Classical Liberalism 101: Take 7 -- Does Legislating Morality Work?

In this edition of the Classical Liberalism 101 series, we ask whether politicians' attempts to curb gambling (or any other "vice" for that matter) are based on emotion or logic, and whether they effectively address the issue or merely ignore the central cause. Though specifically about Bulgarian society and law, the conclusions we draw are certainly universally applicable -- or are they? Leave us your thoughts below.

---

Gambling Restrictions Treat the Symptom, Not the Disease

During the past few weeks, two proposals to ban gambling advertisements have appeared from notably varied sources. First, the Bulgarian Deputy-Prime Minister Valeri Simeonov stated that gambling advertisements -- specifically for the lottery -- are “outrageous” and that the National Front for the Salvation of Bulgaria is drafting a bill to ban them. Then, earlier this week, the newly-formed extra-parliamentary coalition “Democratic Bulgaria” also came out with a plan to seriously restrict gambling advertising on television. The politicians’ arguments for these proposals are that “scratchers” have become almost an “epidemic” in Bulgaria — an epidemic which must be “cured” by any means necessary … meaning restrictions, of course.

The Real Problem is a Lack of Financial Literacy

The problem is that banning gambling advertisements would not, in any way possible, address this fundamental question, which is why Bulgarians all over the country squander their money on lottery tickets. The issue is that Bulgarians are, en masse, financially uneducated. Banning advertisements of gambling will fail to educate them about why the lottery, on average, reasonably assures a loss of money, and it will not teach them how not to waste their money on nonsense. The most that it can lead to is their wasting their money on some other nonsense, which could be even more harmful.

It is interesting to consider whether any of Bulgaria’s supporters of the ban on gambling advertising, from Valeri Simeonov of the National and Patriotic Fronts to Radan Kanev of the Reformist Bloc (what a motley crew, eh?), have thought about why Bulgarians are buying scratch-off tickets en masse. The answer is simple — they have no financial education. And why do they not have it? Well, because our country’s politicians (yes, including the same two mentioned above) have failed to do their jobs in reforming the Bulgarian educational system, which is in an appalling and constantly deteriorating state.

Not even a basic level of level of financial literacy is taught in Bulgarian schools (at least the state ones). And no matter how we look at it, financial literacy is one of the most useful life skills any of us could have. Supposedly, this is the exact aim of primary and secondary education — to build up strong general knowledge of a number of vital disciplines. Finance (and personal financing in particular, the area of biggest importance to each of our lives) is apparently lacking from this skill set. I wonder why.

The collective buying of lottery tickets is a symptom. The disease is financial illiteracy. The cure is educational reform which implements financial education (along with statistics, of course, to comprehend the redundancy of the lottery) in schools. Sadly, this seems too elaborate a task for Bulgaria’s officeholders. They like easier, more direct, slap-dash methods of lawmaking. Educational reform requires in-depth planning … and thinking. Apparently, they simply do not have the time for that.

Restricting Gambling Ads Does Not Solve the Problem, but Merely Enforces Unnecessary Regulation

We might protest that educational reform is no short-term solution to the problem in that a very large part of the adult population, at some time or another, buys lottery tickets. Yes, it is true. And it is, in most cases, the “heritage” of the absolutely tragic education system during the time of the communist regime (contrary to what all of those people like to say about how much better education was at the time). But banning gambling advertisements would not solve this problem.

First of all, the ban would not hurt lotteries as much as advertising agencies. In its essence, every advertising ban always hurts the advertising industry first — and only afterward does it hurt the product being advertised. Second, there is a problem with the principle — such regulations aim to limit people’s freedom of choice, using argumentation that is incomplete and unclear. Has anyone ever seen any of those supporters of the ban on gambling advertisements present any kind of data on the “enormous problem” with gambling in our country? What about data on how many people are addicted, how much money is being spent, and so on?

Nothing of the kind: the arguments in defense of such bans are always based on some vague “impression” that there is a gambling problem. To some politicians, it apparently seems that too many people are scratching off tickets, so therefore — let us ban the advertisements! Well done! This is surely how quality legislation is made — without data, without in-depth analyses, based only on the personal notions and speculations of some politician.

Yet again, in conclusion, banning gambling advertisements does not strike at the root of the problem, which is financial illiteracy, but actually shifts the focus away from it. Such fruitless bans give the lawmakers an excuse to say “Well, see, we’re doing something; we’re thinking about you” — without their actually doing so.

---

Original link; translated by Pavel Valkanov; edited by moi

---

Ciao зa now!