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Rolling the Dice, Part II

July 24, 2010

The gambling debate is back: The Economist has posted round two of its debate on legalizing gambling.  Once again, I find Leslie Bernal’s arguments highly unconvincing.  Let’s take them one at a time:

Commercial gambling promoters attempt to elude charges of exploitation by pleading it is a “voluntary” act, hiding behind well-intentioned people who argue the case for “personal freedom”. But the business model for casinos and lotteries only works if our government takes away the freedom of millions of Americans. By definition, someone who is an addict or someone who is in deep financial debt is not free. We live in a country where everyone is considered equal. We do not have kings and queens. In America, all blood is royal. So how can the states actively promote a federal government programme that strips freedom from millions of citizens and renders them expendable?

Uhhhh… WTF?  Addicts and people who throw all their money away are now subjects?  This is one of those weird arguments where freedom is defined in some way other than freedom from oppression, like the Steve Jobs argument that the iPad provides “freedom from porn”.  The problem with this line of reasoning is that you can place any word after the preposition “from” and somewhat rationalize it.  The feds are oppressing the poor because they’re not providing them with “freedom from poverty”.  The feds are oppressing jobless laborers because they’re not providing them with “freedom from unemployment”.  And the best one: the feds are oppressing alcoholics because they’re not providing them with “freedom from addiction”.  This is a perversion of freedom — the idea that somehow freedom entails governmental overlords preventing anything bad happening to its citizenry, including those bad things that are a direct result of the poor choices of the people themselves or their ancestors, is a debasement of that which is liberty.  Freedom doesn’t exist to shepherd to weak along the path of righteousness; it exists to allow individuals to pursue that path if they so choose.

Bernal’s other argument is actually fairly interesting, as it applies to more than just gamblers throwing their life savings into the cages at the MGM Grand:

“Foolishness with our own money should not be illegal,” respond those like Les Balko, as if the experience of the seventh-grade English teacher was a result of imprudence. Yet these expendable Americans not only lose their own cash, they also cost taxpayers a lot of extra money. In one of the only independent studies on the costs of predatory gambling, the New Hampshire Gambling Study Commission recently showed that taxpayers will need to fork out an additional $68m in taxes to cover the social costs of one proposed casino, 24% more than the state government will receive in revenue. These numbers are for only one casino—there are now almost 900 casinos in America. It confirms a report by the Rockefeller Institute, a New York think-tank, which found predatory gambling exacerbates state budget deficits over the long term. It also helps explain why the budgets of casino states like California, New York, Pennsylvania, Illinois and Nevada face enormous deficits.

This is actually a compelling idea.  Although conspiracy theorists would have you believe that it’s intentional, prohibition or taxation of certain activity due to social cost is actually an unintended byproduct of the social safety net.  It’s the best justification for a Coke Tax, other than the “we need tax revenue” argument — people who drink lots of sugary drinks are more likely to develop chronic costly diseases like diabetes, which, as people get older, tend to cause a serious rise in their health-care costs, which are subsequently social costs because of Medicare (a source of disagreement in the Coke Tax debate is whether drinking lots of soft drinks results in a phenomenon like smoking cigarettes does wherein smokers remove themselves from the social health-care system by dying before they can collect as many benefits as a non-smoker would).  The same argument can apply to posting calorie numbers on fast-food menu items, tobacco taxes, and alcohol taxes.  Once the state takes financial responsibility for its citizens’ health, then it’s in the state’s interest to keep health-care costs down.  And one way to do that is to keep the citizenry from consuming products that contribute to higher health-care costs.

Bernal has chosen to apply this argument to gambling — the studies he cites presumably show that gamblers are stretching state budgets by collecting more unemployment benefits, welfare checks, and Medicaid than they otherwise would have had they not put one too many tokens in the slot machine.  Okay, fine: but this argument works best when it is opposing the very existence of the social safety net.  If it’s in the state’s interest to tax or prohibit everything that increases social costs, then why doesn’t the fed just ban alcohol, cigarettes, greasy food, whole milk, red meat… really, anything besides green vegetables and herbal tea?  Instead of trying to get rid of everything bad in the interest of keeping costs down, why don’t we just get rid of the social safety net altogether?

Now, I’m no fan of doing away with things like public pensions, unemployment insurance, or government-backed insurance pools for poor people, and neither are the American people.  In the real world, there’s no good way to get rid of or even reduce entitlement spending, which is why initiatives that reduce freedom are more popular than initiatives that scale back those programs.  There must be a balance somewhere between banning gambling and empty our wallets into the state treasury to provide for down-and-out gamblers living on the public tab — the either-or is not good enough.  But only in the world of perverse freedom does it make sense to argue that the taxpayers have a responsibility to provide for somebody who has gambled away his sustenance.  Only a society that believes government has a responsibility to provide its citizens with freedom from poverty can accept that someone whose personal choices resulted in his own impoverishment ought to be buoyed by the public dime.  Freedom has risks, too, and our citizenry should be able to enjoy the benefits and drawbacks of its implications.

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