Several weeks ago the Travel Channel presented a show titled “ Las Vegas Sucker Bets” in which it was observed that professional gamblers wager according to probabilities; while the amateur or leisure gamblers wage bets based on possibility. The basis of the professional bet is on the probable outcome of success; the amount wagered is altered according to the perceived odds of winning. Furthermore, a hand in poker, for example, which is deemed to have little chance of success can be withdrawn from the game [folded in poker terminology], whereby no further risk of money is incurred. The amateur bets based on possibility or hope and will continue to wager money on the slightest odds of winning. In other words, the bet is continued until literally the time has come for all players to reveal their hands. It is only at this moment that the amateur realizes all hope of success has faded , along with a great amount of money.
The differences between the professional and amateur gambler is a contrast between the actions taken in a risk versus the actions in a gamble. A contrast that we as individuals and entrepreneurs take into account in our every day lives. Almost every human action we take involves some degree of risk to an unsuccessful outcome, whether it is getting out of bed or crab-fishing in the Bering Sea. Even the most foolish gambler at the Las Vegas casinos is a professional in daily life where actions are determined by the probability of success and reward. Just as in the case of the professional poker player, we withdraw from actions or interactions which are perceived to be harmful.
Naturally businesses constantly innovate, explore, or even cease operations under the same premises. Capital is expanded into products which provide reward or the probability of reward [profit]; while those which have the probability to drain capital are discarded, remember the Edsel, New Coke, or even purple ketchup. A business that continues to expend capital on possibilities in the end is no different than the amateur poker player, broke and no longer sitting at the table.
Simply stated, a risk is a gamble that we can withdraw from at anytime; whereas a gamble is an endeavor we continue either because we are ignorant as to the outcome or worse, we are forced to continue. And so it should be with our approach towards government.
The founders were well aware of this concept of risk versus gamble concerning the creation of government [though maybe not expressed in exact words]. They knew through historical evidence that the natural course of any government creation eventually ended in tyranny and oppression. Jefferson stated such:
“Experience hath shewn that even under the best forms [of government] those entrusted with powerhave, in time, and by slow operations, perverted it into tyranny”
However, the colonists were in a real high stakes game. Despite their defeat, the British still remained the world’s most formidable military power whose armies were perched to the north and navies ruled the oceans. Spain, the second largest military power, potentially threatened the colonies to the west. The stakes were this: continue a loose federation which would be open to outside military force; or create a central government primarily for defense, which had the potential of following the natural course towards tyranny. Either option appeared to be a certain gamble wagered with the newly gained liberty. However, the founders envisioned a structure of government that would be more of a risk than an outright gamble. The risk of human liberty in government could be managed as long as the people retained the right to withdraw or sever its bonds when it was deemed that the continuing the relationship would result in the erosion of Life, Liberty, and the Pursuit of Happiness. This concept of withdraw and risk is evidenced by the fact that several colonies had within their ratifying documents the right of secession. Without the right to withdraw, the formation of government becomes a gamble in the truest definition of the word.
This then is the true legacy of Abraham Lincoln, and Andrew Jackson before him. Opting to force the continued relationship upon the states, which resulted in the War Between the States,Lincoln in essence proclaimed that the Constitutional Government would no longer be a risk, but a gamble. A gamble that would require the continued wager of human liberty; no longer would we as individuals be able to control the risks of our daily lives and businesses. We would now be coerced to behave like the amateur gambler who can only believe in possibilities.
Today we continue to throw our liberty chips into the pot against all odds and evidence to the contrary because we believe government can provide us economic security in our old age, “free healthcare” without a decline in medical services, “free education” without intellectual deprivation, “free energy” absent of blackouts or gas lines. We believe it is even possible that through government we are able to live below sea level in the face of tropical storms without getting wet.
Few of us would ever play a game of chance where the only manner in which you could leave the table was to either lose all your wealth or die; and so it is with our liberty. Without the right to withdraw, government becomes the biggest sucker bet of them all.