Gambling, Economics, and Morality

Is gambling a sin? Is it immoral? The definition of sin, from a theological position, this essay leaves to the theologians, and the ultimate value of gambling it leaves to the conscience of the individual. It examines, rather, the nature and result of gambling from the economic viewpoint. This we feel can be of practical help to both theologian and layman in clarifying their personal concepts.

Gambling is a timely topic. Not only is its influence growing on a commercialized scale in our economy, but some political leaders are even proposing a national lottery. Such a lottery, they say, would provide people an opportunity to exercise their “natural” proclivity for gambling. The argument is supposedly strengthened by their advocating that the proceeds be used to reduce the national debt. This is indeed a captivating “package deal,” one that combines legalizing “natural” human inclination with a desired national objective. It almost tempts one to lump G. B. Shaw’s explanation of the popularity of marriage with the adage that two can live as cheaply as one.

Like most other package deals, this one requires careful study. Actually we need to examine only one component, however. We need not debate the desirability of retiring the national debt. If it is a bad thing to retire the debt, then, of course, there is no point in discussing methods. If it is a good thing, then we need to examine carefully the method under consideration. After all, if we were not concerned about means and their short- and long-run effects, we could well justify war, infanticide, or genocide as solutions for overpopulation. This brings us to the issue at hand.

What is gambling? The proponents of legalized or commercialized gambling often say that life itself is a gamble, with its unknowns of birth, marriage, career, and so on. Such an approval, of course, is absurd and arises from inability or unwillingness to conceptualize the idea or define the nature of the process or action. It is here that the economist can be of greatest assistance, for long ago economists differentiated between gambling and other forms of risk-taking. Those who define the natural risks of life as gambles are guilty of “fuzzy” thinking at best, careless or deceptive thinking at worst.

The economist, of course, is mainly concerned with making distinctions as they apply to the economic world or to the business community, but his thinking can be applied consistently to the facets of social life as well. Nowhere does he find compatibility between gambling and the necessary and beneficial risk-taking of economic life, or of social life. The two concepts are not only incompatible but are diametrically opposed and mutually destructive as well.

How does the economist make these distinctions as they apply to the economic world or to the business community? First, he defines gambling as unnatural or artificial risk-taking. In other words, risks are created purely for the purpose of taking the risks; they are not inherent in any economic or business situations. Horses are run, wheels are spun, cards are dealt, coins are flipped, dice are rolled, specifically to flirt with the laws of probability in the hope that the smile of fortune will beam upon the lucky suitor.

But what of the non-gambling forms of risk-taking in the economic world or in the business community? What about the natural or real risks inherent in all economic and business situations? These are generally summed up under the general heading of “speculation.” Now, true “speculation” has often suffered from misconceptions. Speculation is often, one might say, considered an evil or wasteful activity. Nothing could be further from the truth, for only when speculation is associated with deliberate fraud are such adjectives valid. Speculation is someone’s taking a risk which must be taken by someone.

Unfortunately, one can easily be misled into the notion that speculation is evil and wasteful, while regulated and legalized gambling is good and natural. We intend to demonstrate that just the opposite is true when accurate concepts are developed and logical thinking is followed. Let us take a few examples from the economic world to see how such conceptualizing and logical thinking apply. Someone buys a piece of real estate from someone else. It is inherent in the situation that the value of the property will rise, fall, or remain constant. This risk must be borne by someone. If the value rises the buyer may realize a gain; if it falls he loses; if it remains constant he has had the doubtful privilege of tying up his capital in an unproductive investment, plus other doubtful privileges such as paying taxes and looking after the property.

Or take the case of the farmer who plants a crop. Any number of things may work against him before the final harvest is sold, or at a certain stage of growth he may sell the crop in the field and pass the risk remaining on to someone else. Depending upon how much risk he is willing to take and upon how opportunely the situation develops, the farmer tends to lose or gain accordingly. But in order to pursue an activity presumed to benefit himself and his fellowman he must bear some risks. Because of his risk-taking and that of other farmers, people have wheat or cotton, and he and farmers generally have more or less income with which to purchase those necessities and comforts which others, in turn, have taken a risk to produce.

What of the laborer? you say; he takes no risks. Today thousands, perhaps millions of laborers face the loss of jobs in which they have developed skill and gained experience over much of a lifetime. Overnight, automation may render obsolete many of these skills and much of this hard-won knowledge. There are risks, pure economic risks, in going into any kind of a job, profession, or calling. Suppose these laborers had decided to take no risks on any job because of what might happen. How could society have been fed, clothed, or transported until automation? What is more, the risks taken by laborers along with other elements of the economy provided the materials for automation.

Every business enterprise, from its inception to decline, is fraught with innumerable risks, which must be faced from day to day. Dame Fashion is fickle, government unpredictable, competitors ruthless, labor often unreasonable. Machines or products suddenly may become obsolete. Where would we be today if businessmen took no risks? But businessmen, or as we say in economics, “entrepreneurs,” do take risks of unbelievable number in the hope of great gain. And whether they win or lose, a balanced society stands to gain. Any entrepreneur would consider a proposal to create artificial risks for him a demonstration of pure insanity. He has enough risks to last several lifetimes.

The professional speculator does not gamble in any sense of the word. To be sure he pits his skill and knowledge against the inexorable forces of the market as he tries to guess which way the market will move. And he must be right more often than he is wrong in order to succeed in his calling. But in every case of his buying and selling he is undertaking risks that someone else would have to take if he did not do so. In the well-ordered securities and commodity markets and in the money markets of the world this is invariably true. We are not concerned, of course, with the question of fraud, because fraud is not the exclusive opportunity of the speculator; when allowed, it infects every facet of social, political, and economic life. But without going into the technicalities of the matter, which can be studied in many good textbooks, we may say that the professional speculator makes it possible for people in other lines of business and production to hedge. Hedging allows many producers to eliminate the risks of market changes; by taking positions on both sides of the market, they can concentrate their energies on meeting the natural risks of their own particular business without having to speculate in markets for which they have insufficient skill or knowledge. In addition, the professional speculator helps reduce price variations by buying when demand and price are low and selling when supply is low and price is high. Thus he serves a very useful purpose in society: he protects other producers from the vicissitudes of certain markets, thereby encouraging them to go ahead with their production plans. He also provides a measure of order and stability in the markets of the world, thus making possible the carrying on of the world’s business.

The insurance business is not a betting business, as some assert. It is simply a sophisticated and professional method for sharing risks of certain and uncertain events. We know with close approximation how many in a certain age bracket will die by a certain time or how many will live to collect retirement income. We know how many fires or accidents will occur, but not to whom. When one insures against a contingency he is not betting against an insurance company. He is merely using the facilities and services of the company to share his risks with other individuals in like circumstances. Insurance is sharing risks that are inherent in life or economic situations. No competent person would artificially create risks so he could insure against them.

How about some life situations not immediately of economic or business concern? Take Columbus, for example. Didn’t he gamble? Of course not. He took chances, yes. But the reason for his venture was not to take chances. He had an entirely different goal, to look for a new and better sea route to the East. Whether he hoped for profit, glory, or favor with those in high places is irrelevant. He hoped to achieve a certain goal, and the risks were inherent in that goal. He took them. Think of the results as you sit in your soft chair, reading these words, sipping excellent coffee, and listening to the muted pleasant tones of your hi-fi.

Then there are many ordinary life situations. We take risks as we go to work or school, play games, marry, beget children, and so on. But we do not take the risks of going to work, marrying, or begetting children for the sake of taking risks. We are not gambling; we must take these risks in order to get on with our jobs. These jobs must he done if we are to survive and if we are to do the world’s work, pursue our goals, and fulfill our mission as best we know how. Divorce statistics show just one of the many risks of marriage and child-rearing, but we continue to create homes because we feel that the potential rewards of happiness and purpose far outweigh the risks. We allow our children to take the many and often unforeseeable risks of going to school, or going away to school, because we know the need for educating minds and developing bodies. There is even some risk in going to Sunday school on a beautiful Sunday morning!

Think of the risks that the steeplejack and the sandhog take with their lives; if they did not, how many buildings would be built or tunnels dug? Or take the surgeon, the policeman, the judge, the soldier, or the politician. They have many disagreeable tasks to perform. If they did not fulfill them, organized society could not endure, and civilization would perish. Are they gambling when they take the risks inherent in their callings? Of course not. We can safely assume, further, that none will accept any risk not necessary for the achievement of his goal or performance of his task.

One cannot presume to speak for the Creator on such matters. But one can surmise or infer from the observable conditions of life that all of the risks inherent in life are for a purpose. The finite mind can certainly reason that far. What then is the purpose of inherent risk? Perhaps it is intended to develop man’s moral, mental, spiritual, and physical faculties. But one thing is sure: there are enough risks in life to merit using all one’s energies for good, useful, and productive purposes. Is gambling a sin? Is it immoral? Again we leave these answers to the theologian or to the individual conscience. But we hazard a judgment on the matter, nonetheless. To create artificial risks when the Creator has been more than bountiful in providing inherent risks in all the experiences of work, play, and so on, borders on pure lunacy. It would seem that those who create and take artificial risks which produce nothing of value are simply withdrawing from that reality of life where the truly challenging and productive risks abound.—ARNOLD E. BARRETT, associate professor of economics, University of Alabama.

Preacher in the RedFor each report by a minister of the Gospel of an embarrassing moment in his life, Christianity Today will pay $5 (upon publication). To be acceptable, anecdotes must narrate factually a personal experience, and must be previously unpublished. Contributions should not exceed 250 words, should be typed double-spaced, and bear the writer’s name and address. Upon acceptance, such contributions become the property of Christianity Today. Address letters to: Preacher in the Red, Christianity Today, 1014 Washington Building, Washington 5, D. C.

SCANT COMFORT

In the summer of 1958, I was appointed as assistant minister in a large congregation a few miles from Belfast. On my first pastoral visit, I called with an old lady who had injured her foot on a loose kerb-stone. Fortunately, she saw the amusing side of the picture as I read from Psalm 91, “They shall bear thee up in their hands, lest thou dash thy foot against a stone.”

Determined not to repeat such a silly mistake, I chose on my visit to another house to read from Psalm 121. You can imagine my embarrassment when I realized, too late, that I had just read the words, “He shall not suffer thy foot to be moved,” to a man whose foot had recently been amputated.—The Rev. D. H. ALLEN, Coleraine, Northern Ireland.

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