Though Lady Luck can still work without interference, the invisible hand cannot!

Sir, Tim Harford extracts similarities to the real economy from Natasha Dow’s “Addiction by Design”, “Casino’s worrying knack for consumer manipulation” January 3. What an extraordinarily interesting and, at least for me, brand new concept.

But when Harford writes “It is hard for a free market-enthusiast like me to look unblinkingly at Las Vegas… and not feel that the invisible hand has slipped”… I must confess a slightly different vision.

For instance, when I look at a roulette table, I see that all bets, though some take you out faster than others, have exactly the same expected value, in Vegas -$0.053 for every $1… and so I conclude that there Lady Luck can work without any interference, after the commissions of the house of course.

But, when I look at banks and see how regulators have set different capital requirements based on ex ante perceived risks, which leads to assets returning different risk-adjusted returns on equity, I am absolutely convinced that the invisible hand is not given the slightest chance to operate its magic.