In the concluding chapter of The Luck Business, Goodman argues that instead of allowing the states to "promote" gambling, the federal government should develop a national industrial policy that would favor "those technologies and industries that are most critical to the country's economic future, and...provide these industries with specially targeted government support, including outright grants for research and development, loan guarantees, tax breaks, tariff protection from foreign competitors, research at government labs, and guaranteed availability of government as a client and buyer of products." Even sympathetic readers may have been puzzled by the inclusion of this policy prescription in a book whose ostensible subject is legalized gambling. However, if one peruses The Luck Business together with Goodman's two previous books, it becomes apparent that his ultimate goal is to channel anti-gambling sentiment into support for centralized economic planning.

The Luck Business is best understood as a continuation of themes developed in After the Planners (1971) and The Last Entrepreneurs (1979). Goodman himself draws the thread, telling REASON: "The reason I got interested in gambling was that I was looking at what cities and states were doing to improve their economies. Quite a number of them had either gone into or were considering gambling as a form of economic development." Read in sequence, the three works suggest that Goodman's analysis of the economic effects of gambling is driven by his overarching commitment to a vision of planning and regulation that he calls "community socialism."

That term is missing from The Luck Business, and also from Goodman's congressional testimony and numerous media interviews on the subject of legalized gambling. But it recurs throughout the two earlier volumes. Indeed, there is much in Goodman's pre-gambling oeuvre that foreshadows the methods and biases that would eventually inform his writing on gambling. In After the Planners, he abandons any pretense to objective scholarship, declaring at the outset that "it is no longer possible for us to masquerade as 'disinterested,"objective' professionals." (The book is dedicated to "all those brave people who won't put up with it.")

Goodman's goals are succinctly stated in dozens of passages such as this: "Our problem is not simply to destroy capitalism, but to do this through the creation of a culture which will not tolerate the repressive and competitive values which capitalism has already induced us to accept." And this: "[W]e must aim at creating a cultural existence, a way of life, which requires just outputs. For example, if a community decides that a better architectural environment or a better educational program is to be produced, its way of measuring the usefulness of these programs would not result from calculating how much more money will be made through 'keeping the workers happy' or by giving them more skills, but rather from evaluating the effects of a better architectural environment and better forms of education on the quality of people's lives."

Attention to "the quality of people's lives" is one of Goodman's central preoccupations. But "quality of life," like "social justice," is a notoriously slippery standard that usually means whatever the person invoking it wants it to mean. In Goodman's case, it clearly has nothing to do with the preferences of actual people as expressed in the marketplace. For example, if you derive pleasure from, say, drinking single-malt scotch or playing games of chance, you might think that having access to these things would enhance the quality of your life. But Goodman has long denied that individual persons are in a position to know best what is good for them.

Thus, when it comes to something like architecture, Goodman suggests in After the Planners that decisions about economic and even personal living arrangements are best left to collective political processes. He exhorts planning professionals to use their technical knowledge, and the authority it conveys, to transform societal values. "Design opportunities," he writes, "can be used as a way of explaining the advantage of community-ownership and management of all income-producing ventures - the factories, the housing, and the shopping places." Architects can further acquaint people with the satisfactions of community socialism by designing "communal buildings, where people share facilities and spaces, [which] would present an alternative to the present single-family house or apartment unit." Although he champions neighborhoods against technocracy, Goodman conjures a familiar tableau, that of the masses being disabused of their vulgar tastes and prejudices by a political cadre.

In The Last Entrepreneurs, Goodman deplores when businesses search for greater profits by moving plants and jobs from states with high taxes and militant unions to low-tax, non-unionized states. Rather than acquiesce in a pernicious game of "regional rotation" among private firms, he urges policy makers to recognize that economic instability provides a rationale for increasingly aggressive state interventions. The possibility of widespread business failure should be seized upon as "the opening wedge to develop public, locally owned enterprises," including factories, energy companies, and banks.

Any potential resistance to such proposals could be countered, Goodman suggests, by using the example of existing state-run enterprises to win acceptance for the creation of more advanced forms of socialism. It is in The Last Entrepreneurs that Goodman reveals his nascent interest in legalized gambling, endorsing "the idea of linking state lotteries and gambling to the creation of other state-organized operations. While public gambling can hardly be considered a traditional path to socialism, it might be useful to consider it as a step....The problem is not getting more states to run gambling operations but how to refocus existing gambling enterprise to create more progressive forms of socialism. A regional socialist movement could use the precedent of government gambling operations to demonstrate that public ownership is no longer a radical departure."

These passages make clear why, in The Luck Business, Goodman reserves his harshest criticism for private, commercial forms of gambling - especially casinos. State-run lotteries are of interest only insofar as their worst features and practices can be used to smear commercial gambling enterprises. Indeed, one of the book's most striking characteristics is its refusal to acknowledge important distinctions among the various forms of legal gambling. Legal gambling enterprises in the United States have become extraordinarily diverse, encompassing pari-mutuel betting at horse and dog racing tracks, charity bingo, state lotteries, and commercial and Indian casino gaming. A recent addition to this mix is "convenience gambling" - the placement of slot machines and video poker terminals in restaurants, drug stores, and gas stations. Given such variety, it hardly makes sense to view gambling as monolithic.

The Luck Business, however, repeatedly makes invidious generalizations about "gambling" and "the gambling industry" on the basis of evidence drawn mainly from the experience of state lotteries. Thus Goodman criticizes public officials for spending huge sums to advertise and promote "gambling," without acknowledging that broadcast

Such an analysis leaves unanswered the question of why people gamble. Lobbying by casino developers can only have the effect of lifting government prohibitions against gambling. It cannot force people to the blackjack tables and slot machines. Casino companies, and the politicians who appreciate the tax revenues to be reaped from legal gambling, understand that a great many people like to gamble and that, if given the opportunity, they will.

Why people gamble has long fascinated social scientists, and there is a wealth of research on the matter, including a famous study by eminent sociologist Erving Goffman. In the 1960s, Goffman worked as a blackjack dealer and croupier in Las Vegas and concluded that gambling was a surrogate for the risk taking that has been removed from daily life courtesy of the modern, bureaucratic state. Similarly, other researchers, such as psychologist Igor Kusyszyn and sociologist Felicia Campbell, have concluded that gambling provides positive stimulation for participants.

In The Luck Business, Goodman ignores such work, presumably because it contradicts his view that bettors are suckers who approach gambling as an investment opportunity, rather than as a form of entertainment. That false premise becomes the launching pad for a wide-ranging critique of "the new culture of chance" and "the new speculators." The latter are middle-class investors who, during the 1980s and early '90s, joined the wealthy in pursuing "new strategies for speculating in real estate, the stock market, and collectibles." It troubles Goodman that during this period, "income for people with investments grew three times faster than for those who were working for their money." In the grand tradition of socialist populism, Goodman celebrates honest labor while denigrating idle speculation, and he warns that this "broad shift in the American economy toward popular speculation is directing increasing amounts of human and financial resources into unproductive activities." By Goodman's reckoning, the new speculators include casino gamblers, owners of mutual funds, and even children who "by the age of ten,...already know about speculating in old baseball cards, comic books, or Barbie dolls." To the list of dangers that the modern world poses to the spiritual health and well-being of our kids, Goodman adds the corrosive allure of "an old Mickey Mantle card or first-edition Superman comic book."

Of course, Goodman is not content to depict gambling as just another socially useless investment strategy. Gambling is worse than the others because it takes a huge toll in "social costs." We learn, for example, that "the American Insurance Institute estimated that 40 percent of all white-collar crime had its roots in gambling" - an item subsequently repeated in The Economist. Trouble is, there is no such organization as the "American Insurance Institute." Goodman's citation on the matter uncritically passes on a claim made in an obscure publication. As for the 40 percent figure, it cannot be taken seriously: U.C.-Irvine criminologist Paul Jesilow notes that to arrive at this datum, one would have to identify all white-collar crime - a nebulous category that includes everything from a worker stealing a pencil from his employer to insider stock trading and antitrust violations - and ask all the perpetrators why they did what they did.

Goodman's tendentious use of statistics is nowhere more evident than in The Luck Business's discussion of "problem gamblers," a group he says comprises "between 1.5 to 6.5 percent of the adult population." The notion that so-called problem gambling is sweeping the country as legal gambling becomes more accessible is perhaps the most potent weapon of those who deplore gambling's "social costs," which, says Goodman, include suicide, divorce, job loss, and the aforementioned "white-collar crime." But Goodman doesn't define "problem gambling" in The Luck Business.

In contrast to problem gambling, "pathological gambling" is a clinical term recognized by the American Psychiatric Association. Psychiatrist Richard J. Rosenthal defines it as "a progressive disorder characterized by a continuous or periodic loss of control over gambling; a preoccupation with gambling and with obtaining money with which to gamble; irrational thinking; and a continuation of the behavior despite adverse consequences." Recent studies estimate that between 1 percent and 3 percent of the U.S. population suffers from pathological gambling, though some psychiatrists argue that the South Oaks Gambling Screen - the questionnaire used to diagnose the condition - yields results that are over-inclusive. Moreover, the estimate includes not only the currently afflicted but also those who suffered in the past and have since overcome their condition.

"Goodman allows that he"can't define [problem gambling] precisely." Problem gamblers, he says, include pathological gamblers and others with "serious" behavioral problems related to gambling such as chasing losses and borrowing money they don't repay. "Whether you're a pathological or problem gambler," says Goodman, "depends on how extreme your behavior is."

A book written to educate and inform - written, that is, "to provide policymakers and the general public with a more accurate basis for making their decisions" (to quote from the preface to The Luck Business) - would take note of all this. Goodman, however, tells us nothing of the disagreements among psychiatrists over the diagnostic criteria and prevalence rates for pathological gambling. Throughout The Luck Business, he uses "problem gambling" as a synonym for "pathological gambling," attributing to problem gamblers the dysfunctional characteristics that psychiatrists associate solely with pathological gamblers. And by citing the higher problem gambling rate, Goodman invites the reader to conclude that pathological gambling is much more prevalent than it really is.

Goodman's tactic of blurring distinctions so as to cast commercial gambling in a negative light is by no means confined to his writings. Appearing last December on The News Hour with Jim Lehrer, Goodman was asked to comment on the fact that Americans, according to interviewer Margaret Warner, "are wagering tremendous amounts of money, I think something like $480 billion wagered, more than they spend on spectator sports and music events and movies combined."

Here was a perfect opportunity to correct a common misconception about the economics of gambling. "Margaret," Goodman might have replied, "those numbers are apples and oranges. The amount of money wagered is many times greater than the amount of money lost (or spent). With casino games, between 85 and 95 percent of the money wagered is returned to bettors in the form of winnings. The wager figure is so high because the bettor's money is used many times. A gambler with $50 to bet on slot machines, for example, could stretch that money over the course of an entire day. By the time he was eventually cleaned out, he may have wagered more than $500. But he's only spent $50 out of his own pocket."

Instead, Goodman's response was to claim that the situation is considerably worse than Warner's numbers indicate, because "what we're getting, essentially, is a small group of people in this country wagering huge amounts of money, getting in trouble over their gambling, or wind [sic] up writing bad checks, going bankrupt, committing fraud, embezzling money from where they work."

To challenge the notion that casinos inject cash into local economies by encouraging people to increase their personal spending, Goodman invokes an iron-clad version of the "substitution effect," which holds that the money consumers spend on newly available goods and services represents money withheld from pre-existing businesses. For Goodman, a dollar spent in a new casino must come at the expense of some other establishment. Though plausible, this is not necessarily the case: Consumers can alter their work and spending habits and new forms of entertainment can coexist with, and need not supplant, existing options.

In any case, worrying that consumers might decide to visit casinos in preference to non-casino hotels and restaurants smacks of little more than a desire to selectively protect certain businesses from would-be competitors. Isn't it true that every dollar spent on food served in restaurants is a dollar not spent on food sold at retail grocery stores? If we are willing to protect restaurants from competition with casinos, shouldn't we consider protecting grocery stores from competition with restaurants? Goodman's analysis raises such questions, but instead of confronting them directly, he breezily dismisses those who "maintain that the free market, not government, should dictate which businesses succeed and which fail." The criteria for selecting government's favored businesses are never spelled out.

What is more, Goodman's invocation of the substitution effect characteristically ignores the interest of the individual consumer. Economists Reuven and Gabrielle Brenner have noted that when people divert money from an established business with which they previously traded to a new competitor, they are expressing their judgment that the new product is more valuable to them than the old one. For government to deprive consumers of the opportunity to transfer their purchasing power in this way is to perpetrate an injustice against them. Dwelling on the effect of "substitution" on businesses, the Brenners point out, ignores the gain to society that comes from fulfilling consumers' wishes.

In the concluding chapter of The Luck Business, Goodman returns to the canard that all gambling enterprises - not just lotteries, but private gambling operations as well - are subsidized by state governments. "Gambling," asserts Goodman, has been adopted by the states "as a kind of ad hoc industrial policy." As an alternative to government support for this "parasitic economic activity," Goodman argues for an expanded industrial policy that would favor "productive enterprises." Since he furnishes no criteria by which we might distinguish the parasitic from the productive, we may surmise that by "productive" Goodman means those enterprises that produce things of which he approves. Calling an industry "parasitic" tells us nothing more than that the person using the epithet doesn't like that industry.

As the Brenners point out, "the truth is that the gambling industry is like any other entertainment industry. It uses hotels, machines, computers, video equipment, croupiers, and what not; new games as well as technologies for selling the games are being invented. There is no difference between this industry and, let us say, that linked with the production of operas, plays, or ballets - instead of hotels, theaters and concert hails are being built." What happens, the Brenners ask, when government restricts people's entertainment choices? "They either go elsewhere to spend their money, or they have less incentive to work."

One can appreciate the profound disappointment that Goodman must have felt when, instead of leading to "more progressive forms of socialism," state lotteries during the 1980s and '90s paved the way for a new form of private enterprise - casino gambling. At times it seems that what most upsets Goodman is not that hapless gamblers are losing their money, but that increasingly their money is, as he remarked on The News Hour, "going into the pockets of the people who run the gambling companies....Now, essentially, what we've done is privatized a sector of our tax system." Lotteries may be a bad bet for gamblers - they typically return only about half of the money wagered - but at least the money bettors lose goes into the state's coffers.

It seems unlikely that Goodman will succeed in his effort to lay the groundwork for a comprehensive national industrial policy - and ultimately, the "community socialism" that he championed in earlier writings. But he has already done much to shape the current debate over legalized gambling. By focusing on "gambling's broken promises," Goodman has succeeded in transforming what should be a personal-freedom issue into one dominated by macroeconomic considerations. Curiously enough, he has been assisted in this by casino executives, their lobbyists, and sympathetic politicians, who have proved quite eager to trumpet the economic benefits that gambling brings, but who have said little in defense of the proposition that tax-paying, law-abiding citizens have an inherent right to spend their time and money on pastimes that do no harm to others.

The economic effects of the different forms of legalized gambling, considered in various contexts and circumstances, are empirical questions that await the federal gambling commission. Even an objective study, however, runs the risk of becoming overly preoccupied with gambling's economic costs and benefits - which can be quantified - while ignoring the not-inconsiderable benefit that people derive simply from being free to spend their time and money as they wish. The greatest danger posed by the National Gambling Impact Study Commission, however, is that it will embrace Robert Goodman's tactic of using anti-gambling politics as a vehicle for further expanding the power and jurisdiction of the managerial state.

Robert Detlefsen (rdetlefsen@cei.org) is a senior research fellow at the Competitive Enterprise Institute.

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