By Benjamin Seevers
The PGA Tour and the Saudi-owned LIV Golf are seeking to move past their cutthroat competition and merge together, but United States regulators are stepping in and framing the potential merger as a threat to US sovereignty and an expansion of Saudi Arabian influence, citing the Saudi regime’s brutality and alleged involvement in the 9/11 attacks.
In questioning representatives of the two companies, Senator Richard Blumenthal stated, “Today’s hearing is about much more than the game of golf. It’s about how a brutal, repressive regime can buy influence—indeed even take over a cherished American institution—to cleanse its public image.”
While the “cleanse its public image” part is not obviously true, does Blumenthal have a point? Senator Rand Paul seems unconvinced, saying that Congress has “no business” involving itself in the merger. Sen. Rand Paul further states that the Constitution affords protections for these kinds of agreements and that Congress should start taking liberty more seriously.
Additionally, Sen. Rand Paul calls out Congress for hypocrisy. Congress is perfectly fine with selling weapons to the Saudis, yet a merger between American and Saudi golf organizations is a cause for concern. The arms deal had no hearing, yet a golf merger does. This is absurd.
Furthermore, Ron Price, chief operating officer of the PGA Tour, gave an excellent argument for the merger. Price responded to questioning by Senator Josh Hawley by saying:
Senator, we faced a choice. One was to allow professional golf to be taken over and operated by the Public Investment Fund of the Kingdom of Saudi Arabia. The second was to allow the PGA Tour to continue to lead it in accordance with our mission and our values, for the benefit of our players and charity.
Essentially, the Saudis could own all of professional golf, if they wanted. This merger is designed to prevent the downfall of the PGA Tour, consequently preserving American influence in the sport as the Saudis dump money into acquiring talent.
The flight of talent away from the PGA Tour is not a minor concern. Massive personalities such as Phil Mickelsonleft the PGA Tour for LIV last year in 2022. This is part of the competition that LIV brought to the table. The potential merger was met with positive remarks from former PGA Tour personalities like Mickelson perhaps because it might enable Mickelson and others to return to the PGA Tour while also maintaining a relationship with LIV.
LIV should be welcome competition. The PGA Tour, once accused of being a monopoly itself, was brought to its knees by a startup (albeit a well-funded startup). Although LIV may be a foreign company with political backing, it is a company nonetheless and must be allowed to compete as such. To prevent it from doing so would itself necessitate government action on the part of the US. It would also restrict the voluntary trade between the Saudis and American citizens, the very people Congress alleges to represent.
In a system of free trade, foreign governments will undoubtedly have their hands in affairs. That is to be expected, but it gives no basis for US intervention. The Saudis’ actions are equivalent to China subsidizing the production of goods. If another country wants to flood our country with discounted goods, they should be welcomed. In this case, if the Saudis want to provide Americans—and the world for that matter—with an alternative source of golf entertainment, then they should be free to do so.
Defenders of the free market are right to protest government interventions. In fact, the best course of action is for the Saudis to privatize LIV, an action that would constrain LIV’s budget, leading to the PGA Tour regaining some of its dominance. However, to advocate for the government to intervene in this merger necessitates the use of public funds, money that would otherwise be used in different, more productive production processes.
People should choose to patronize LIV in the absence of state intervention. If they really care about the LIV being state-owned, then they should boycott it, but this should be done voluntarily, not coercively by government edict.
Private force against the Saudis may even be permissible, but when the US government takes action, it forces disinterested parties to bear the cost of bringing justice.
Further concern was expressed in how this merger will impact the ability of PGA Tour executives to criticize the Saudi regime, but why is this a concern? The PGA Tour should not be expected to speak against the Saudis.
Sen. Richard Blumenthal said during the hearing that he hopes the PGA Tour can resist the “bucket full of money” and stand up for the families of victims of 9/11. Why should the PGA Tour care about that? Rectifying 9/11 is not the business of the PGA Tour, and they have no obligation to right any injustice for which Saudi Arabia is responsible. It is not the job of business leaders to be political activists. Based on the way Blumenthal spoke about 9/11, you would think that the PGA Tour played some role in the attack as well. How laughable.
This is reminiscent of the “social responsibility” doctrine, which states that businesses have an obligation to forgo profits for the betterment of society. In this case, the betterment of society is justice for victims of the 9/11 attacks. The PGA Tour is expected to forgo the survival of their business for righting a wrong it had no role in committing. As Milton Friedman stated, business is for using “its resources and engag[ing] in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” Essentially, business is for business, not for giving 9/11 attack victims justice.
Ultimately, this merger will help preserve the existence of the PGA Tour despite immense Saudi competition. The competition that LIV brings to the market will enhance the welfare of the consumer, not hinder it.
In the words of Sen. Rand Paul during the hearing on this matter, “I find no grounds for government to be involved in the game of golf.” As the final plans for the merger materialize, Congress should listen to Sen. Rand Paul.
About the author: Benjamin Seevers is a Mises Institute Fellow and holds a BA in economics from Grove City College. He will begin his PhD in economics at West Virginia University in fall 2023. His research interests include private governance, public policy, and libertarian ethics.
Source: This article was published by the Mises Institute