From Free Life No 21, November 1994

I am not by a nature a gambling man but I uphold absolutely the right of my fellows to risk their all on anything from baccarat at Monte Carlo to bingo in Scunthorpe. Gambling for high stakes strikes me as a perfectly defensible activity - all the more so in that it offends the Guardian-reading classes.

The present Tory administration has hit on the idea of a national lottery as a way of funding Good Things like the arts, sport, and heritage. The notion of harnessing the lust for Mammon with seemingly more lofty pursuits certainly seems a clever, free-market sort of thing to do.

I have been asked to give my opinion on a collection of essays in favour of the Lottery Promotion Company, one of various groups jostling for some share in running a national lottery. Generally, the writers plugging this group are pro-laissez-faire in political orientation and have a sound distrust of government.

All good stuff, and the presence of such figures as Sean Gabb and Chris Tame bodes well. Many of the essays contain lucid and persuasive arguments against heavy State involvement in the arts and sport, and State activity generally. I can certainly recommend this publication to those interested in the details of the lottery argument.

The book starts with a preface by noted free-market taxation and economics writer Barry Bracewell-Milne. This is followed by a contribution from Dennis Vaughan, the executive director and leading light of the Lottery Promotion Company. There is then a substantial chapter by Sean Gabb, which looks at the case for charitable status of a lottery, the values of good causes and the issue of privatising patronage. Malcolm Hutty next gives an economic analysis of lotteries. Juan Gamecho does the same, though from a Keynesian point of view.

After this, Chris Tame explores the broader moral and philosophical implications of lottery funding, while Jackie Clarke and Richard Treister set out appendices on the earning potential of tourism and sport.

The strongest argument in favour of the lottery proposed in this book, it seems to me, is that made by Chris Tame: charitable lotteries show the value of intermediary institutions, which stand apart from the State; they are preferable to the system currently operated by the Arts Council and its equivalents, which like most bureaucratic bodies, are easily captured by groups with a particular agenda. The hi-jacking of many state-funded art galleries by modernists, with their bricks and daub-paintings, is a salutary case in point of the problems with the Arts Council. A lottery then can be seen as part of an attempt to revive the virtues of independence and private patronage of good causes. If the lottery replaces state aid for the arts and sport, then the lottery will have proved its worth.

Sean Gabb broaches the whole issue of privatising patronage, which would be a welcome and overdue benefit of a national lottery. If people could recognise that quality and beauty need not rely on taxation, which is merely a form of legalised thieving, but on private sources of money instead, a valuable propaganda point would have been made. Our 19th Century ancestors, particularly the wealthier ones, played a huge role in funding much of the heritage and artistic riches we take for granted today. But a national lottery would allow even the lower paid to feel they were voluntarily supporting Good Things.

I am not qualified to discuss the exact details of which lottery system would work the best, other than to offer a general outline of my ideal form. It would be privately-run, in competition with other gambling ventures and be totally free of taxation. Equally vital, choices over what to do with the proceeds of a lottery would be entirely a matter for the lottery bosses. If their choice to fund a football stadium instead of a national art gallery were unpopular, then the free market would rapidly sort any problem out as different lotteries with different spending priorities emerged.

I am worried, however, that a national lottery would easily become a target for the taxman, and further, that politicians would seek to interfere with the spending decisions of the lottery organisers. Presumably, the decision to approve a particular lottery group will ultimately be made by politicians. If a national lottery were to be given charitable status, the terms of any exemption from taxes would be set by government - and this could provide an excuse for some kind of control. There would be the risk for example, of a lottery losing charitable, privileged status because it was being used to fund politicised arts. The national lottery run in a free-market way needs to be understood as an essentially Fabian-type venture: a gradualist attempt to wean certain activities from State-funding.

A real problem with charitable status, which I do not think is adequately faced in this publication, is the whole idea of what a "good cause" actually is. Malcolm Hutty, at the end of his contribution, writes:

Only the good causes can justify the establishment of a lottery with legally-enforced monopoly privileges. It is therefore essential that the whole monopoly rent is devoted to the good causes.

Oh dear. I can hear the grinding of libertarian teeth over the expression of "good causes". I think a "good cause" is blues, rock n' roll, jazz, classical music, art galleries, efficient trains and comfortable sports facilities. Others may vehemently disagree that such things are "good causes" at all. It is difficult to justify substantial privileges and monopoly power on such an ambiguous base.

The problem is that is bidding to be the organiser of a monopoly with substantial privileges will involve a degree of power and influence. Monopolies which derive their position from regulation and government power are dangerous and should be avoided where possible, however benevolent they may at first appear. So although I admire the libertarian thrust of this publication, I have reservations about any attempt to create another monopoly - let's have a good old free-for-all instead!

Another gripe of mine is that this publication is the sort that would have been better if it had been written by one author. I am not always clear what the book was trying to do: plug a particular lottery bid or make points about privatising patronage in general. I think a book attacking State patronage and supporting alternatives would have been a more coherent exercise. Goodness knows, the idea that only quality can survive in the arms of the State needs to be laid to rest once and for all.

The Best Lottery in the World? is available from the Lottery Promotion Company Ltd, 41 Floral Street, London WC2E 9DG.