize money fits into a broader economic paradigm but for why I think there is so much angst about it particularly amongst the community of frequent triathlon participants.
The reason taxation of farmers is necessary to pay warriors is because the service the warrior provides - security - is non-excludable. He can't efficiently only provide it to one farmer who pays him. The concept is clearer in terms of national defence. We all pay the army to keep our land safe from barbarian invasion. (This is non-partisan basic economics for the most part although I am sure some libertarians will chime in and hammer on me.) It can lead to a free rider problem in that if everyone but one person pays the warrior for security, I get the benefit of his services without paying. In society, we get around this problem by compelling everyone to pay in via taxes. Same in triathlon. Whatever value is provided by the pointy end of the pack is provided collectively and it would impossible to unnecessarily cumbersome to have the pros essentially circulate and collect $10 from every participant. The Real Starky IMLP 7th campaign was essentially that task. Imagine running one of those, for each race, for each prize handed out and you get the idea.
In the race scenario, the pro prize purse "tax" is collected by the RD. The biggest most infamous RD, the one collecting the most taxes, is WTC. However unlike a government, which is essentially not supposed to profit from its activities, WTC is making profit for investors. That is why I think there is so much chatter on this topic and why WTC takes so much heat. The tax collector, who is setting our tax rate and divvying out the resources to pro warriors, is taking a big fat slice of those taxes to line its own pockets. And it is far from apparent that the rate of pay is being set a level which the payors wish it to be set at. In liberal democratic government, we hash out those decisions in elections over time. In triathlon, we bitch about it on Slowtwitch.
By comparison, the ITU can skate on much of this because it is (at least according to its own constitution) a "non-profit-making organisation". Whether you think the prize purses should be higher or lower, I think many of us take some comfort that the purses aren't being suppressed to line the pockets of financiers.
Also, thanks for a nice article Dan.