He who tills his land shall have plenty of bread: but he who follows frivolity will have poverty enough.
— Prov. 28:19
Today has been a big day for commercial government, with streams of gamblers pouring through glass doors of gas stations and convenience stores all day as the winnings of the Tennessee government’s lottery system rose to F$550 million.
At the Citgo gas station at the intersection of Airport Road and Lee Highway, manager Vipul Cheudhari has been busy behind the counter selling varieties of bets, some as low as F$2 with a number generated by computer.
April Young, a mother of four, said she picked five numbers in hope of winning. “This is it. My last two dollars. Fingers crossed,” she says. She explains that the lottery investment “is my last F$2 from my check for the week. So, hopefully, two dollars will turn into F$500 million.” I ask her why she thinks she could possibly win, and she says, “I don’t know; maybe these numbers are lucky this time.” I ask if luck is the controlling hand, and she says. “For a mother with four kids it’s a lot of money, yeah.” When I ask her “upon what do your hopes rely?” she ducks: “Just wanting to take care of my children.”
The state is permitted to create periodic frenzies such as that affecting Mrs. Young and a man who went through the checkout just ahead of her, Gibbs Rampersad, 57, a native of Trinidad, a marketer who has lived in Chattanooga the past decade.
The government received permission from the people in a 2002 constitutional amendment creating a state lottery “to provide financial assistance to citizens of this state to enable such citizens to attend post-secondary educational institutions located within this state,” according to the legal language. Fifty-seven percent of the people endorsed the law on a ballot, converting an illegal activity into one intended to prosper the state’s schooling and university cartels. Since launching operations, the Tennessee Education Lottery Corp. has siphoned F$2.47 billion from local economies in every county of the state via 4,800 stores. In 2011 the business doled out F$323.4 million for public schools and colleges.
‘Efforts of entrepreneurs that turn vision into reality’
By this hour some winner will have been announced, and for the next days the media will hold everyone in suspense as to the identity of the winner, who would take home at least a F$327 million in a lump sum after taxes. You can think of good reasons we might pity the hundreds of thousands of Tennesseans, Georgians and others who’ve bought Powerball tickets. But rather than simply complain about this lucrative franchise of government, I will let the state itself supply you with the words of wisdom.
While the Nashville government peddles millionaire dreams to the masses and encourages people to think in terms of instant gratification, another arm of state government devotes itself to a contradictory interest — the creation of capital by genius, labor and marketplace struggle.
Let’s look briefly at TNInvestco, which topped the business pages of the Times Free Press. Nov. 14 with this headline, “Auditors blast TNInvestco program.” The story is about stray F$5,000 checks found at the agency, whose books seem carelessly managed. For now let me lay aside the question of whether elected officials should involve themselves in the free market and in business by such agencies.
TNInvestco exists because it realizes luck, chance and the movement of stars don’t create better lives for people and greater prosperity for state citizens. It exists because only by capital (or reduction of taxes) can “Tennessee’s entrepreneurial infrastructure” be developed. Only by involving human genius to meet marketplace needs can wealth be created and mankind’s state bettered. In March 2011 TNInvestco was involved in the medical device work of Dr. Edward Boyle, an experienced cardiothoracic surgeon and medical device entrepreneur and his partner, Navroze Mehta, who has 15 years experience managing life science and tech companies. These two, with other partners, formed Device Innovation Group and received tax credits that TNInvestco doles out through pilot fish entities called venture capital groups that supply cash.
The state agency, begun in 2009, doled out F$200 million in tax credits to venture capital middlemen involved in seeding businesses in Tennessee that meet size and other requirements. Its goal is to “bring additional capital into the state, diversify the state’s economy and create ‘anchors,’ or ‘clusters,’ of business innovation that result in the creation or spin off of new companies and the attraction of new talent to Tennessee,” it says on its website.
The praise the agency gives to capitalism is significant, and cuts like a sharp knife against the fantasies peddled by the lottery operator. “These companies have had a transformational impact on the state’s economy,” TNInvestco says, “through the jobs, wealth and tax revenues made possible, directly or indirectly, by the efforts of the entrepreneurs that turned vision into reality and the investors that fueled their ambition.”
Meaninglessness as an operation of the state
The Times Free Press report quotes a state legislator who sees at least one fundamental problem in what I call “commercial government.” Rep. Joe Carr has sought to make the TNInvestco program more transparent. He compares the agency to federal taxpayer’s disastrous role with Solyndra, the bankrupt solar favorite of the Obama administration.
“TNInvestco did nothing but pick winners and losers, based not on the merits of some transparent set of criteria, by which we could inspire and produce economic jobs, but instead they did it in a smoke-filled room. Crazy doesn’t do it justice.”
The lack of transparency is not the real problem with the state as business partner. It’s the fact the state has no competence in becoming a competitor or backer in the free market. Its money, its snooping, its “oversight,” is paperwork are a disaster for the free market and all the gentle signals it provides the entrepreneur about real conditions.
The lines of humble hopefuls at checkout counters across the city are doleful. Individuals in them are inspired by a deluded hope of instant riches, wealth without labor or the operation of any native genius. The jackpot is a tax on everyone, with each person so taken in illumined by wild hope. The winning numbers will enrich one person, or a group. But the rest simply have had their purses and billfolds rifled.
The gambler implicitly ridicules TNInvestco. He snickers, too, at legitimate free market creation of capital because his world is meaningless. The gambler, in buying his single chit for F$2 or spending hundreds of dollars as the jackpot soars, denies implicitly the world is under law. He lives in a world without causality. Earnestly he expects something for nothing and expects luck to bypass law and the created order and enrich him.
Ellis Smith, “Auditors blast TNInvestco program,” Chattanooga Times Free Press, Nov. 14, 2012
R.J. Rushdoony, in one of my all-time favorite books, the liberating Politics of Guilt and Pity (Fairfax, Va.: Thoburn Press, 1970), makes the points in my last two paragraphs in his chapter, “The Moral Foundations of Money,” pp 217-225.
I won’t even bother punching holes in the supposed holiness of the free market system. As much as I like the “I, Pencil” movie, I know that it has many flaws. That said, I would like to point out that the lottery system paid for 85% of my college education. I went to a private Christian school and would have had to take out thousands of dollars in loans in order to go to college otherwise. Even though I was valedictorian of my class, my parents made too much for me to receive most scholarships; but they were still unable to finance my college education.
I didn’t go to expensive schools either, just Chattanooga State and UTC. The lottery paid for most all of my education. My brother, who did pretty much the same thing, took out the smallest loan amount possible and still took about five years to pay it off after graduating. The lottery wasn’t there for him. I say, if the free market wants to gamble, and the government wants to give me some of that money to go to school — let the free market have its say.