John Rapley

The American Pele? So his countrymen like to describe Freddie Adu. The first time I heard it, I snickered: as if there could ever be another Pele, I told myself.

But while in Ottawa for some meetings last week, I took in the FIFA Under-20 World Cup, and I had to confess that perhaps my dismissal needed reconsideration. After all, it isn't often that somebody whose name doesn't happen to be Zidane succeeds in making Brazilians look foolish on a football field.

Pele was 17 when he made his world debut. So is Adu. But the Ghanaian-born star probably faces a future different from what Pele did when he stunned the world with his prowess. Back in the 1950s, footballers played the club game close to home. Today, world stars migrate to the rich markets of the world, and Adu may in time be no exception.

Should he end up in one of the plum European leagues, he will be riding the globalisation wave. Football has been one of the most successful industries when it comes to adapting to the global age.

Evidence of this success can be found in surging prices. Transfer fees and contracts set new records each year.

Rush on European market

Meanwhile, billionaires from around the world are rushing into the European market to bid up the prices on prized clubs. To recoup their investments, they build bigger stadiums and raise ticket prices. Still, the seats fill up.

Are we seeing runaway inflation in world football? Or are we instead witnessing what globalisation advocates call its greatest virtue; namely, its ability to connect suppliers and buyers of goods and services around the world to maximise efficiency and, thus, output?

Those who argue the first case suggest that excess enthusiasm will eventually drive prices so high that fans will stay away. But those who argue the second case maintain that high prices merely reflect quality; that is to say, we're all willing to pay the higher prices since Europe's best leagues are arguably producing the best football in history.

It is not just football club owners who ponder these questions. It preoccupies central bankers around the world. Though so-called core measures of inflation in the world's major economies seem to remain in check. The fact is that inflation is rising globally. Prices on such things as energy and food, as typified by this week's oil price rises, keep on rising.

Topic of debate

The possible cause of this inflation is the topic of some debate. Optimists say that the inflation is just evidence of the success of globalisation. With economies growing all over the world, demand is rising. In the short term, this will drive up prices. But given the efficiency of the global market, new supplies will soon come on stream to meet this demand, and prices will level off.

Pessimists disagree. They worry that central banks, eager to stave off recessions in the industrial countries early in the decade, overshot and released too much money into the world economy. That money has been bidding up prices on assets, bonds, stocks, real estate and commodities, and will eventually leadto rising consumer prices.

More recently, central banks have been trying to mop up this liquidity by raising interest rates. Their calm, measured approach may be born of a genuine confidence that they have the world economy well under control. Certainly, consumers and investors, in their buying decisions, continue to show supreme confidence in their central banks.

A bad inflation reading from one of the major economies, particularly the U.S., could shake this confidence. But for now, central bankers have the swagger of a U.S. Pele.