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Hi everybody! It's Stefan Molyneux from Freedomain Radio. Hope you're doing well. Here are some
interesting truths and facts about the Olympics. Did you know that originally the Olympics
were conducted entirely in the nude, usually by fairly well-oiled young men who I guess
were parading in front of Socrates and Plato, as perhaps tasty morsels for after the games?
But, I guess wouldn't work so well now. High-def and slow motion... I mean, nobody looks good
doing any kind of exercise no matter how cut you are, but what's going on at the moment
is, of course, there's a winter games going on, and the economics of the Olympics are
really quite fascinating. There was up until they nineties fairly strict bans on athletes
making any money. You had to be an amateur and so on, and even now the top athletes in
track and field in America usually make less than—about half of them make less than $15,000
a year, and the International and American Olympic Committees pay the athletes zero dollars.
They will actually cover some flight and hotel expenses, but even that money comes from a
combination of private and public sponsors and donors. So, they rake in staggering amounts
of money while paying the athletes, who everyone is that watch, zero. Now, some athletes do
make a lot of money. And in fact, you will get a bonus if you are, I think, in Malaysia
and you win a gold you get a gold bar worth over $600,000, but I don't think they have
ever won a gold. In America, you get $25,000 for gold and lesser amounts for silver and
bronze. You have to pay taxes on that, of course, but you will get some extra scratch,
but not a lot of money for the athletes. It's kind of important to remember as we start
looking at the economics and fiscal reality of the Olympics.
So, mega-corporations are kind of handpicked by politicians to make up some of the lost
taxpayer revenue from the whole affair, and generally leave a giant smoking Nevada-sized
crater in the public finances. So, mega-corporations like Samsung, Coca-Cola, McDonald's, Cadbury's,
and so on... all of the least healthy things (laughs) are advertising at the Olympics...
and, they provide sponsorship opportunities and, of course, they pay the government millions
or tens of millions of dollars for this, none of which really goes back to the taxpayer,
but stays in the government. See, the government takes money from you to pay for the Olympics,
takes money from the corporations to help fund them, and doesn't return the money back
to you. It's quite of a giant exercise in crony capitalism or "crapitalism". In fact,
the government sometimes goes to such lengths that they ban anybody who's got a small business,
who might show up in a background shot, from advertising their business. In the London
Olympics, they actually went after anyone that had the word "Olympic" in the title.
Even at the restaurant they went to after—a Greek named "The Olympic Grill" or something
like that. Apparently, the copyright is so strictly enforced it goes backwards in time
and across different venues as well. So, it's pretty tightly controlled. When McDonald's
secures a right to an Olympic venue, they use government power to ban anyone else from
selling French fries in the entire venue. So, really, it's quite a—you know, remember
how the government doesn't like monopolies. Well, they will create one for you if the
price is right. Now, in 1960 the right to broadcast the Olympics sold for $50,000. Now,
they run into the billions and billions of dollars.
It's important to remember how this actually works. So, the Olympics are generally constructed
using the taxpayers' money, the athletes are often trained using the taxpayers' money,
the images and videos are broadcast over public-owned and publicly-funded airways, publicly regulated
airways, but then you have to pay a huge amount of money, in terms of time, just watching
commercials and sponsorship opportunities. So, it is pretty wretched. It's the same thing
that goes on with NFL stadiums where generally publicly-funded stadiums are filmed and the
events are broadcast across publicly-funded and controlled airways, and then the taxpayer
has to pay, in terms of time, in terms of commercials. So, the Sochi Games, the winter
games in Russia, are estimated—spend is 51 billion dollars, 51 billion dollars. An
International Olympic Committee official has said that as much as one-third of the 51 billion
has been siphoned off by corruption. And, this is a—kind of a clue as to why governments
really like mega-projects. There' a variety of reasons which we'll get to—but most fundamentally,
particularly sports mega-projects—it tends to dissolve resistance to massive spending.
"Well, it's for the Olympics" or "it's for a stadium" or whatever. So, when something
is emotionally resonate with the taxpayers it tends to lower resistance. And, if you
can also tie in government spending to national pride—which is kind of hard to do outside
of wartime and sports—if you can tie government spending into something intangible, like national
pride, then of course peoples resistance to massive spending goes down.
It's kind of strange, Sochi. It's a subtropical, Black Sea resort where the temperature hovers
at the moment around 10 degrees. There's no snow. It has to be shipped in. If you're going
to run some winter games in Russia, I'm not sure it's wickedly hard to find a place in
Russia with lots of snow in say February, but... How did it become a winter venue? Well,
according to spokesperson, Vladimir Putin, the head of Russia, he likes Sochi. He likes
skiing there. He's building is own palace down there. It is his personal choice and
he is completely behind it.
So, a woman recently made a documentary on corruption in these Winter Olympics in Russia,
was visited by a number of representatives who actually paid her, offered her, three
times the documentary cost not to release it, which she declined and stopped answering
her door. In this documentary, there's a building contractor who was threatened he would be,
"drowned in blood". Uh, no longer a (laughs) Olympic event. He would be drowned in blood
if he refused to pay kickbacks of fifty percent of building costs in Sochi. And, the documentary
also highlights the cost of the Olympics to local people who have lost their homes and
livelihood to construction. It's just this big giant claw Borg that goes through neighborhoods
scooping up peoples' homes and business and so on, and building Olympic junk over them,
which generally falls into disuse and becomes a homeless, graffiti artists, and drug addicts
afterwards. The environmental damage of the Winter Games, particularly in Sochi, is hard
to measure, but has been considered fairly catastrophic. In Beijing, for the recent Olympics,
1.5 million people were displaced. In other words, were shoveled out of their homes to
make way for the couple weeks of athletic excellence.
So, to build a road to the Sochi Winter Olympics in Krasnaya Polyana--it's a mountain resort,
it only hosts the ski and snowboard events—the Russian state spent three times more to build
that road than NASA did for the delivery and operation of a new generation of Mars rovers.
An article in the magazine "Russian Esquire" estimated that for the sum that the government
spent on the road it could have been paved entirely with a centimeter-thick coating of
beluga caviar, but because seagulls don't vote, it wasn't. Now, interesting coincidence...
so, of the fifty plus billion dollars being spent on the Winter Games, about 7.4 billion
of them have gone to a boyhood friend and former judo partner of Vladimir Putin, whose
name is Arkady Rotenberg. And, that's really quite a staggering coincidence when you think
about it. What really are the odds of that happening? Well, in Russia actually close
to 100%.
So, here's some text around the corruption. So, Mr. Mortezav, who is a fairly successful
construction business owner says, "we started building a project in Prynasol"—which is
a beachside area of Sochi—"it was a wing of the presidential resort home. The contract
came to about 47 million pounds. There was an official...," he said, "...who wanted to
be bribed. You pay him a commission, or else. I should have paid him 12% and an additional
5%, but managed to get it down to 3%." He goes on to describe how the money is paid
directly into the Kremlin's coffers. "It works like this. The money is brought to the presidential
administration department. I go to the fifth floor, pass through the security without being
screened..." Yeah, you don't want to screen people who are bribing you. "...and leave
the money. So, he described how bribes went through the roof when the city and region
was declared an Olympic venue. Dozens of major contracts were issued through OlympSoi, the
government-run body responsible for organizing and building the Winter Olympics. And, one
"chenovnik"—Russian slang for a senior official—was told that the going rate for bribes was 5%,
then asked, "What if it were 50%?" Mr. Molavof added, "I realized he was being serious."
The money thrown around by the Kremlin to ensure that Russia would get the games is
also revealed. Cal Shantz, the former Austrian Olympic skiing champion and personal advisor
on bringing the Olympics to Sochi, talks about the big-money lobbying that went into the
games. Cash that Leonardo Chyechnev, former head of Russia's Olympic Committee said was,
"practically unlimited".
So, of course there's physical excellence and amazing athleticism on display, but the
fundamental driver, I would argue politically, is it creates a massive, massive fogbank for
bribery and corruption which is dissolved in peoples generally positive views of the
Olympics and it can be covered up or exacerbated under the cover of nationalism. Wherever you
have big construction projects, and government... big construction projects plus government—they're
always involved even if they're not paying for it directly; issuing all of the licenses
and permits and all that kind of stuff—you just get massive corruption. Transparency
International has long cited the construction industry is the world's most corrupt, pointing
to the prevalence of bribery, bid-rigging, and bill padding. By 2025 are estimates that
the cost of fraud in the construction industry worldwide will have reached 1.5 trillion dollars.
So, not only are governments generally the biggest spenders on infrastructure, but all
of the private projects, you know: worksite inspections, approvals, permits and so on...
all of which are ripe for kickbacks. Now, big one-time projects are super juicy for
corruption because if you just building another road, you have all of these cost estimates
and completed projects beforehand that you can compare the cost to and look for deviations.
When you're building something new, what happens is, it's never been built before and nobody
knows what to compare it to and so you could hide a huge amount of corruption in those
things. And for contractors, bribery is always attractive. I mean, the cost of a bribe is
dwarfed by the value of the contract. This is known as "The Two Lock Paradox" in among
economics. A study by Neil Stansbury, "when a project is really big" he says, "it is easier
to hide large bribes. Most projects involve building something unique, or at least something
that's never been built in that place before; makes it harder to estimate whether costs
are reasonable or not. And, Turkey's construction spree also plays a major role in an economic
quote "boom". China has spent—it really is impossible to estimate how much building
these ghost cities and, of course, governments say, "look at our GDP, look at our construction
industry, look at our unemployment" because you know if you pay a million people to dig
holes and fill them in again it looks like you economy is doing really well. So, for
investors who don't know much about free-market economics and debt and so on... the numbers
will look better when you engage in these mega-projects. But, because they're not fundamentally
customer driven, consumer driven, they are enormous wastes of capital and human capital
too. People get trained to work on particular projects that are unlikely to be replicated
in the same way ever again, which mean all their skills get lost. Another thing that
happens is that politicians like big, flashy, new things. They like cutting ribbons on new
things all the boring work of say maintaining sewage infrastructure which is not particularly
exciting and no politician is going to get a photo op on it. Also, you can get bribes
on massive new projects. You can get bribes and construction going on those big new projects
a lot more than you can on road maintenance and so on; again, in which the costs are generally
well known, and which is not flashy. So, I guess it's a step up that Russian politicians
are now focusing on sports rather than say, invading and dominating eastern Europe, but
nonetheless it still comes from the same kind of place.
So, in the 2012 Olympics, which was in London, there was a security company, G4S, and they
were going to provide security personnel for 444 million dollars, which was ten times the
actual original estimate. I guess, you just lean on that key and you can make a lot of
money. But they said, "well gosh, you know, even though it's a massive recession, times
of massive unemployment, we're just unable to get the right number of security guards".
And so, the army and the police had to then go out and fill the gap, and despite this
failure, this security company got to keep 89 million dollars as a management fee. Nice
work if you can get it. 2004 Summer Olympics has been somewhat credited with—although
the Greek government is a fairly profligate spender in even the worst of times, or the
best of times, or any times in between for that matter—but they did, you know, to join
the Euro currency zone they did actually adopt some austerity measures. (laughs) Austerity
for the Greeks is kind of like telling a guy on a 10,000 calorie-a-day diet that you're
going to cut him to 9,800 calories, and then he claims that he's starving to death in some
low-calorie Hunger Games nonsense. But they did reduce deficits from just over 9% of GDP
in 1994 to 3.1% of GDP in 1999, right before they joined the Euro. Some of that, of course,
was fraud and lies, but some of it was real, but then the Olympics broke the bank and government
deficits rose every year after 1999 peaking at 7.5% of GDP in 2004, the year of the Olympics,
because they spent 9 billion Euros on the Olympics. Now, Greece is a pretty small country.
The cost of housing the Olympic Games was about 5% of the annual GDP of the country.
Now, was there the resulting economic boom? Well, of course there wasn't. I mean, building
giant stadiums for which there is no long-term economic value. You might as well set fire
to the money. I mean, the Olympic torch should be cash and the blood of unborn taxpayers
fueling its fire because that's all it's burning. In 2005, Greece suffered an Olympic-sized
hangover with GDP growth falling to its lowest level in a decade. However, the GDP of individual
construction companies, as well as the Mob, organized crime, and politicians rose extraordinarily
high. Brazil is hosting the 2016 Olympics as well as the 2014 World Cup. To construct
its five-star accommodations to entertain and house the wealthy, it is actually emptying
out entire neighborhoods; and, as I mentioned, 1.5 million folks were displaced for the Beijing
Olympics. You would not want to be a stray dog in Sochi at the moment. They're rounding
them up and disposing of them, for which I think not much detail is being provided.
Now, a lot of the money that goes into the Olympics, of course, comes from taxes, as
mentioned. There are huge amounts of money that are given in grants and subsidies and
so on from governments. And, there are over eighty Olympic committee members who make
over a hundred thousand dollars, but as mentioned, they pay the athletes zero dollars. And now,
a few of the athletes do make a lot of money and end up on cereal boxes, not so much the
steeple chasers, but there is a lot of money for politics. There is a lot of money for
construction companies. There's a lot of money in corruption. And, there's a lot of money
for the people who like to roll around in chauffeurs and the International Olympic Committees.
There's almost no money for the athletes. I mean, I consider that to be pretty egregious.
I mean, it is pure exploitation. It takes 20 years, 15 to 20 years, of intense 3, 4,
5, 6, 7 hours a day training to get to the Olympics. People are only there to look at
the Olympics. They're not there to look at the construction companies, or the judges,
or the committee members, or the politicians. They're there to look at the athletes and
the athletes are the only people who make little to no money from it. This is exploitive
in the extreme and also, of course, since some of the athletic events, not so much at
the Winter Games, but certainly the Summer Games (or the regular Olympics). A lot of
the gymnasts and so on start their training as children. And because they start their
training as children, this is really child labor. This is unpaid child labor that is
being used to enrich governments and contractors to the tune of billions of dollars. I mean,
it makes a Dickensian factory look like Chuck E. Cheese, as far as the exploitation goes
and this is true even for the children who are in a more voluntary situation. If we take
a look at some of the pictures—I will move over a little bit here—we'll take a look
at some of the pictures of what goes on in Chinese training camps. It's pretty, pretty
brutal. While we're looking at those, we'll continue to talk a little bit about what happens
even in the American situations. So, Joan Ryan wrote a book in 1995 called "Little Girls
in Pretty Boxes" and she wrote the following about the system for producing gold medal
gymnasts, "What I found was a story about legal, even celebrated child abuse. In the
dark troughs along the road to the Olympics lay the bodies of girls who stumbled on the
way, broken by the work, pressure, and humiliation. I found a girl whose father left the family
when she quit gymnastics at the age of thirteen, who scrapped her arms and legs with razors
to dull her emotional pain, and who needed a two-hour pass from a psychiatric hospital
to attend her high school graduation, girls who broke their necks and backs, one who so
desperately sought the perfect weightless gymnastic body that she starved herself to
death." So, little girls as young as four or five are recruited and spend their childhoods
in gyms raised by coaches, some of whom behave like Spengalis. These kids are brainwashed
into attempting dangerous tricks, accepting injuries, and pain. These gyms always have
a psychologist on staff to goad or guilt these kids. Parents often don't know what goes on
because they are sometimes banned from the gyms. This is true in the U.S. as it is in
China. The reason female gymnastics is a race against puberty is because once maturity happens
the female body adds 5% body weight, which adversely limits their strength and endurance.
By contrast, male gymnasts can only be developed after puberty because that is when they acquire
sufficient strength to do their tricks. This also means that their careers are not only
post-puberty, but last longer into adulthood. There has been an ongoing *** abuse scandal
in American swimming. ESPN's T.J. Quinn and Greg Amante wrote in 2010, "youth swimming
coaches, many certified by USA Swimming, the sport's national governing body, have been
able to *** young swimmers and then moved from town to town escaping criminal charges
and continuing to victimize other underage swimmers." ESPN found the abusive coaches,
some of who molested young swimmers for more than thirty years, avoided detection because
of a number of factors. USA Swimming and other organizations had inadequate oversight. Many
local coaches, parents, and swimming officials failed to report inappropriate contact they
witnessed. In some parents driven to see their children succeed ignored or did not recognize
what should have been red flags. There is a study with an Australian sample on ***
abuse in sports; out of 370 elite national and club regional athletes surveyed, 31% of
female athletes and 21% of male athletes reported having experienced *** abuse before the
age of 18. Environment-specific *** abuse rates were particularly high. 41% of the sexually
abused female athletes and 29% of the *** abuse male athletes indicated that the abuse
was perpetrated by sport personnel. The sport-related abuse was largely perpetrated by those in
positions of authority or trust in relation to the athletes, primarily coaches, and less
frequently support staff and other athletes; the vast majority, more than 96% of the perpetrators
where men. So, as I mentioned, one study by the USA Track & Field foundation demonstrated,
"approximately 50% of our athletes who rank in the top 10 in the USA in their event make
less than fifteen thousand dollars annually from the sport.
So, sports is an improvement over war and sports, in fact, was considered by the ruling
classes to be an excellent preparation for war. What do sports fundamentally do? It substitutes
geography for value. Right? Why is your team better than some other team?—because they're
closer to you, in the same way that your army is better than the other guy's army because
they're closer to you. It gets you addicted to loving a uniform rather than the character
of the person in the uniform because people can shuffle in and out of those uniforms,
but you must remain loyal to the team. So, it is an empty geographical shell that is
around you that demands and evokes your allegiance. This goes way back to our tribal days, of
course. I mean, all who did not develop an irrational allegiance to those geographically
proximate to themselves in the form of the tribe would usually be expelled from the tribe;
and if all the tribal members didn't care whether it was their own tribe or the other
tribe that won, that tribe would be wiped out. So, we've been selected for bonding,
or an irrational adherence to costumes that are geographically close and that is prepared
for by sports. Hate the other team or dislike the other team or want to beat the other team...
well, this is a fundamental lack of empathy. And don't get me wrong. I love sports. I think
sports are a lot of fun to play. They really are. But we all know, come on, sports Team
A which you then follow—watch Hoop Dreams or, you know, any of the other sports films.
You are just watching that sport team. Those rag-tag bunch of misfits who somehow find
a way to get together with a *** manager to beat the other team, and achieve victory,
and change their lives, and so on. That's Team A. You could take the exact same movie
and go over to the other side to Team B, and you would follow them, and you'd feel exactly
the same thing. Whoever you get emotionally invested in is the person you want to win,
which is why you get all these little intros to these athletes. You know, they grew up
in poverty and, you know, both parents were struck by lightning, but the electricity passed
to the next generation allows them to vault tall buildings with a single bound, and so
on. So, sports has always been a preparation for war and I'm very glad that the world is
having sports events rather than war events, although that has a lot more to do with the
development of nuclear weapons than it does with any particular maturation of the human
condition, but it is really important to understand that it's a completely irrational adherence.
When I was growing up, my local team in England was Crystal Palace which was populated by
a lot of people from Trinidad and Tobago who could barely speak that English, let alone
the Queen's English; and I was supposed to find some massive allegiance because they
mirrored my experience in some manner and they betrayed it next year and next year other
people would come in. So, I'm just supposed to love the uniform because the uniform is
the closest one. I mean, we all understand in our heads. You know, that that's completely
irrational. It's silly. Now, I don't mind people indulging in their silliness, but not
at my expense. Right? I mean, if you want to go worship some local sports team or whatever
and think that they're the best thing since sliced bread, be my guest. You know, just
keep your *** hands out of my pocket through the state when you do so, and don't sell off
my daughter's future to indulge in your silly local anti-rational dangerous tribalism, and
understand, at least with the Olympics, that these are people who were exploited as child
laborers, not paid, for the profit enormously connected rich well-connected largely corrupt
conglomerates, multinationals, and corporations. At least, see the Olympics for what it is;
and then, if you can continue to enjoy it, you might want to look in the mirror and just
ask yourself, "How?"