This weekend I attended the 140th running of the Travers stakes in Saratoga Springs, NY. It was a rainy, muddy day, filled with fanfare and running into old friends from college – on the whole a fantastic time. I can not recall the name of the horse who won the race, but (from looking at my betting form) I can remember who did not win. Fortunately, I only place very small bets – partially because I rarely win, but also because I really don’t like betting in general.
Many things in life are trade offs between altruism and self interest. Paying taxes, obeying the law, and stopping at stop lights are all examples of altruism – things you do not because they’re good for you, but because they’re good for everyone. On the contrary, gambling is a form of self interest. You don’t gamble because it helps everyone, you gamble because of the potential money that you might win. Further, not only does gambling only help you, but it actually hurts other people. Every dollar you “win” someone else (who has made a different bet) loses. It’s a zero sum game.
There are plenty of economic systems that have a much higher liklihood of ending in a scenario where everyone can win. A basic example is a bank that lends money to a small business. The small business wins because it can use the capital to create products and services and the bank wins because it earns interest on the loan.
Sometimes I wish that I lived in a world where everyone was more altruistic and where we focused more on creating situations where everyone wins. But, on the other hand, it is hard to ignore the allure of betting, and the sweet thrill of quick fortune when your horse crosses the finish line first.