The Ethics of Banking: Conclusions from the Financial Crisis (Issues ...

128 9 Financial Wagers, Hyper-Speculation and Shareholder Primacy
because their generating factor is not knowledge but chance. The sporting bet is the
transitional form between the chance-driven wager and the knowledge-based wager,
where it is not always clear whether a successful outcome is predominantly due to
luck or factual knowledge. In the English discourse, when modern financial markets
were first emerging in the nineteenth century, a distinction was made not between
financial betting and gambling, but between financial speculation and gambling, i.e.
legitimate speculation and mere chance-driven gambling. 15
E. J. Carter shows how, after the differentiation of wagering and games of
chance in nineteenth-century Germany before and after the founding of the German
Empire in 1871, both advocates and critics of the new forms of financial speculation
grappled to properly understand financial speculation and to differentiate between
speculation and games of chance. 16 Unlike France, Germany in the second half of
the nineteenth century wanted to realize a German mode of economy without excessive
speculation. The futures market for commodities and stock futures came under
particular criticism, and some parties called for regulation of the futures markets.
In his article “Börsenspiel” [Stock market gambling] in 1891, Emil Struck
pointed out that between one-sixth and one-tenth of trade on the European stock
exchanges at the time led to no change of ownership. He argued that this disparity
between trading and exchange of ownership suggested a high volume of pure
gambling on the stock exchange and cast the stock exchange in a questionable light,
even if one granted stock exchanges a positive role as capital markets. 17
In 1892, after a financial crisis in Argentina, a government commission led
by Imperial Chancellor Count Leo von Caprivi (who had replaced Otto von
“Wagers on sporting events placed with bookmakers on the basis of a state-government
license to carry on such a bookmaking business are ‘state lotteries’ within the meaning of
§ 1274 ABGB. Accordingly, such a bookmaker’s betting debt is, in any case, enforceable
provided that his contract partner has actually paid or deposited the stake. In contrast, if
such a bookmaker has credited the amount of the stake and the contract partner has lost the
wager, a claim for the stake is unenforceable.” (Own trans. from the German.)
One might critically object that the enforceability of a gambling bet does not necessitate the elimination
of the distinction between a game of chance and a wager. If the game, as the Austrian
Supreme Court requires, conforms to certain formal conditions, it can still provide grounds for
enforceable performance even if it does not form a common genre with the wager.
15 DAVID C. ITZKOWITZ: “Fair Enterprise or Extravagant Speculation: Investment, Speculation,
and Gambling in Victorian England,” Victorian Studies, 45(2002), pp. 121–147, here p. 143. Cf.
also URS STÄHELI: Spektakuläre Spekulation. Das Populäre der Ökonomie [Spectacular speculation.
The popular side of the economy and of economics], Frankfurt am Main (Suhrkamp)
2007, who makes reference to England and the USA, and NANCY HENRY, CANNON SCHMITT
(eds.): Victorian Investments: New Perspectives on Finance and Culture, Bloomington, IN (Indiana
University Press) 2008.
16 The author derived important insights for the historical considerations on speculation and games
of chance from Session 153: “Political Culture of Speculation: Stock Markets and Gambling
Casinos in Nineteenth-Century Europe” at the 2003 Annual Meeting of the American Historical
Association, Chicago, 5 January 2003, and particularly in the paper given by C. J. Carter at this
session, which was incorporated into CARTER (2006).
17 EMIL STRUCK, article on “Börsenspiel” [Stock market gambling], in: Handwörterbuch der
Staatswissenschaften, Jena (Gustav Fischer) 1891, pp. 695–704, here p. 695.