Gambling to Save New Orleans
Changing one law can prevent the city's continued decline and fall of New Orleans. The edict that must be removed is the monopoly on gambling held by Harrah's casino. The rest is forced underground. The day to allow completely free gambling in New Orleans is far overdue. There would be perhaps a dozen or more casinos offering low-skilled, high-paying jobs to the residents of New Orleans. FULL ARTICLE
Comments (40)
Just before Katrina, the Federal Trade Commission intervened in a merger between two casino operators, ostensibly to "protect competition" in the Baton Rouge market. Louisiana allowed only two full-service casinos to operate in East Baton Rouge parish, and the merging firms owned both. The FTC forced divestiture of one casino to a third company that it approved. Not once did the FTC blame the state's licensing monopoly for the decline in competition, as opposed to the nominally private casino operators.
You can read a longer report on the FTC's case here: http://voluntarytrade.org/newsite/modules/mydownloads/visit.php?cid=6&lid=56
Published: May 19, 2006 8:15 AM
"The argument of immorality and crime brought by gaming industries cannot be justified. If anyone knows a city more morally bankrupt than New Orleans … please inform me"
This doesn't actually prove that it can't be made worse. I also have serious doubts about gambling as a form of enterprise since it seems to me that, unlike the normal theory & indeed practice, owners of casinos don't get rich by creating wealth but merely by moving it around.
However, given the existence of 1 casino, the argument for allowing competition. I couldn't possibly say why one individual has been allowed to retain a monopoly but would not exclude the possibility that the moral bankruptcy of its government may play a part.
Published: May 19, 2006 9:03 AM
A free market without a moral standard is destined to enslavement. De Tocqueville said it best when he said that America was great because it was "good" and when it ceases to become good it will cease to be "great."
Freedom isn't free. Freedom requires integrity. A business that feeds upon the individual's commitment to addiction has no integrity.
I am a Libertarian only to the point that freedom hits the wall of integrity. This is why I say that pure Libertarian thought is the door to anarchy and chaos and why I have had to circumscribe my political view within the bounds of limited government.
If humankind were prone to self-discipline and self-reliance and doing good to all people, Libertarianism might work. History sadly proves that when given the opportunity, evil will prevail, unless good men do something.
The Mises Institute has so much good to offer, but this article was truly disheartening to read. It demonstrates how one's strength can truly become one's weakness.
It illustrates the fatal flaw of Libertarian thought.
Published: May 19, 2006 9:08 AM
Cherilyn, I don't see where government does anything to protect morality, or how government can indeed move people to lead more moral lives - IMHO it can't.
The article explains rather well, how there IS a casino in NO, i.e. how anybody who cares can and will gamble. The really sick thing is that government colluded with the Chosen casino owner, thus making him rich but precluding everybody else from the same opportunity. It's indeed fascist.
I don't think I will abandon my anarchist views, but maybe you would care to explain how government can and could make society more moral than anarchism, in your opinion?
Published: May 19, 2006 9:22 AM
If I were Harrah's, I would pay whatever it took to keep the law as it is.
Published: May 19, 2006 9:28 AM
Freedom isn't free.
No, it requires that someone pay for security, primarlity in the enforcement of property rights. Libertarians simply believe that security should be paid for the same way that people pay for everything else -- privately and therefore voluntarily.
This is why I say that pure Libertarian thought is the door to anarchy and chaos
Anarchy, yes. Chaos, no.
I realize that it takes a while to accept the idea of decentralized, spontaneous order, but it represents the pinnacle of economic science.
Government doesn't really eliminate this kind of decentralized social order anyway. It exists apart from and as a parasite on private society. Decentralized, spontaneous economic order exists regardless of what governments do. It is a force (and form) of nature.
That is why trying to use government to force people to act with "integrity" is a fantasy. It's like trying to control price volatility. All you end up doing is shifting these effects into other areas, while increasing overall costs for your trouble.
Published: May 19, 2006 9:29 AM
A quick look at the war on drugs or the welfare state's effect on families should immediately dispel any notions that government can somehow safeguard moral integrity. Arnold Kling has a good article on the state vs. family values at http://www.tcsdaily.com/article.aspx?id=051606A
Published: May 19, 2006 9:51 AM
Thank goodness we have several hundred bribe-taking, war-loving adulterers to teach us morality.
- Josh
Published: May 19, 2006 10:40 AM
Josh:
Don't forget druken, drug taking, racketteering, racists as well.
Published: May 19, 2006 10:55 AM
"owners of casinos don't get rich by creating wealth but merely by moving it around."
Like real estate agents, stock brokers, all sales people?
Published: May 19, 2006 10:56 AM
From post-Saddam Iraq to Somalia to post-Katrina New Orleans, anarchy appears to have failed every field test. The result is always the same: a substantial number of people resort to banditry, while the more intelligent organize a hierarchy to preserve order and defend their property.
At the end of the day, market exchange takes place because people with guns have been hired to enforce the rules of the consensus, whether they're with the US Army or with Blackwater Group. In anarchy, the rules will be set by whoever can hire the best mercs. I have no doubt that Bill Gates and Warren Buffett would be more benevolent than George Bush, but then again they may not.
"...maybe you would care to explain how government can and could make society more moral than anarchism, in your opinion?"
I really don't see the difference between having a democracy decide what is moral or immoral and the market, the ultimate democracy, deciding what is moral or immoral. It's worth noting that the market, left to its own devices, produces brothels, swingers' websites, pornography, and hit men.
Published: May 19, 2006 11:16 AM
Edit: Market exchange takes place b/c two or more parties value the exchange over the status quo ante. The exchange is protected from those who would force involuntary exchange by people with guns. The age-old question of course is how to guard the guardians.
Published: May 19, 2006 11:32 AM
Neil,
“I also have serious doubts about gambling as a form of enterprise since it seems to me that, unlike the normal theory & indeed practice, owners of casinos don't get rich by creating wealth but merely by moving it around.?
But Neil, what is wealth? Would it surprise you to know that there are people who will claim that iron is more valuable than gold because you can fabricate more useful things with it, in their opinion, such as shovels and machines? Yet they have paid the market rate for gold wedding bands and jewelry (they haven’t studied economics, but they are not fools either).
It turns out, wealth is what people’s subjective values tell them it is, in conjunction with a resource’s scarcity. Although gold doesn’t make for good shovels, it is never the less, valued at $700 per ounce today. Similarly, although you and I may not value gambling like some do, it is plainly as much a good or service as is anything else that you and I do value. And this is the case because it is scarce, and (some) people value it.
Published: May 19, 2006 11:35 AM
What I think Cherilyn doesn't understand is that government is made up of people too. If it is human nature that there are those who take advantage of addiction, government will do exactly the same thing. Methadone comes to mind.
The vast idiocy and hypocrisy that is "The War On some Drugs" is an excellent example. The established players, such as Jim Easton points out above, ensure that there is sufficient graft being shoveled into the pockets of those with power to corrupt saints. And far less than that is required to corrupt mere people.
So posesion of a gram of cocain gains a greater penalty than killing a cop. Gee, cops begin to die like flies.
A common weed used to make paper and rope becomes so demonized that our prisons are now overflowing, a greater volume of imprisoned people than anywhere else in the world, many of which if not most have never harmed anyone else.
Just because the subject is "gambling" doesn't change the arguments. Some people think it's immoral, therefore demand the state stop it.
If the alternative to mass imprisonment, economic stagnation and living in fear of a knock on the door in the middle of the night is "chaos", then BRING IT ON!
Published: May 19, 2006 11:48 AM
Reactionary, you again confuse anarchy with chaos. An-archy has nothing to do with either Katrina or Iraq. Both have become disasters because of government intervention.
Who owned the levies that broke? Government. Who moved in with tanks and troops to remove local enforcement of local law in Iraq? Government.
The foundations of your opinion are false, the rest is false too.
Published: May 19, 2006 11:51 AM
Cherilyn,
“If humankind were prone to self-discipline and self-reliance and doing good to all people, Libertarianism might work.?
And if politicians and bureaucrats were super-human, statism might work. There is no option to have perfect leaders tell us how to lead, and make us lead upright lives. The choice is between the imperfect individual making his own choices in his own life and being free from the aggression of others, versus having very decidedly imperfect leaders impose their will, and aggressing against all others.
Published: May 19, 2006 11:52 AM
"From post-Saddam Iraq to Somalia to post-Katrina New Orleans, anarchy appears to have failed every field test"
It was precisely government action, central planning, and military intervention that created each of those scenarios. I can’t speak for everyone, but I think most readers here who call themselves anarchists don’t equate anarchy with lawlessness. They believe in institutions to protect lives and private property, and that private institutions would be more efficient at that than governments with a history of infringing on peoples’ lives and property. The above situations are examples of government-imposed lawlessness
"I really don't see the difference between having a democracy decide what is moral or immoral and the market, the ultimate democracy, deciding what is moral or immoral."
The market does not decide what is moral or immoral, the individual does. In the marketplace, the individual may choose whether or not to participate in drugs, gambling, or prostitution, but the existence of such activities is not a stamp of approval, as those activities will always exist whether the general population wants them to or not. And also, one’s earnings are not confiscated from them in a fruitless effort to stamp out activities that are deemed immoral.
Published: May 19, 2006 11:55 AM
Casinos do create wealth. People enjoy gambling, even when they lose money.
I don't want the government determining or enforcing morality for the most part, but I see the state as inevitable and prefer one designed to be kept on a short leash. In other words, I think reinvigorating the Constitution or even going back to the Articles of Confederation as more likely than the destruction of the state followed by something preferrable.
Published: May 19, 2006 12:25 PM
A good article and a welcome suggestion. The biggest problem New Orleans has is that it is located in Louisiana. The state government in Baton Rouge has far too much control over decision making in the city and is one of the most hostile states against free commerce in the South. (Compare with Mississippi and Texas)
If New Orleans could at least secede and become a city-state its fortunes would undoubtedly rise. If New Orleanians were unanimously opposed to the casino monopoly, they would still have to ask permission from politicians in Shreveport or Lafayette to gain approval. Louisiana State politicians will gain much more power and money by deciding on who the one casino player will be as opposed to allowing free entry. As in everything, what is good for the government is bad for the people. The interests of the state are systemically opposed to the interests of the governed.
Published: May 19, 2006 12:35 PM
Neil Craig wrote:
This doesn't actually prove that it can't be made worse. I also have serious doubts about gambling as a form of enterprise since it seems to me that, unlike the normal theory & indeed practice, owners of casinos don't get rich by creating wealth but merely by moving it around.
No form of entertainment creates wealth per se. Musicians don't work in the compact disc manufacturing industry; they work in entertainment. It is very difficult to quantify where the "wealth creation" in any entertainment enterprise occurs, but the fact that nothing tangible is manufactured or improved by the act of entertaining does not make entertainment a non-enterprise.
Published: May 19, 2006 2:17 PM
"prefer one designed to be kept on a short leash."
Let me know when you create such a design that actually works. It's clear to me that the concept of Constitutional Republic, while perhaps "designed" (although even that is debatable) to constrain government, it has failed spectacularly.
Published: May 19, 2006 2:42 PM
Curt:
All three situations involve the sudden absence of central authority, providing the petri dish for spontaneous order. I am beginning to think that corrupt government is the symptom, rather than the disease.
Published: May 19, 2006 2:48 PM
"All three situations involve the sudden absence of central authority, providing the petri dish for spontaneous order. I am beginning to think that corrupt government is the symptom, rather than the disease."
But... the government planned it that way, with it having the edict on (and this has happened in both cases) further intervention. No spontaneous order there.
Published: May 19, 2006 3:18 PM
Mr. Vuk would appear to be an undergrad student of economics.... quite remarkable work, sir!
Of course Harrah's won't give up the monopoly they paid so much to acquire without a fight, but with a national concern for the rebuilding of New Orleans, this angle should be the basis for a lot of good articles.
Published: May 19, 2006 3:40 PM
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Published: May 19, 2006 11:53 PM
The problem in New Orleans is not the lack of jobs. You can make more than $30K a year flipping burgers at Burger King in New Orleans right now. The reason is there is no housing! As businesses struggle to rebuild and reopen the most common problem is lack of manpower because there is still very limited housing in the city and its surrounding parish's. The space that is available is going for greatly inflated prices. Until our housing issue is relieved more jobs won't do us a bit of good.
Also, we have one land based casino because that is all we would allow. We are not Las Vegas and don't want to be. When Harrah's opened here they had restrictions preventing them from competing with our local economy (no restaurants, no hotel's). Time has passed and their projected revenue stream has consistently failed to meet expectations. For that reason they have been granted a number of tax beaks which kind of defeats the purpose for having them here in the first place. They have been allowed to build a hotel (under construction when Katrina hit - still not complete) and opened a fine dining establishment in a hope to increase their revenue. Harrah's New Orleans has a long and tortured past that includes bankruptcies, corruption investigations and years and years of poor financial performance. We do also have some gaming ships (Treasure Chest, Boomtown and Bally's) but they are not making out like bandits either. New Orleans's was a top convention destination which would be a hurdle for more casino development. Conventioneers by and large are not the most enthusiastic gamblers.
I don't know if you remember this or not but Nagin came up with the same desperate idea back in October while I was still a refuge. It did not go very far - it never would because it would not work.
Published: May 20, 2006 12:50 AM
Corruption is actually what makes the disease of bad government tolerable! Sure, it isn't as efficient as when the government just plain butts out, but its better than when they ignore both your pleas and fistfuls of cash.
quasibill, it seems to me that the constitutional model has been the most succesful in history at preserving liberty. Even when government undergoes expansions, they tend to be limited enough that the economy continues expanding and people still want to immigrate there. I see far too many actual spectacular failures (Zimbabwe is trying awful hard to be the poster country of that) for me to apply that phrase to countries such as my own, and far too few with a better track record.
Published: May 20, 2006 12:58 AM
As a sidenote, casinos do produce something: leisure. You trade your money gambling for the thrill of the game.
If casinos just slosh money around, so does Hollywood, the video game industry, book companies, TV stations, etc.
- Josh
Published: May 20, 2006 3:52 AM
"Even when government undergoes expansions, they tend to be limited enough that the economy continues expanding"
Only if you use the government rigged GDP figures which count "government spending" (theft from others)and inflation as economic growth. The above comment would mean the Soviet economy "grew" in the 1980's. Curious, because its economy actually "implodes" later in the decade. I wonder how anyone's GDP number accounted for that?
In reality, GDP growth statistics do not mean that a country is prosperous; they are as phoney as the CPI data.
Published: May 20, 2006 6:38 AM
we have one land based casino because that is all we would allow. We are not Las Vegas
This is a succinct expression of the anti-freedom mentality.
It is not remotely appropriate or beneficial for you to arrogate power to yourself so as to "allow" or disallow others to engage in peaceful, cooperative, voluntary activity. It is destructive and harmful.
Furthermore, there is no "we" that is doing this "allowing" or disallowing. There is merely a faction of some people who are forcing others to bend to their will. This faction is often led and bankrolled by the very people who would most benefit by forcing other people to stay out of the casino business -- businesses have since the dawn of civilization colluded with government. It's an Unholy Alliance -- businesses provide the cash, and the government provides the bullying and thuggery to keep potential competitors away. They win, and literally everyone else loses.
If "we" genuinely did not want more casinos, then no other casinos would open because they would have no customers. Each individual should be allowed to vote with his wallet as to which businesses open and which do not.
It is this anti-freedom mentality that has contributed to keeping New Orleans in a state of economic decline and degradation for around 100 years. I lived there for many years, love the city with all my heart, and know first hand the level of profoundly destructive economic crimes that the thieves and thugs who call themselves "government" have perpetrated on the people, the casino saga being only one of the more recent.
Published: May 20, 2006 11:04 AM
steve: Surely you would admit that one could use faulty figures other than government ones to conclude that the economy is expanding. I'll agree that GDP has more Keynesian baggage than I'd prefer, but Soviet figures are on a whole 'nother level. As Mises noted, you can't have calculation without a price system, and while that system is interfered with by the government in the U.S, it's still a price system.
As for whether the economy has expanded even under worse-than-average government interference, I thought that was the standard opinion even at Mises.org, although they state that it would have grown even more in the absence of interference. I particularly like the metaphor of NFL players attempting to carry on a game with an elephant on the field. The elephant is big, stupid and dangerous, but good players get accustomed to it and work around it to the best of their ability.
I know empiricism sometimes gets a bad name around here, but we're talking about an empirical issue of what happened in the past. What standard do you use that does not show growth? Or in the great words of Steve Dutch ( http://www.uwgb.edu/DutchS/pscindx.htm ), what kind of evidence would result in you admitting your belief was wrong?
Published: May 21, 2006 1:07 PM
TGGP:
The GDP figure like all other government statistics is based on fraud. The government GDP figure assumes that property taken from us in the form of taxation/inflation and then spent is economic growth. This is not "growth" in the least. There are many articles on this site and elsewhere that do a far better job than me critiquing this methodology. The burden of proof is on you and the defenders of this methodology to prove that institutional theft and subsequent spending somehow "grows" the economy. This is a dishonest assertion. The economic growth pie still has the same amount of slices in it. New pieces of pie have not been produced in this move. The existing pieces just have merely been transferred from the rightful owner to the crooks (the State) which then spends the loot, gains power and expands. New growth has not occurred. Maybe the GDP should be called the Gross Government Product or GGP which would refer to the growth of the annual growth of the state.
The CPI methodology also has been subjected to withering criticism on this site and others. What empiricists will not admit is that the government no matter Soviet or American or Bolivia has a powerful motive to skew the numbers to make growth look high and inflation look low by using the time tested ways of manipulating the numbers.
Published: May 22, 2006 12:35 AM
Steve: I already stated that the GDP is a flawed statistic and that government interference hurts the economy. My point was that the economy grew DESPITE this. Reread what I wrote earlier and tell me what measurement you use that shows the economy NOT growing.
Published: May 22, 2006 1:49 PM
"quasibill, it seems to me that the constitutional model has been the most succesful in history at preserving liberty"
Hmmm. Not so sure about that. There are plenty that have crashed and burned. You do know that most countries now have a Constitution, right? And in fact, most countries actually dutifully follow their Constitution, unlike the U.S., which honors it only in the breach. Granted, those other Constitutions are arcane, technical documents that don't seek to limit state power as much as ours did, but the point is that those governments actually pretend to be bound by their document much more than ours does.
So what is it, then, that causes(d?) the U.S. to remain so much more free for so long? Could it have been the general culture and historical uniqueness of the populace? And as that changed, so did the meaning of the Constitution, to the point where it really doesn't constrain much of anything anymore?
Just because we haven't failed as spectacularly as the others doesn't mean that we haven't also failed at constraining our government.
And don't overlook the benefits of the USD being the reserve currency - we've leveraged our welfare state beyond our means. We may look prosperous right now, but so did my next door neighbor until he declared bankruptcy.
Published: May 22, 2006 2:31 PM
TGGP, the only economy I know for sure that is "growing" or not is my own economy. For all other households it is just a guess.
Antony Mueller sheds some light on this with the article "What is Wrong with Economic Growth?http://www.mises.org/story/1877
He writes that "Economic growth figures can be determined in a fairly accurate way for an economy, which is in a primitive state and when only a few, easily identifiable and compoundable items are being produced, as it is the case with basic agricultural products." "The more we move away from very basic goods, and have a more advanced and a dynamic, non-stationary economy with many heterogeneous goods and services, attempts to measure "the economy" become ever more complicated and finally these calculations lose even a rudimentary economic meaning. The concept of total output and its measurement and thus of economic growth is a statistical construct that loses its informational value for an economy characterized by a wide variety of goods and services and in which the production of new types of goods and services occurs, while many other items become obsolete."
I am not going to repeat his whole article here, but the who concept of what is genuine economic growth and how it is measured is highly subjective. Even my own economy has one set of figures for my banker, one for the government and one for me!
You are probably right that for some individuals their economy grew as opposed to others who's economy contracted during the expansion of the government, but to try to quantify this and then aggregate this into a percentage and then to further draw a conclusion that the economy really grew despite state expanision is far from certain.
If you meant to say in your previous post that the market still functions at a certain level despite state intervention, you are absolutely correct. But what I would like to find out is how do you know for sure that despite expanding statism in America, the "national economy" grew?
Published: May 22, 2006 3:10 PM
Like other people here I am irritated to see the absurd idea of saving souls by coercing bodies being trotted out again.
One can not make people good by using the threat of force, ban betting and you drive it into back rooms (where wages and conditions for staff will be worse).
It is like the drug laws. Using drugs is a very bad idea, but laws against drug use do not prevent drug use - they create a vast web of corruption that reaches all over society (from the highest to the lowest).
Millions of people (mostly the poor - the wealthy tend to get off) are sent to prison due to the "war on drugs" whilst drugs continue to be on sale in every city and town.
The law is reduced to an absurdity - and all so "moralists" can have a warm fuzzy feeling that they are "doing something".
The lessons of prohibition have still not been learned (and at least prohibition was supported by a Constitutional Amendment [the 18th - repealed in 1933] the war on drugs is an unconstitutional exercise in arbitary power).
A crime is a violation of another person's (or oranization's) body or goods - it is not doing something stupid to oneself (whether that is drinking booze, placing a bet, using drugs, or jumping off a cliff).
I do not deny that there are such things as sins (there are such things - envy and all the others) - but if a person wishes to struggle against sin they should join the Salvation Army (or engage in other voluntary action) - not appeal for government to come out with big sticks.
Have a look at New York city with the highest cigarette tax in the nation. Who benefits from this? Organised crime does.
All these well meaning "moral reforms" of government are just (in practice) a support program for criminal organisations - and many people in government (at least at lower levels) get money from these very organizations.
Published: May 23, 2006 6:22 AM
steve: If one household (such as yours) can determine whether or not its economy has grown, then even if it is a purely subjective (yes, no) answer, we can at least say whether or not the modal household's economy has grown. It also seems to me that we could add up the total worth of the assets of every household and company and correct for the change in the money supply, which Mises states is the only correct definition for inflation. I'll admit that my knowledge of economics is limited and it's only an interest of mine, but if a discipline disavows any kind of measurement I don't think it would be deserving even of the label "social science", regardless of whether or not there is any attempt to establish causality. Perhaps there might even be thousands of competing measurements all of which might only be correlated with what different people will agree to call the "economy". Perhaps we might consider their accuracy to change year by year. I don't care too much about absolute correctness, as most things in life are matters of probability. But if there is no indicator that might be called more accurate than GDP/PPP that doesn't show growth, I simply have a hard time taking a statement like "the economy did not grow" seriously.
Published: May 23, 2006 11:12 AM
"It is very difficult to quantify where the "wealth creation" in any entertainment enterprise occurs,"
The IRS doesn't have any problem quantifying wealth creation in the entertainment industry.
Wht is gambling is less moral than most TV shows?
Published: May 23, 2006 11:29 AM
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Published: November 26, 2007 7:59 PM