The Price of Inequality and the Lottery


Lotteries have long been a popular and reliable source of public money, used to fund everything from town fortifications to charity for the poor. The first recorded ones began in the fifteenth century in the Low Countries, where they were commonly used to raise funds for civil defense and public works projects. They were even used by the Continental Congress to try to raise money for the Revolutionary War. Privately organized lotteries were also common in England and the United States.

The basic idea is to draw numbers and award a prize based on those numbers. The amount of the prize varies, but is generally the sum of all ticket sales and the proceeds from the sale of additional tickets. Profits for the promoter and other expenses are deducted from the total, leaving the winner with a share of the pool. Most large-scale lotteries offer a single very large prize, but some have several smaller prizes.

But there’s a catch, as the author of this piece in the New York Times points out: winning the lottery requires more than just luck and skill; it’s hard work. It’s a full-time job that requires an enormous investment of time, effort, and money, and the odds are still pretty long.

Cohen’s point is that, starting in the nineteen-sixties and accelerating in the ’80s, America’s obsession with unimaginable wealth—and dreams of winning the lottery—crushed the American dream. The middle class shrank, the national safety net eroded, job security and pensions disappeared, health-care costs rose, and the promise that you could achieve your own financial independence by hard work and education was revealed to be a lie.

Against this backdrop, the lottery became a popular pastime. Millions of people bought a ticket, even though the chances of winning were slim to none. State governments and private lottery promoters capitalized on this demand, making their games a little more enticing every year. By the early eighties, a lottery was available in almost every state.

By the late eighties, the economic pressures that had driven states to use lotteries in the first place were beginning to build up again. Governments had to choose between raising taxes and cutting programs. And, as the authors of the recent book “The Price of Inequality” have argued, tax increases tend to hurt the people least able to pay them.

This weakened the position of lottery advocates, who were now no longer able to sell their product as a silver bullet that would float most of a state’s budget. So they reframed the argument: a vote for the lottery would provide money for a specific line item, typically some sort of popular, nonpartisan service like education, elder care, or help for veterans. This approach gave legalization advocates a message that appealed to voters’ consciences. But it also undermined the case for the lottery as a tool to fund important projects.