Tuesday, January 9, 2007

The Big Casino

We pretend to work and they pretend to pay us. – Soviet era quip.

It’s a startup, so we’re mostly being paid in lottery tickets (stock options). – Dot-com bubble quip.

If you read practically any historical material from the time of the Founding Fathers, or a goodly number of years thereafter, the word “Providence” shows up, often in the phrase “Divine Providence.” “Providence” in this context means, “The care, guardianship, and control exercised by a deity.” In other words, divine luck. It fits in nicely with one type of Calvinism that holds worldly success to be a measure of divine blessing, “virtue,” in fact.

America was early on a land of farmers, and farmers are always dependent on luck, for rain at the right times, for a lack of hail or the killing frost, for their fields to escape predation by insects or other pests. It’s very easy for a farmer to be a “God fearing man.”

Even the coming to America was risky; there were no safe passages in the early days, and even the richest men could be lost at sea. Later, when the immigrants flooded in, they were packed so tight on the ships that disease flourished, and any number of physical ailments meant being turned back from Ellis Island. Simply making it to America has always been a matter of some luck.

Life is a crap shoot under the best of circumstances, but the history of America is a history of deliberate risks taken, beginning with the journey itself, then the measures used to “find one’s fortune.”. Sometimes the payoffs were huge, and men became wealthy beyond anything imaginable in prior ages. At other times, the losses were also immense, in mining disasters, fires, and civil insurrections that left the dead littered like so many playing cards on the floor of the casino.

And let’s not even dwell upon the Civil War, which pitted the wealth of slavery against the manufacturing power of the sweatshop and the Yankee trader. The sweatshop immigrants won, probably inevitably, but the cards were well scattered, and chessboards knocked off the tables, and the Party of Lincoln was picking up the chips for the next half century.

Even in strictly monetary terms, every great fortune consumes many smaller ones. John D. Rockefeller once said, “God gave me my money,” which is true, provided one sees God in a network of collusive arrangements with the transportation and distribution networks, aided and abetted by laws specifically written by bribed legislators. Still, God works in mysterious ways, and gamblers of the period also insured that God was on their side, with marked decks, dealing seconds, and nifty little holdout gadgets that could change a deuce to an ace if the need arose.

As time progressed, each generation made laws outlawing the more obviously predatory practices of the previous generation, all the better to invent new ones of their own. Those who reach the castle always want to raise the drawbridge before the riffraff arrive, but the riffraff are mighty inventive, so they keep sneaking in.

The Big Casino is a powerful economic engine. Consider, everyone knows the odds are against them in a casino in Las Vegas, Atlantic City, or your local ad hoc Indian reservation, yet still people go in and bet. The odds of winning the Lottery are even worse, yet there are compulsives who chance even that slim chance for the big score, hoping to get rich enough to change their lives. The sad irony is how often the jackpot winner crashes and burns, unable to cope with the sudden change in altitude.

So imagine how much better the scramble when the game isn’t zero sum? When the pie is expanding, everyone can get a bigger slice, but it’s so much more satisfying to the imagination to crave a bigger slice than your neighbor. Then, with a little help from the circular reasoning of Social Darwinism / Calvinism (the fittest survive, which is to say, the virtuous become rich), one may pretend to be better than one’s fellows, which is what the game is about anyway.

Are personality traits heritable, and does that even matter? The risk taking tradition is a part of American heritage, something to be understood and controlled, if possible, something to recognize and live with, in any case, because it ain’t going away. Nor is it a matter of just passing some laws; risk takers will break the law if the potential rewards are high enough.

On the old Bilko Show (aka “You’ll Never Get Rich”), with Phil Silvers, Bilko manages to get himself to Monte Carlo, where he tries out his betting system and manages to lose all the money he’s been given by his platoon. Out on the balcony, looking horribly depressed, the casino manager suggests he do “the honorable thing” and gives him a gun. Bilko promptly returns to the betting tables and tries to bet the gun.

There are plenty of us who would have instead used it to try to rob the casino. I mean, really, they were just asking for it.


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