If you don’t know what a lottery is then you’re probably only just visiting this planet from some other place in the galaxy where there is no uncertainty, where the human equivalent species controls everything and every outcome. The Oxford dictionary defines a lottery as “a situation whose success or outcome is governed [entirely] by chance” . I added the word “entirely” because it is crucial to the definition of a lottery and am very disappointed that the Oxford dictionary  was not sufficiently specific. 

Now, it’s OK to play The Lottery. In fact, it is silly not to play The Lottery when the prize is really big relative to the potential loss of buying a ticket. Plunking down the equivalent of half a cup of coffee for the chance to win fabulous millions is not a big decision requiring much deliberation. 

However, while playing The Lottery would strike most people as reasonable, being inadvertently put up as the stakes in someone else’s lottery would not. Perhaps, if someone paid you to be the stake and made the reward commensurate with the risk you needed to personally take in the game of chance, it might be OK. But that does not happen in the secret, Self-Regulation lotteries (SRL) running all around us all the time. 

The SRL, something devised by a low grade actor, Ronald Reagan, who happened to be living at a prestigious address at the time, and subsequently embraced by most leaders of the western world, is not a fair game. It is a game run by industry with the open collusion of government. A fair game is one in which everyone has the same chance of winning or losing. In the SRL, it is the self-regulated who win when the outcome is serendipitous, and everyone else who loses when the outcome goes south. For everyone else the SLR is entirely a game of chance because everyone else has no control over the outcomes. For example, the Deepwater Horizon disaster in 2010 , saw BP take a big loss in its stock price, plunging by about 50%. By 2013, however, by way of comparison, BP was not doing much worse than Statoil, another international giant, and Statoil hadn’t done anything really bad. Others were not so lucky. 11 workers were killed in the explosion and it caused the largest environmental disaster in US history. And it all happened to the others out of the blue as they had no control over the quality of the Deepwater Horizon’s management, nor the quality of the materials it was using. 

The 2008 financial crisis which plunged the world into the Great Recession depended heavily on the magic of the SRL. If attitude changes by the wasteful, now more prepared to conserve resources, are good then the Great Recession was not all bad. However, the masses of unemployed in Greece, Spain, Italy, and Portugal may not see it the same way. Nor will those whose life savings vapourized in the aftermath of the financial meltdown. It was entirely a game of chance, a lottery, for everyone outside the financial services world as they had not the tiniest say in how large a Ponzi scheme the industry would be allowed to run. 

Self-Regulation doesn’t sound bad; not like torture, death, pestilence and other unpleasant phenomena. The touted benefits are very real, like less government interference and so less red tape which should make for more efficiency and its ready partner, greater prosperity. These benefits are presumably the rewards offered by Self-Regulation. So, why is it such an awful deal that it becomes no better than unfair? 

You guessed it. Humans. We can talk ourselves into almost anything. Like the head of the MM&A railway believing that there is no difference between transporting wood and oil. I’m assuming this belief because the railway moved seamlessly between transporting the two commodities without incurring any substantial costs for major changes to the rail infrastructure or, indeed safety protocols. This last is evident in the continued use of one man crews, without regard to the nature of what the railway was hauling, not to mention the reported poor state of the rail tracks. The SRL allowed the railway to take hugely increased risks of catastrophic  failure while reaping the benefits of lower costs through the self-delusion that oil and lumber were essentially similar commodities. We can be pretty sure that the citizens of Lac Mégantic were probably never offered a share of the extra profits derived from skimping on safety, something easy to do in the world of SRL’s. 

Humans evolved to be greedy. Those that were not greedy never passed on their genes and those that were the greediest were also most likely to pass on their genes. It is sheer folly to entrust humans, unconsciously prepared to do almost anything for personal gain, with the task of self-regulation. There are studies that show only punishing sanctions for those whose activities, like food, chemical, transportation and other high environmental impact industries, will keep them from harming others while engaging in the normal business practice of maximizing profits. 

So, if you buy into the story that less government regulation means lower taxes and more wealth for all, then you should be happy with the SRL. But that story has a major flaw: The ultimate cost to everyone else of shoddy self-regulation can be considerably larger than the benefits shared largely by the self-regulated. So, if you’re a little worried that bankers, food processors, railways, fracking outfits are willing to take big risks with your money and well-being, then the cost of regulation may seem reasonable.