Lotteries, TV Millionaires, And Entreprenuers
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A couple of years ago, a high school buddy told me that an old classmate of ours had become a millionaire. Being the pro-entrepreneur, free-market, capitalist kind of guy that I am, I was intrigued and wanted to know what business he succeeded in or what life-improving invention he brought to consumers.
My disappointment in my friend's answer was palpable. Our old high school classmate won his big bucks in the state lottery.
This incident came to mind recently as I was watching two of the new TV game shows that have splashed onto our television screens--"Who Wants to be a Millionaire" and "Twenty-One." "Who Wants to be a Millionaire" has been an incredible success for ABC and host Regis Philbin, while "Twenty-One" also debuted in the top 20 for NBC and host Maury Povich. The checkered history of "Twenty-One"--it was prominently involved in the game show fixes of the late 1950s where contestants received the answers in advance--apparently was no longer an issue.
Today's "Twenty-One" beats "Who Wants to be a Millionaire" for theatrics. Winners aren't just handed a check. Instead, Maury loads up a bag with bundles of cash for the big winners while on the air.
What explains the success of such shows, not to mention the billions of dollars spent each year in state-run lotteries? The obvious answer is that many dream of getting rich quick. Answer a few less-than-difficult, multiple-choice questions asked by Regis, and become wealthy. It is quite alluring, even if only to watch from a distance.
Similarly, spend a few bucks on the lottery, and you have a shot winning tens of millions of dollars--albeit an inconceivably long shot.
Of course, most of this is just fun. As for those who produce these TV game shows, they deserve credit for testing their ideas in the marketplace. Couch potatoes have rewarded them with solid ratings, and in turn, advertisers stand willing to fork over their money.
It is a bit more difficult, however, to be completely unconcerned about government-run lotteries. The usual criticism points to lotteries getting people addicted to gambling. They might, but so can casinos and bingo parlors.
No, there are two real problems with government lotteries. First, money is shifted from the private sector, where consumer demands and producer efficiencies rule, to government, where special interests and waste reign. Second, having government adopt a get-rich-quick scheme as official policy sends a grave message. In particular, lotteries are sold as means for educating children, but what are we actually teaching when we urge people to play lotteries in order to fund schools? While government should not outlaw gambling--which only pushes such activity underground and denies people a choice that for most amounts to just having some fun--it also should not be involved in running and actively promoting gambling operations.
However, perhaps most disturbing is how winners of lotteries and game shows are treated, as opposed to the treatment received by individuals who earn wealth through entrepreneurship.
Building a successful business means that one worked hard to create and/or meet the demands of others. They have won the approval of consumers. Such success, though, is too often met with indifference, suspicion or even derision by the media and a portion of the public. For good measure, being a success in business means punishment from government in the form of higher taxes and increased regulation.
In contrast, TV game show winners are warmly embraced, featured in local news stories. And of course, lottery winners get a big check from the government. All for basically doing nothing.
Call me crazy, but I think we've got something mixed up. Shouldn't we be celebrating the successful entrepreneur who actually produces a good or service others need or want, and perhaps cast a bit more of a skeptical eye on the person getting a check from lottery officials or Regis Philbin?
Raymond J. Keating is Chief Economist of the Small Business Survival Committee, and co-author of the new book, U.S. by the Numbers: Figuring What's Left, Right, and Wrong With America State by State. Mr. Keating also co-authored D.C. By the Numbers: A State of Failure, and has written more than 300 policy studies, book reviews, and articles published in such periodicals as The Wall Street Journal, Investor's Business Daily, The Journal of Commerce, The Washington Times, Newsday, New York Post, Insight, The Freeman, Human Events, and many more. He regularly testifies before the Congress, and is an experienced and sought-after spokesman on a wide range of political and economic issues. He is currently at work on his second book tentatively titled New York By the Numbers: State and City in Perpetual Crisis.
