1.4 Billion Little Pieces
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It all started when I heard of the 900-million-dollar jackpot. I had no idea the Powerball jackpot had reached such proportions. It was a nagging discomfort at first, unsettling. But it grew as I considered the magnitude of its implications. I started feeling physically unwell just thinking about it, to the point that I decided to stop what I was doing and give it some just consideration.
Four questions to consider regarding mega lotteries:
1. $900 Million? Really? What does that even represent?
How can an organization think that someone winning that kind of money is a good idea? I understand it’s a lottery, but it doesn’t mean the jackpot has to be so concentrated. Yes, it’s been marketed a certain way for a long time, but at one point what number is just too big to be meaningful?
As much as the number is absurd, it’s unfortunately in line with a societal shift around earnings that's been happening in the U.S. for some time. Salaries for the most popular and the “best” in American culture have reached astronimical levels, with CEOs earning over 350 times the average unskilled worker’s salary. This gap is far greater than that of any other country in the world.
Given the chasm-sized gap in income we find in the labour market, why not have the same gap in the largest lottery in the country? Insanity as pandemic.
2. Do the winners lose the potential to live the “good life”?
“We have no trouble anticipating the advantages that freedom may provide, but we seem blind to the joys it can undermine.”
Imagine waking up to find that you won. I tried it on for size and it wasn’t good. I wasn’t excited about the “stuff” I could get because I felt that what I would lose would be so much worse:
- Relationships: friends, family and the community in general would resent me.
- Time and attention: my time would be taken up by people trying to get money for various reasons.
- Privacy: paparazzi could stalk, harass me.
- Freedom: the great responsibility around the money would monopolize my thoughts.
- Simplicity: lost thanks to growing layers of complexity around my everyday life, which would also cause unnecessary stress.
- Peace of mind: due to the worry associated with potential theft or fraud.
- Sacrifice: what's lost when we don't have to work for anything anymore. We lose a part of ourselves. Hard work and having to make tradeoffs helps us feel alive.
For many winners, it gets worse than the above. Not only do their lives change in all the ways above, but they’re no happier than before they won because money can serve to amplify both the good and the bad in our lives.
It doesn't change us necessarily, but it does have the potential to magnify who we are. That reality can easily lead us to go through a ton of hurt. Some winners even end up losing it all in the end. Is it better to have won and lost than never to have won at all? Doubtful.
3. What’s the harm in dreaming?
Plenty. Much more damaging than what it does to the winners, gargantuan lotteries can also hurt the dreamers. By participating in the lottery by buying a ticket on a regular basis, we buy into the dream of what our lives might be like—edited to only feature the good stuff, of course. The dream has an insidious side effect: it infect the brain with a belief that happiness comes from without, not from within. The belief that something needs to come our way to “fix everything” robs us of our belief in ourselves, in our potential to create our own little piece of heaven here on earth with deliberate, constructive behaviour.
“[S]udden wealth is most likely to exaggerate your current situation, but it won’t fundamentally change your sense of well-being. If you’re unhappy, you’re not good at managing money and you’re surrounded by people you don’t trust, a big win will probably make your problems worse. If you feel fulfilled, you are a careful financial planner and you have strong relationships in your life, a lottery win is likely to build on those strengths.”
“Although imagining happy futures may make us feel happy, it can also have some troubling consequences. Researchers have discovered that when people find it easy to imagine an event, they overestimate the likelihood that it will actually occur. Because most of us get so much more practice imagining good than bad events, we tend to overestimate the likelihood that good events will actually happen to us, which leads us to be unrealistically optimistic about our futures.”
That deliberate behaviour is in making thousands, even millions of bite-size decisions over the days, years and decades of our lives. We feel good as we make these incremental, positive decisions and that feeling compounds as we build on past success. That’s the stuff the real “good life” is made of. It doesn’t come from handouts, no matter what the lotto-winner dream might have us believe. Ironically, it would seem that those who could best manage the winnings are those of us who don't chase after it.
To add insult to potential injury, playing the lotto can get expensive for those who can least afford it. Because playing the lotto feels like the only easily-accessible way for the poor to strike it big, that's the segment of the market that plays the most. If you're on welfare or struggling to survive on minimum wage, spending those dollars on a ticket that isn't remotely likely pay off is pure insanity—the type of insanity associated with the constant feeling of not having enough to survive on a daily basis. The idea of escape can be absolutely intoxicating when we find ourselves in dire straights.
4. Does society benefit?
The lottery is meant as a way of making money for 36 states. Part of the proceeds go to the states and the rest goes to the winner(s). Setting aside whether the money going to the states really does go towards programs that increase the quality of life of citizens in general, do the winnings generate much benefit?
I doubt it. It’s well understood that the ripple effect of consumption is much more effective when income is distributed among the middle and lower class. More of the money is spent on everyday consumables, making it more likely to have a multiplier effect. When money is left concentrated among few individuals, it's invested and/or spent on large assets that greatly restrict the potential for multiplication.
“Wealth doesn’t matter; utility does. We don’t care about money or promotions or beach vacations per se; we care about the goodness or pleasure that these forms of wealth may (or may not) induce. Wise choices are those that maximize our pleasure, not our dollars, and if we are to have any hope of choosing wisely, then we must correctly anticipate how much pleasure those dollars will buy us.”
Were the $900 million distributed to a larger number of people, say the ridiculous CEO salary multiplie I introduced earlier, 350 people would receive $4 million dollars, more than enough to enable most people to live a comfortable debt-free life that would offer them the freedom to choose whether to work, change careers, or retire—assuming they seek and follow good professional advice to prudently manage the windfall. They might even achieve all this and avoid the potential misery that comes with winning ridiculous sums of money.
As if it weren’t already ridiculous enough…
I thought it couldn’t get any worse. Then it did. As I finish up this post, the jackpot is now estimated at $1.4 billion, about $4 per US citizen. As staggering as it is disturbing.
Bring on the Pepto.
What do you think of “Mega Lotteries” or lotteries in general?
Image credit/copyright: James Barker/freedigitalphotos.net
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