Although the longer-term impact of the UK Gambling Bill, announced today, on British gaming habits remains unclear, it has been interesting that the press emphasis on objections comes from moralists like the Salvation Army. It is conceivable that a more regulated industry, with fewer gambling machines in locations not primarily intended for gaming, like burger bars, could see a decline in gambling addiction. However, it would be nice to see the debate enlarged to encompass the kinds of points raised by Robert Shiller as per my earlier post, namely that a gambling culture increases the possibility of speculative bubbles emerging in investment markets.

Dismissing gambling as just another leisure activity is a libertarian conceit. In fact, it is one area where the state can legimitately play a role in moderating behaviour.

The UK Pension Commissioner’s report, published last week, draws a link between the growing pensions crisis and the housing market, which press coverage generally seems to have overlooked. Highlighting an estimated 400,000+ Buy-To-Let mortgages on rental properties (often several in the hands of one individual), the report suggests the use of BTL as a “savings” device is likely to be very volatile with wildly differing potential pay-offs for different individuals, depending on how shrewd, or more pertinently how lucky they are. This is largely because of the leverage/debt involved.

However, in aggregate, the report points out that by driving up house prices, and removing housing stock from the owner-occupied sector, BTL sets back the opportunity for first time buyers to enter the market, and saddles them with mortgage debt until much later in life than was the case for earlier generations. This in turn compounds their savings problem ahead of retirement.

Perhaps most noteworthy in the report was a large section on behavioural economics, which indicates when the recommendations are delivered next year, they will be much better framed in the light of human behaviour and our cognitive biases than previous government attempts to encourage saving.

To say late football manager Brian Clough was outspoken is an understatement. He was probably the big mouth character of the 1970s and 1980s in sport, and a lot less appealing in many ways than Mohammed Ali, with whom he vied for the title. In a tribute to the footballing legend on BBC1 (Wednesday Oct 13 10:25pm), a much richer picture emerged of a family man, with a sharp intellect, whose highly successful playing career was cut short by a tragic injury. They say that great players don’t often make great managers, but Clough was definitely an exception.

Contributions from chat-show host and sports journalist Michael Parkinson and one of his former players appeared to give some original insights into how he was able to make a difference (it was not cash and top players that delivered his success.) Parkinson highlighted the fact that he could take under-achieving players and turn them into greats. This seems quite important. Other players chimed in with how demanding he was, if not brutal. But perhaps the best intervention which indicated that he was a process driven manager rather than results driven, was in the contribution of one player who said you never quite knew where you were. To paraphrase: “You could be 3-0 up at half time and he’d come into the changing room and give you a right bollocking. Another time, you’d be 2-0 down and he’d come in and say ‘Perfect lads–more of the same in the second half.’”

It takes a huge amount of courage to ignore the short-term result, even when it is positive, in favour of a process that will deliver longer-term success, not least because the wider community of interests, owners, managers, shareholders are victims of their own loss-aversion and will prefer success in the short-term no matter how it is derived.

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.

The FT produces a timely reflection on the real nature of neo-fundamentalist Islam today. The author, Oliver Roy, argues cogently that the form of modern radical Islam characterised by al-Qaeda, and that is attracting misfits from the Moslem west and elsewhere in large numbers, is powerful and dangerous because it operates outside of, and even in opposition to, the social and political context of traditional Islam. This is not particularly surprising. Manuel Castells notes the rise of religious fundamentalism as a function of what he calls the network society, and which Roy describes as globalisation. However, in that traditional Islam is tarnished by this new iteration, understanding the two distinctly different types of religious expression is very important. John Allen Paulos notes that religious expressions which is cloaked in traditions and customs that reinforce its social context are much safer than those which eschew such traditions and emphasise a “pure” reading of the religious scripture. Tradition acts as a kind of restraint, whereas texts without their social context are open, almost like random data, to infinite interpretation. As Roy says: “Websites and chatrooms compensate for the lack of real social roots.”

Perhaps Roy is reiterating nothing more than common sense to say that these radical movements, in turning themselves against dominant ideology of capitalism, have replaced the Marxism of the 1970s in the lives of the alienated and culturally disposessed.