One of the elements of Robert Heinlein’s “The Moon is a Harsh Mistress” I enjoyed was the casual references to anarcho-capitalist mechanisms for dealing with services that are currently provided by the state. In answer to a question about social security, the narrator said that a bookmaker will agree odds and take a stake for any eventualities covered by insurance schemes.
Certainly the evolution of spread betting and online betting has brought such a vision closer to reality. What struck me about the recent soccer match involving two beef-eating nations was the speed with which the price mechanism adjusted: England went from a 16 to 1 chance to win the FIFA World Cup to 7 to 1 in the space of a couple of hours. Meanwhile, Argentina went from 3 to 1 favourites to 8 to 1. One could claim that this shift is merely a symptom of nationalist delusion by the English.
Planning freaks would say that if the government set the odds they wouldn’t shift, because they would be based on a rational assessment of the various teams merits. I beg to differ.
First, it’s a lot more fun for the outcomes to be unexpected. Visiting market-places is generally more entertaining than visiting a planning office.
Second, the planners can’t put every factor into their equations (as the state price fixers in Argentina have recently discovered, to the distress of millions).
Third, bookmakers aren’t sentimental or swayed by public opinion, only committed cash. If Her Majesty the Queen were to stake £10 million on a Commonwealth team to win the World Cup, it would shift the price the same as if one million punters did the same with £10 each. The same isn’t true of such political decisions as working if, when, and at what rate at which the pound should join the Euro. The planners will decide with other people’s money, trusting to public opinion (or lack of it), and hoping to freeze the price mechanism if not to ignore it altogether.
So here’s my tip. 1) Ignore the opinion polls, check the bookies for the results of the next elections, dates of Euro referendum, future market prices. 2) Don’t stake too much on a single event.
Antoine Clarke
