For my Idaho readers, we have a measure on the ballot coming up in a few weeks that would reboot Idaho horse racing. What shall we make of that? The measure (Prop 1) would set a minimum number for horse races, would allow betting on those races, and would allow the installation of horse-race-betting machines all over the state.
For many Christians, there is a temptation to analyze such issues on a fairly superficial basis, whether for or against. Either the horse racing and the associated gambling is thought to be kind of a seedy activity, which it is, and so conservative evangelicals are suspicious and inclined to be against it, or they look at their Bibles and do not anywhere find a prohibition of horse racing, or a law against betting on horses, and so they strike a libertarian pose. What would Moses do?
But the issue is not horses, or gambling, or gambling machines directly. The issue is the nature of man.
Even the opponents of this measure argue against it by saying that the revenue coming to the state (for the public schools! for the children!) will not be nearly as great as promised. So even the opponents seem to grant that if horse racing turned out to be a cash cow for the public schools, then this would at least be an argument in favor. But it is exactly the opposite.
We should begin with the obvious. In a free country, people should be allowed to have fast horses. They should also be allowed to find out who has the fastest one. And also, assuming there are those who have an eye for horseflesh, and money in their pocket that they were tired of, such individuals should be allowed to demonstrate their tenuous grasp of statistical likelihoods. So if we are talking about the activity itself, and only the activity itself, I don’t think the magistrate should take any interest in prohibiting it.
So that’s a vote for Prop 1 then, right? No, not exactly.
In this measure, the state of Idaho receives part of the take. Opponents say that the take will not be all that big, while supporters may be envisioning every public school in the state receiving a fresh coat of paint. But I want to know what we are assuming if we make the magistrate the beneficiary of poor financial choices being made by numerous citizens. That’s right, we are setting up a system of perverse incentives.
Paul teaches us in Romans that the magistrate is to reward the righteous and punish the wrong-doer. That is the magistrate’s assigned task. He is not supposed to establish a revenue stream from the foolish. That responsibility was assigned to him nowhere.
Take the related example of state-run lotteries. Private lotteries supposedly entice and enable off grid organized-crime-types who run big gambling operations, and so we have opted to turn it all over to a group that cannot be corrupted—state functionaries! Heh. As someone has wisely observed, lotteries are a tax on people who are bad at math. That tax falls disproportionately on the poorest citizens, citizens who are really susceptible to the temptation to buy “that one ticket out.” The state then establishes a revenue stream from these sad individuals, and what do we now have? We have a financial incentive being paid to the state, an incentive that does not want the downtrodden to ever come to their senses. If they ever were to come to their senses, the revenue dries up. Put another way, we have not gotten rid of organized crime; we have only given them new offices.
Here are a couple of other examples of perverse incentives, one ludicrous and the other just as ludicrous, but not imaginary. Suppose you had a school where the teachers were paid a ten dollar bonus for every time they gave a student a pink slip and sent him to the office. Suppose further that it was set up in a way that meant the determinations of the teacher were hardly ever challenged. Now have we made the reign of justice in the classroom more or less likely? Right. If we understand the nature of man, we do not want to have anything to do with perverse incentives.
This is because you will get more of what you subsidize and less of what you penalize.
On that principle, we want to penalize motorists who blow through red lights, and so we levy traffic fines. But never forget that there are people on the other end also, people on the receiving end of the traffic fine. How many police departments now have cameras set up at troublesome intersections, and an automated system of mailing out tickets? We have a lot of them. But remember, people are on both ends of this. We now have a police department that is dependent upon a revenue stream coming from this particular source, and so we therefore have a police department that now needs a requisite number of motorists to ignore the yellow. We have gone from police who want you to knock off the reckless driving to a police force that needs you to step up the reckless driving.
So back to the horses. Prop 1 is a statist proposal. It is not a proposal that will increase liberty, but rather just the reverse. In effect, it makes the state of Idaho part of the house, buying them off with a portion of the swag. On top of that, it makes the state of Idaho far less interested than it ought to be in the prospect of the citizens of Idaho becoming a virtuous and liberty-loving people.
It is part of our ongoing corruption. Nothing good will come of it.