326 PRINCIPLES OF RURAL ECONOMICS 



latter case are more than proportionally superior. So great is the 

 preference for the former class of hazards that a great many 

 men one might almost say the majority of men will risk 

 $i on the chance of winning $1000, even when it is well known 

 that there are 2000 chances to I against their winning. That is 

 why lotteries flourish where they are not suppressed by law. But 

 very few will risk $1000 on the chance of winning $i, even if 

 they knew that there were 2000 chances to I in favor of their 

 winning. If a company should offer to sell 2000 tickets at $ 1000 

 each, only one of which was a blank, all the rest drawing prizes 

 of $1001 each, it would be making a better offer than any lottery 

 ever has made or ever could make ; but it would not be able to 

 induce many individuals to buy tickets. And yet such a com- 

 pany would be offering a good risk, as risks go, and any one who 

 would continue buying such risks would gain in the long run, 

 though he might lose all his money on the first venture. 



Outside of mining and of a few extra-hazardous enterprises, 

 industrial and commercial risks belong in the class where rela- 

 tively large sums must be hazarded on the chance of small gains. 

 This is preeminently true of the risk taken by the independent 

 farmer. Such risks do not appeal to the gambling instinct, and 

 consequently they do not attract men except where the chances 

 are good in the long run, that is, where the gains on the whole 

 exceed the losses. Those who embark intelligently on such en- 

 terprises will, in the long run, receive profits. But in such extra- 

 hazardous enterprises as appeal to the gambling instinct, by the 

 chance of large gains from small investments, men are so over- 

 anxious to invest that the losses on the whole exceed the gains, 

 and there are no profits for such men as a class, though of course 

 a few win large prizes. It is in the former class of enterprises 

 that the " irksomeness of the risk " deters men from embarking, 

 reduces competition, and improves the chances of those who 

 have the foresight or the hardihood to enter. 



