The UK Pensions Commission report identifies on Tuesday a serious crisis that many of us have known about for a long time, and on Wednesday the radio news reports that it will soon be possible to purchase National Lottery tickets using a mobile phone. I suspect that the lottery will be the one organisation that can successfully profit from the pensions disaster. Robert Shiller, in his book Irrational Exuberance, identifies the spread of lotteries in the United States as a contributory factor in the speculative madness that culminated in the dot.com bubble. His argument was that at a deep cultural level the lottery generated a gambler’s psyche in large parts of the public.

There were other factors too, including the growth of personal investing through US personal pension plans (401k), which brought ordinary citizens into a much more direct relationship with the investment industry and stock market. Morgan Stanley Chief Economist Stephen Roach described recently how we share an asset-based view of the world, where the universal belief is that wealth is created not by careful saving, but by the investment in rising assets, be they shares or houses. In essence, it is a universal deception that we can all achieve an excess profit from investments, rather than focusing on expanding our income and setting some of that aside in “risk-free” savings.

The problem with the mobile phone is that it will remove the immediate sense of cost from the buyer of the lottery ticket, along with some of the hassle of queuing, form-filling and paying. I wonder if it will not encourage people to buy more tickets as well, and further break the link between individuals and their need to save.

Lotteries, by emphasising luck in a society that too easily regards all success as well-deserved and derived from skill, might be seen as a good thing. More likely, they may engender a kind of nihilism, which sees everything as luck rather than a consequence of carefulness, hard work, while acknowledging the (often significant) contribution of luck. They are just the flip side of that US-style success-worship, of which George Soros is rightly critical.

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