A HISTORY OF THE FINE LINE BETWEEN GAMBLING AND INVESTING

“When as a young and unknown man I started to be successful I was referred to as a gambler,” the banker Ernest Cassel once said. “My operations increased in scope. Then I was a speculator.

The sphere of my activities continued to expand and presently I was known as a banker. Actually I had been doing the same thing all the time.”

Cassel was retelling an old joke, but behind it lurked a dilemma that has troubled the legal system for a long time, a problem that is the subject of this book. For centuries there has been a consensus that investment is very useful and ought to be encouraged. There has also been a near consensus, one that has weakened recently but is still substantial, that gambling
is dangerous and ought to be at least discouraged and maybe even pro-
hibited.

But what about speculation? Speculation lies somewhere between investment and gambling. It has attributes of both. Should speculation be legal? Should it be illegal? Should some kinds be legal and other kinds illegal? Which kinds?

Throughout American history (and the history of other places too, but this book is just about the United States), speculation has presented a puzzle to the legal system. To figure out how to treat
speculation, we have always needed to distinguish between two kinds of risky commerce: a good kind the law should promote and a bad kind the
law should deter. We have always needed to draw a line between investment and gambling. This book is a history of our efforts to draw this line.

Get Your Free Copy Here