Casino capitalism

In common parlance, the term casino capitalism refers to the unregulated excesses associated with the “boom and bust” cycles of large speculative ventures, such as Enron. Its origins in the literature probably lie with John Maynard Keynes (1883–1946) and his famous General Theory of Employment, Interest, and Money, first published in 1936. In this vigorous attack on the classical and neoclassical economics that was predominant at Cambridge in the 1930s, Keynes refers to the “casino capitalism” embodied in the winning and losing of fortunes on the stock market. Keynes had already spoken in the 1920s of the immoral and insidious influence of an economy freed from restraint, believing that unfettered greed would create a wave of social problems. In chapter 12 of the General Theory, Keynes refers to casinos twice, first when he comments:

Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. The measure of success attained by Wall Street, regarded as an institution of which the proper social purpose is to direct new investment into the most profitable channels in terms of future yield, cannot be claimed as one of the outstanding triumphs of laissez-faire capitalism. (Keynes 1936, p. 159)

Later in the same chapter, Keynes comments:

It is usually agreed that casinos should, in the public interest, be inaccessible and expensive. And perhaps the same is true of Stock Exchanges. That the sins of the London Stock Exchange are less than those of Wall Street may be due, not so much to differences in national character, as to the fact that to the average Englishman Throgmorton Street is, compared with Wall Street to the average American, inaccessible and very expensive. (Keynes 1936, p. 159)

A term coined by the political economist Susan Strange, referring to the resemblance of the Western financial system to a ‘vast casino’, in which ‘the gamblers in the casino have got out of hand, almost beyond…the control of governments’ (Casino Capitalism, 1997). In such a situation, Strange contends, people experience an increased sense of uncertainty, and luck triumphs over dedication, application, and hard work. Highly commercialized forms of competitive sport can be seen as forms of casino capitalism: the supranational media moguls financing world sport; the largely unaccountable and often corrupt officials of international governing bodies of sport; the owners of football clubs for whom the team is a plaything in a larger financial empire. In sport's form of casino capitalism, the passion and the values of the fan are at the mercy of the gamblers in the casino.