Is entertainment including gambling really of value?

One of the investment ezines I subscribe to is the The Rude Awakening from William Bonner of Agora, and the other day it published an interesting article contrasting an oil refinery with a casino, and drew implications that clearly condemned the modern American economy, for building casinos but not refineries.

It mentioned that casinos do not create wealth, only transfer it from the customers to the shareholders of Harrah's while providing a little entertainment value.

Yes, this is certainly true, and it's true that refineries do add value to the economy by turned crude oil into usable gasoline and other petroleum byproducts, and that our economy is weaker because we don't have enough refining capacity.

I also agree that most gambling is stupid (some forms which also require skill, especially poker, are winnable if you're good enough).

But if spending money on entertainment is bad, the whole world is going down to the tubes and also has. It's true that the developed world spends huge amounts of money on "entertainment" (all nonessential activities), but so does the developing world.

Spectator sports, cigarettes, alcohol, snack foods, movies, music, novels, games of all kinds . . . people in the developed world spend large amounts of money on these things also. Perhaps, in proportion to their total wealth, more than people in the developed world.

I think that there's a valid argument that all this economic activity simply transfers wealth from customers to producers. Yes, much of it creates something permanent (movies, for example), but still there's no utilitarian value to a good movie. It's valuable only for the experience of the people who enjoy watching it.

And this includes gambling. People all over the world play cards, bet on lotteries, go to casinos etc. Americans having many gambling options besides going to Las Vegas, that's new. Internet gambling is new. But gambling itself is not new at all.

As far the American economy . . . I don't know the figures, but I'd bet that our trade deficit would be a lot higher if we didn't export Hollywood movies, professional sports, pop music, and junk food (Coke is the best known brand in the world). It's probably not significant compared to the world economy as a whole, but lots of people from all over the world go to Las Vegas to see the sights and to lose money gambling, including our greatest economy rivals, the Chinese and Japanese.