Talent, luck and success: simulating meritocracy and inequality
medium.comOne of the biggest lie sold in the West is that if you work hard, give everything you should succeed. This has grave implications on policy and really blinds people born with a silver spoon to the real problems in society as they have a 'i deserve it and they don't syndrome'. Contrast this with a poor society that is growing rapidly where you see islands of wealths with certain individuals, at least people over there do not harbor illusions of meritocracy.
In general the more educated and developed a society is, it is much more meritocratic than others, however i still feel it is not enough especially for those who have everything stacked against them.
May be sometime in the future we would have a universal human rights charter that expands and decides what are the basic needs of a human that a society should provide in exchange for basic responsibilities. This way life will not always be a rat race and the poorest and unlucky can at least have some dignity.
Depends what you define as success. Hard work generally does lead to gainful employment and the ability to afford a home/car which used to be the canonical symbol of success in America.
If you think success is "be as rich and respected as I desire to be" then that absolutely will not hold.
Yes, if the baseline for the richest country in the world is "has a roof" then hard work mostly is enough to succeed. But there are too many people who work extremely hard, sometimes at two or three jobs, who barely can afford to eat and need government assistance. So no, hard work is not a good terminology.
There simply isn't a link between "working hard" and any measure of success above the lowest baseline. Some people succeed because of a small one million dollar loan from their parents without having to ever work hard.
The difference is where you start. If you start lower middle class or working class, odds are working hard will get you at best stable employment and the ability for your children to do something. Start upper middle class or upper class and you're going to the best high schools, best colleges, and have a shot at politics or being worth 70 billion dollars.
I've met too many poor and undereducated people who are as capable as my coworkers who went to Harvard, but the poor and uneducated have to work extremely hard, be extremely lucky, and do things others can't imagine to succeed.
The system is rigged against them, and it's hard for the well-off to admit that they got a 30-yard head start or for them to begin to understand it. Maybe that's why the system remains as it is, with the same millionaires and billionaires telling people who make 30k a year how they should live.
I don’t think it’s realistic for everybody to “have a shot at politics or being worth 70 billion dollars.”
It used to be well known that it takes generations to move up the class hierarchy but that concept seems to be lost to time. Now we see a lot of complaining that literally everyone doesn’t have access to an upper class lifestyle. I’m not sure how that would even be possible or why it would be desirable.
Not everyone will be successful. I’m highly skeptical of any philosophy that doesn’t factor that concept in.
In many real estate markets in the west, gainful employment substantially above the median income is still not even close to enough to secure a reasonable sized 'home'.
Then there are places like Vancouver, where the average yearly income is less than the average yearly payments for residential properties.
But if you got in and leveraged yourself to the hilt starting in 2008, you could own a sizable equity stake in a growing stable of 30+ detached dwellings if your relationship with your local mortgage broker was on point.
Why does success mean being able to afford a home in one of the most expensive real estate markets in North America?
If I were to say "I'm not successful because I only make $200K and can't afford a home in Manhattan", people would laugh in my face.
I think we're radically changing the goal posts of success if a wide swath of educated, hard working young professionals can't afford to lay down roots in the cities they grew up in because of the current absurd asset bubble's effect on home prices.
Additionally, your example is kinda silly. on an income of $200k, you can afford a high end luxury apartment with approximately half of your income - as a bachelor.
I don't disagree that real estate is inflated due to cheap money, but I would challenge the idea that just because you were born in a city you have the right to expect to be able to own a home there.
As for the $200K comment, I meant own a home, not rent an apartment.
No, but if you work in a city, you should be able to afford a home there. And that's increasingly not the case anymore.
Are you saying extreme length commutes should be the norm?
They already are in NYC, but thankfully the train and subway alleviate that somewhat.
The interesting thing is that people are willing to put up with commutes that long. Or, they just suck it up and move their family into a one-bedroom.
Point is, if people aren't willing to do it, it won't ever change.
200k annual income is enough to service the mortgage on a luxury apartment on Manhattan proper without straining the budget too much. This is about owning, not renting.
If you meant 'detached house' by home that's another thing entirely.
Though getting the money for a down payment is a bigger problem. It takes a while to save up the $250K down + closing costs (let's not forget that 1% mansion tax) on a $1.2M one bedroom apartment.
I think you have it backwards. It’s not that there is an asset bubble, it’s that labor is feeling the effects of globalization. The lifestyle that people in the US have come to expect (urban home ownership for instance) was a historical anomaly based on the United States unique position as the leading super power post two world wars that decimated the rest of the globe but pre labor globalization.
The reality is most people will never attain the 20th century consumer lifestyle and I think a lot of people would argue that’s a good thing.
Depends on what you define as hard work. There's stories on Reddit's late stage capitalism subforum about a graduated biochemist entertaining customers at Starbucks with random facts; it was considered cute by the original poster, like, wow, a smart barista. While it was sad that he worked hard to get his papers but couldn't land a job.
Simply because they worked hard to get the degree doesn't mean that the degree is useful, or benefits society.
If there is currently an over saturation of bio-chemists in relation to the amount of jobs open, he cannot add anything to the greater food. From that, there is no reason that his degree/hard work should grant him personal benefits, as he would be taking more than he is giving. Very few people would argue that someone who does a bunch of worthless hard work (something like digging ditches and refilling them) deserves stuff, simply because it required a lot of effort, as what they are doing adds no value to society. Therefore, if the biochemist has a degree that took him a lot of time and work, but isn't needed, there is no reason he should get benefits just because he did work.
I believe the issue is people saying "hard work leads to success" fail to add on that "hard work leads to success, given that you are doing something valuable".
Maybe it should be a little more clear what is considered 'valuable', before people spend years of their life's efforts and a great deal of money on education.
The data is readily available to make an informed decision. It’s the responsibility of the person getting in debt to do the research.
Except that can change within the 4-5 year lag time between entering school and graduating.
People definitely should not be making huge bets on such unstable industries.
Forgive my ignorance - where is this data?
Pretty much everywhere. Here’s the first google result for “starting salary by major”: http://time.com/money/collection-post/3829776/heres-what-the...
I don't see how job opportunities in any field reflect on whether or not hard work is effective?
It proves that hard work had nothing to do with succeeding. Getting a biochemistry degree is hard work yet it gave the owner nothing more than a job a high schooler can do.
Presumably they worked hard to get that degree.
I'll throw in a personal anecdote too.
The hardest worker I've ever met was the manager of the produce department at a grocery store I worked at as a teenager. He was here on political asylum from a South American country. His (and my) manager lied to the state department to get him deported because "Mexicans need to go back to where they belong". Afaik he's now rotting in a particularly shitty prison despite doing everything he should have and more.
basic necessities of life, healthcare, and no worry with emergency destroying you completely
Not really... I've known hard workers, they work hard, no success, they work hard, an unlucky event intervenes, they work hard, still no success, so on and so on and so they ask: what's the point in hard work? Can you blame them? Even to be a hard-worker implies that you've been lucky enough in life to see a correlation between hard-work and success.
What does "no success" mean in this context?
I believe this comment is going to trigger my rate-limit so apologies for not being able to give further context. But to one: how about being poor, working hard and then staying poor?
More importantly why should it matter how someone defines success? I think the false and self-perpetuating notion of meritocracy is massively benefitted by the lowered expectations of the lower class. If I'm born poor, making it to lower middle class could be a huge success for me, if I'm born rich that same outcome would be a massive failure. Even to acknowledge that that is true is admission of how massively tilted opportunity is. If the poor and the rich had the same visions of success, they dreamed the same dream, do you think we could still say with a straight face that, really, hard-work is the most important factor in success? I don't think so.
Let's go with homeless. Plenty of hard workers end up homeless.
Chris Dillow is my favorite economics blogger. http://stumblingandmumbling.typepad.com
One of his quotes from memory is "Meritocracy is the myth that justifies inequality", which explains a lot of the current world.
Some parties here in Germany actively pushing this.
They talk about equality of opportunity and not equality of outcomes.
But what can you do?
You're phenotype is mostly determined by stuff you can't control.
If you have low conscientiousness and a low IQ, you're basically f*cked and you can't control this either.
Even if you're high on openness and have a average to high IQ, you're still playing a high risk game.
I do agree to equality of opportunity and not equality of outcome; those people with low IQ won't end up in the high tiers of e.g. the scientific world, simply because they can't.
Equality of opportunity does not rule out a proper socialist system. You give everyone the same opportunities at life and work by e.g. affordable health care and insurances for everyone, but also scholarships for everyone so they can follow what they want to do instead of be restricted by e.g. what their parents earn. And if you can't work because of whatever reason, you don't have to end up on the streets.
Equality of opportunity gives everyone the chance to graduate university; equality of outcome gives everyone a university degree regardless. I'm probably misinterpreting it.
But give everyone the opportunity, and there will be enough social mobility so that people now born in poverty can grow up to become e.g. software developers, and pay that little equal opportunity was paid for them during their education back tenfold within just a couple years of working in that industry.
That's my experience anyway, my dad was a not-greatly-paid metalworker with a high interest mortgage (as was the times back then) and three kids, I'm a college graduate and my first job paid almost as much as his.
I don't really think this is the problem here.
Sure, you shouldn't give any idiot a degree without doing something for it and yes, you shouldn't make it harder for intelligent people to get degrees, just because their parents are poor or something.
But if you have low conscientiousness and low IQ, that was also given to you without asking. It's playing on the same level as poor parents.
With your proposed change (which is already done in countries like Germany, we have almost free healthcare and education) you still have 50% of the population that has a IQ below 100.
This is only bad because of what, job market preferring to hire geniuses if not at least above average people making 50% of population or so unviable? In addition setting relatively insane filters on the other half limiting them too.
Often for quite dumb jobs too.
Sounds like a systemic problem.
Why would the military filter if below average people could do meaningful work today?
Okay they don't filter 50%, only 15% but that's still many people
>If you have low conscientiousness and a low IQ, you're basically f-cked and you can't control this either.
The point about IQ is definitely worth worrying about. But the idea of moralizing a person with low conscientiousness as particularly f-cked (implying that they have gotten an injust dessert) seems odd to me. I have seen several sociological studies linking high conscientiousness with high income and other good economic/ health outcomes. To me it seems that not having the characteristic trait of "wishing to do what is right, especially to do one's work or duty well and thoroughly" would have predictable bad outcomes, and there is nothing other than changing your approach that would result in anything otherwise. There is no injust dessert; there is only reality here.
Even with government/charitable intervention that is both well-intentioned and well-designed, those who are not conscientious will lag behind.
Edit: this particular comment has led me to a fair bit of introspection. Perhaps a Utilitarian formulation would be a good way to state the problem. Let's build a hypothetical world with two (otherwise equal) groups. A Utilitarian might explain the two populations (the conscientious and the unconscientious) as follows: a group that has a high utility associated with (aka highly values) good outcomes, and a group that has a low utility associated with (aka does not highly value) good outcomes. This definition is of course viewed through the lens of what we define as a good outcome.
If we let the two groups act out their personalities over time, one could say that the resulting outcomes are simply the two groups expressing their preferences. When the unconscientious group sees that the conscientious group has built better outcomes for themselves, how do we express the morality of this situation?
This hypothetical example doesn't help.
If you are open and smart (openness+high IQ) you are creative and can do things people without these traits can not.
Such people can have low conscientiousness.
But even if they don't show up at 9 o clock, they could still be helpful to society.
To add to this - yes he's not the only one who talks about it, the idea is even on the wikipedia page for meritocracy.
Its worth following Chris, much of what he talks about is outside the world of regular media ideas, and usually has lots of interesting references.
On this topic - he often says that social mobility is not a great goal to aim for, helping working & middle classes achieve interesting & rewarding work with security is better goal.
http://stumblingandmumbling.typepad.com/stumbling_and_mumbli... http://stumblingandmumbling.typepad.com/stumbling_and_mumbli...
See also, the "Just-World Hypothesis", which investigates why people feel this need to blame victims:
Please, it's not the West: it's the anglo-saxon West (US, UK), or in general countries with a strong calvinist influence. Mediterranean countries (Italy, Spain, to some extent France) don't share that same mindset.
> One of the biggest lie sold in the West is that if you work hard, give everything you should succeed.
Even if it were strictly true, this ignores the fact that the ability to work hard is mostly determined by one's genes: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2762790/
The main merit there is to have the right genes.
One of the biggest lie sold in the West is that if you work hard, give everything you should succeed.
How is this a lie? There is no guarantee, just good odds.
at least people over there do not harbor illusions of meritocracy.
[Citation Needed]
May be sometime in the future we would have a universal human rights charter that expands and decides what are the basic needs of a human that a society should provide in exchange for basic responsibilities.
There was already a Declaration of Universal Human Rights from a commission headed by Eleanor Roosevelt.
>May be sometime in the future we would have a universal human rights charter that expands and decides what are the basic needs of a human that a society should provide in exchange for basic responsibilities. This way life will not always be a rat race and the poorest and unlucky can at least have some dignity.
Life has always been a rat race. The only reason that it isn't for some people right now is that we are at a very unique time in human history where we have greatly increased our ability to produce food and, at the same time, have extremely low birth rates as a result of being poorly adapted for modern life.
This, too, shall pass.
> One of the biggest lie sold in the West is that if you work hard, give everything you should succeed
I think this used to be true decades ago when you could without much effort get a well-paying manufacturing job with just a high school diploma.
It would be foolish these days to rely on just "working hard". Not everyone "works hard" equally - it is important to work hard in the right direction.
To work as say a Starbucks barista even full-time and expect a house, a car, and a luxurious lifestyle, then after failing to achieve that exclaim "meritocracy doesn't work" is narrow-minded at best.
What if the problem is that the results of merit accumulate geometrically, so that beyond a certain threshold, some people just start rapidly pulling ahead of the pack?
That's a choice that society has made, through laws and institutions which benefit the wealthy -- such as treating corporations as people. It doesn't have to be that way.
There's a natural power law distribution to many things. Economics is a natural force. We can't change it just by dictating that we'd like some things to change, just like we can't change other natural elements by fiat.
There's a process, a technology, a science that has to be applied to shape and command natural forces. Human psychology is no exception. Things must be done within workable, realistic parameters. We can't just say "everyone will share and be happy and nice now" and expect it to work like that.
"Corporations as people" is a massive politically-charged misnomer that doesn't mean anything by itself. The entire point of incorporation is to create a separate, independent legal entity divorced from its principals. This is what is meant when "legal personhood" is discussed. You have to be specific about what you'd like changed.
We can absolutely change economics. We - our societies by the means of our governments - have set rules for the economy for centuries. Think taxes and regulations.
Right, let me be clear. I'm not saying that we can't or shouldn't attempt to change anything about our economy. I'm just saying that we can't do this by dictum, because an economy is a natural force that emerges based on extant factors, like weather.
There are rules and laws, like taxes and regulations. These are meant to effect the underlying economy; they are not the underlying economy itself. The economy naturally emerges as people make trades based on what they believe their local optima.
We can (and probably should) do things to try to change peoples' perceptions of their local optima to better align with what we believe to better approximate global optima, but people won't simply accept the dictation of a new optimum if it doesn't align or compute internally. It has to make sense to them or they won't make the trades we want to incentivize.
The tax code is such a complex disaster for precisely this reason. It's the most direct way the government has to bias or influence the economy toward certain trades and away from others, so they adjust the tax system to try to affect the calculation of one's local optimum for a given trade.
The debate over which rules, regulations, incentives, and disincentives work best, as well as the holistic systemic approaches that tend to result in the best overall outcomes, is an entire field of academic study called "economics".
Economies cannot be trivially changed by fiat any more than the weather can. Yes, we have governmental standards around meteorology, but making a law that all thermometers must now read 74 degrees F does not magically modify the underlying system. It does not change the actual factors that occurring in the physical world. It just creates a credibility-destroying facade.
The same is true in economics. Pretending otherwise is simple naivete.
Agreed. Thx for the clarification.
> Economics is a natural force.
The extent to which "natural" inequality is amplified by institutions varies. Dictatorship is a very "natural" way to distribute rewards.
We don't have to accept dictatorship as our destiny just because it is "natural", nor do we have to accept current levels of economic inequality as immutable.
First, dictatorships are anything but "natural". They require a massive amount of effort and savagery to maintain and enforce effectively.
Second, I'm not saying that we should treat economic inequality as something that's static or immutable any more than any other natural force. I'm saying that we have to recognize that natural forces dictate behavior and economics, and that you can't change natural forces by decree alone (e.g., passing a law that says "everyone now must share"). We have to really appreciate and understand the processes and motivations that drive the behaviors if we want to address them in a meaningful way.
We have to be honest about how changeable certain things are. For example, we have not, as yet, found a way to control the weather explicitly, but we have coping mechanisms like air conditioning that mitigate some of the negative effects. This didn't happen by saying "It shall always be 74 degrees indoors at all times" and then laying down stringent ideological enforcement to ensure that everyone accepted and believed that it was always 74 degrees. It happened by experimentation, tinkering, and respect for the constraints of the reality that allowed us to discover a non-ideal but workable solution that mostly handled the problem of uncomfortable heat.
There is not necessarily any reason to believe that the current mix of inequality conditions are particularly cruel or unfavorable. American free-market enterprise may not be perfect, and I'm not saying that there are no systemic issues or that things aren't worsening, but our economic system is historically workable and reasonably well-tuned. It has proven much better than many competing systems. We have to be honest about where we are and what's possible.
We can't simply change "the rules" and expect a good outcome, as the comment I replied to implied. There is no magic wand and no overnight perfection.
> There is not necessarily any reason to believe that the current mix of inequality conditions are particularly cruel or unfavorable.
This is precisely the arbitrary value judgement that we do not have to accept. You (and others) don't believe that it's particularly cruel or unfavorable, and you're just wrapping that judgement in a mantle of inevitability.
> This is precisely the arbitrary value judgement that we do not have to accept.
Sure, I agree. Neither of us made the case for particular cruelty / non-cruelty because it's not really the point. My intention was only to broaden the scope and perspective of the reader to view the economic system in its macro-level historical and global context, and compare in reference to the natural forces and conditions that cause economies to emerge. I personally think it's hard to argue that things are particularly bad right now, but I certainly don't want to stop people from trying if they are adequately informed and really believe that.
The point is that whether you think our system is great or terrible, you can't change it by dictum. It doesn't bode well that you've apparently dismissed the whole crux of the argument because you believe that we may have a different ultimate value judgment.
>You (and others) don't believe that it's particularly cruel or unfavorable, and you're just wrapping that judgement in a mantle of inevitability.
I mean, like I said above, whether I believe that or not, it's neither here nor there. You still have to identify specific things that you want to change and the mechanisms by which that supposed change would operate, because "We'll just demand things change" is not a serious approach to anything.
You and I may have different opinions about a certain piece of software and its subsystems, and that's all well and good, but neither of us would take someone seriously who showed up and said "We have to just write 'STOP CRASHING' at the top of each file". That's not how any of this works!
> The point is that whether you think our system is great or terrible, you can't change it by dictum.
> "We'll just demand things change" is not a serious approach to anything.
> ...neither of us would take someone seriously who showed up and said "We have to just write 'STOP CRASHING' at the top of each file".
You're arguing (at great length) with straw men.
(I think you feel like you're being reasonable, but having words put in my mouth like that is infuriating.)
> I think it's hard to argue that things are particularly bad right now
That's the crux. It's your value judgement, and it is not legitimized by the rest of your rhetoric.
>You're arguing (at great length) with straw men.
Here's the original comment I replied to:
> That's a choice that society has made, through laws and institutions which benefit the wealthy -- such as treating corporations as people. It doesn't have to be that way. [from https://news.ycombinator.com/item?id=16619025 ]
The implication I took away from this is that economic conditions are the direct result of "a choice that society has made". This is, IMO, far too simplistic. That's what I'm arguing against.
Because economies are living natural systems, policies, dicta, and regulations may be issued with the intent to cause a direct economic outcome, and in fact cause the exact opposite response. The reason economics is an independent field of study is because it is not at all simple to determine how individual choices, let alone far-reaching policy decisions, will ultimately impact economic conditions. No one disagrees that social values and choices can influence economies. It's just not a simple matter to make sure you're getting the desired result, or to establish reliable causal links.
Just as in all but the most dramatic instances, you can't definitively say one way or the other "I have cancer today because I accidentally swallowed a piece of astroturf 21 years ago", you can't definitively say "Policy X resulted in the [prosperity/bankruptcy] of the relevant economy".
The work of trying to model, understand, and yes, ultimately learn how to influence, the operation of this complex system is economics. It cannot be trivially dismissed.
Let me note here that I am not claiming any specific thing is an inevitable outcome of any economic system, nor have I made that claim elsewhere in this thread. In principle, you and I could be in complete agreement about the things that need to be fixed and corrected. But because I made a tangential comment that I don't think we're in such a bad way at the macro scale, you're throwing the baby out with the bathwater, including forgoing any opportunity to expound on the specifics that underlie your POV.
I also addressed your assertion that "corporations as people" is an example of such a choice. Corporate personhood is a technical legal topic and it's what allows, e.g., corporations to enter into contracts, and to have their assets protected by due process. There is not really a separate legal conception of corporate non-personhood as far as I know (I'm not a lawyer). So saying this is an example of a social choice that creates economic inequality and leaving it at that is tantamount to simply saying we shouldn't have corporations at all. More exposition is needed for that statement to have any value.
You are correct that you've never said verbatim "the economy can be changed by dicta", but the implication I took from your post is that you believe it can, by, e.g., saying "corporations are no longer people" and expecting this to mean something.
> That's the crux.
No, I've spent about two lines expressing my personal sentiments about that. You are dismissing everything else I'm saying based on what you assume is a difference in judgment. That's not how substantive disagreements work -- it's how blind tribalism works.
Why should we trust someone who claims an interest in making society more equal when they're so flippant with someone whom they believe may have a different conclusion than themselves? That doesn't portend equality, it portends fascism.
> It's your value judgement, and it is not legitimized by the rest of your rhetoric.
Correct. I just said this in my last post. This isn't an argument about the relative fairness of the system as it stands. I'm merely making the case that changing economies is not just a matter of issuing dicta and expecting everyone to willingly comply or conditions to magically shift (e.g., corporations are no longer people anymore, and therefore ... ???). That is a highly simplistic view.
> The implication I took away from this is that economic conditions are the direct result of "a choice that society has made". This is, IMO, far too simplistic.
This argument you have ascribed to me is beyond simplistic. It's economically illiterate. Cartoonish.
> You are correct that you've never said verbatim "the economy can be changed by dicta", but the implication I took from your post is that you believe it can, by, e.g., saying "corporations are no longer people" and expecting this to mean something.
This other argument which I am supposedly advancing is likewise, idiocy.
> That's not how substantive disagreements work -- it's how blind tribalism works.
> That doesn't portend equality, it portends fascism.
You were never having a substantive disagreement with me, but with some fictional fascist out to change the world through immoral means to achieve unrealistic goals for preposterous reasons.
Responding point-by-point to all the caricatures in those voluminous posts is a fool's game. I have faith that readers worth reaching will interpret the exchange correctly without needing me to straighten things out.
> I'm merely making the case that changing economies is not just a matter of issuing dicta and expecting everyone to willingly comply or conditions to magically shift (e.g., corporations are no longer people anymore, and therefore ... ???). That is a highly simplistic view.
That's all so obvious it doesn't need to be said.
Strip away all that, and the value judgment is what's left. It's commonly held and consequential -- so worth engaging.
The problem is the people who really understand how it works are largely the ones that benefitted from the current system and thus have no incentive to change it.
The meritoriously choosing the right parents?
Why is it a lie? Do you disagree that hard work leads to success, within limits?
Hard work only increases the chance for opportunities, to a certain ceiling. It is not, however, the only factor. Or even the most important factor.
Let's use a few sterotypes for examples: A hard working trucker will take years to set aside $10,000 in savings. An average programmer at a financial institution can do the same in months. A debutante able hire a stock broker to invest their slush fund can do the same in hours.
The trucker, in terms of advancement and opportunities, will probably max out at running their own owner-operator business. Maybe they'll get really lucky and be able to employ other drivers as well.
The programmer can probably keep raising their pay by hopping jobs every few years, until they can retire by playing the financial market with his savings.
The debutante just keeps being a debutante.
We could call the trucker the successful one - they ended up with their own business. And there's a cost, too. All of that long haul driving and manual labor moving freight has left them with severe, if managable, back pain. However in terms of capital, in terms of being able to pay for a loved one's fight against cancer, the truck driver isn't even a blip on the radar.
I understand and sympathise with that example. But surely you agree that not all lines of work can be equally compensated.
That doesn't mean that hard work is ineffective and a lie though?
It kinda does. If the "types" of work that get compensated well enough for success are arbitrarily chosen, then that indicates that hard work itself is a lie.
What evidence do you cite that they are arbitrarily chosen?
I think you need to provide evidence that they are not. But for my evidence, I would put forth important positions, like teachers, being grossly underpaid as evidence that they are arbitrarily chosen.
It’s not arbitrary at all. The market sets pricing, it’s not magic. If we fully deregulated education I bet you’d see teacher’s salaries rise. Of course then only the wealthy would get an education but it’s disingenuous to suggest demand and its impact on price is “arbitrary”.
By the market, do you mean the government? Because they set the budget for education, and that budget determines how much money is available to pay teachers with.
Or do you mean the voters, who typically vote down attempts to increase the money for education budgets - typically because most taxpayers don't have children active in education.
There are no market forces at work here whatsoever.
> If we fully deregulated education I bet you’d see teacher’s salaries rise.
One can look at private schools (including universities) and see this is not the case. The pay does increase slightly, but nowhere near proportionally to the value provided. A lot of that extra money provided by private citizens for their children's education is absorbed by bureaucracy (and football).
> The pay does increase slightly, but nowhere near proportionally to the value provided.
Maybe it’s not as valuable as you think it is. If it was, people with means would pay more for it.
Saying "The market sets pricing" is admitting that it's arbitrary.
"If we fully deregulated education I bet you’d see teacher’s salaries rise."
I don't, not by a long shot.
"it’s disingenuous to suggest demand and its impact on price is “arbitrary”."
But that's not what I'm suggesting. Demand for teachers is pretty high. Pay has not risen to meet that demand, however. Demand for software engineers is also high, but only in some places has that demand correlated with a rise in salary.
It is completely arbitrary.
Supply and demand defining price is economics 101. If you’re going to propose an alternative reality, you’re going to have to provide some data to back it up.
And Econ 101 is extremely simplified, due to being an entry level course. Go beyond the freshman level, and you'll find far more nuanced forces at play.
Nuanced != arbitrary
Positing that hard work guarantees anything is the lie. It is a narrative that has been perpetuated by all those who benefit by exploiting hard work.
Smart work ought to be more beneficial than hard work but the narrative focuses on “hard work” with connotations of pushing oneself beyond one’s comfort zone and limits, which implies increased exploit-ability.
It is an immoral statement which left without investigation causes suffering and inequality for many.
Hard work depletes the worker and is therefore ineffective as it creates an imbalance which that person, their family etc. need to pick up. This balance is not reflected by the accounting of the employer so economically it is hard to detect.
Well, no, I'd say that it means that the line of work matters much more than the amount of work put into it.
Between two salesmen in the B2B industry, the amount of work put forward will create a difference in their overall pay. But both salesmen will make more than the hardest working waiter or waitress.
Of course they can. It's a political choice not to.
I recently read Stealing the Corner Office which gives great insight into this. The premise is that incompetent high-level executives exist, so the answer isn't simply hard work.
The author doesn't specifically state it but the problem, at least in my case, is one's definition of work; I don't think I'm alone when I used to think my code spoke for itself and that's that. There are a few problems with that but essentially the issue is many of us myopically ignore other seemingly unimportant work-related tasks such as building relationships, personal marketing (I know that sounds like a buzzword phrase but it's true), among other examples.
Basically, at its core I believe that hard work does lead to success but our definition of work gets in the way.
I would also like to question the definition of “hard”. What does that mean?
Is it like the hard work of someone driven by enthusiasm and intrinsic motivation, in the state of flow? IN my experience that’s the most productive I can ever be. But it doesn’t feel hard at all.
Who and what defines the line where work becomes “hard work” and what is that extra unit worth?
I think it has a lot with the worker pushing beyond what is reasonable and sacrificing other important life aspects and needs they have in order to produce more units of work.
I find this immoral in any structure based on exploitation, which is most structures.
As an absolute, binary statement, yes, because it is not always true, not even close.
Hard work is only one component of success. Physical attractiveness and charisma are often at least as important, even though logically they seem irrelevant. Dealing successfully with humans is often not terribly intuitive.
I don't think anyone is saying they are irrelevant, nothing is black and white. For practical purposes however, hard work does lead to success.
I can think of plenty of people who work way harder than me, and have clearly no path to ever being successful (financially).
You've never known a hard-working person who wasn't successful?
It's moreso that the inverse is true. Not working hard will almost certainly not lead to success (unless your family is rich enough to where you can just "buy" more success). Working hard will not necessarily lead to success, but it's a prerequisite. The amount of work required also depends on what obstacles you're born with and degree of success is desired
I’ve never worked hard in my life and I earn more than my (hard working) parents combined
Careful when making that statement that you don't fall into the trap of believing that only physical labor counts as "hard work".
Front-end engineers who build widgets in React can make a $120,000 salary if they market themselves correctly.
Not all software work is hard work.
I'm going to say most of it that gets paid decently is. You might easily get $120k in the Bay Area, but that's nowhere near a good salary for there.
How would they go about marketing themselves correctly?
Thanks, that's what I was trying to say lol.
I don't think anyone is arguing that there aren't any other factors or that this justifies not helping less fortunate people.
Except for when it doesn't, which is the point.
It depends on who you are. If there are structural factors arrayed against you, less success and more failure will come your way for the same amount of work.
Yeah, but that doesn't mean that "work hard and you'll succeed"is a lie.
I think that the weak claim: "Hard work contributes to success" is supportable but the strong claim "Hard work guarantees success" is not supportable.
Maybe I'm overly logical and can't shake the whole "Necessary and sufficient" aspects of causality [1]. The charitable argument is that working hard can contribute to success but it is neither necessary nor sufficient.
1. https://en.wikipedia.org/wiki/Causality#Necessary_and_suffic...
It’s a half truth at best, which many regard as a kind of lie. Hard work, even smart hard work, is often necessary for success. It’s often not sufficient by itself.
With hard work you can be successful in the sense of being able to afford a basic living or being moderately middle class - which is enough for many people. The deception which looks like a lie to some is in implicating that one percenters got their wealth from hard work - most of them didn't.
AFAIK, statistics show that in industrialized Western countries the wealthy people who are seemingly successful (because of their wealth) have inherited most of their wealth or at least benefited extremely from improved conditions provided by already rich parents. In contrast to this, vertical social mobility remains fairly low and the overall gap between poor & middle class and the richest has been increasing in almost all capitalist Western countries since WW2.
So it's not literally a lie, it's just sometimes kind of dishonest and misleading. In most professions it's practically impossible to get rich from hard work.
There is plenty of empirical evidence that this is not really true. One of the pernicious things about the typical American narrative of success is that it often gets used in the contrapositive. This lets people feel good about discounting anyone viewed as "not successful" (whatever definition you want) as having been personally responsible for their own difficulties, so they can be safely ignored."With hard work you can be successful in the sense of being able to afford a basic living or being moderately middle class"
If you take the fairness out, that phrase is worse than meaningless. It applies to slaves: those who work harder are rewarded to some extent. Does that mean a slave society fulfills the ideals of meritocracy?
If you keep it as it is, it is an absolute statement as in "I can guarantee that every single time any random person works hard, he will be successful after time X" which is clearly empirically false because ignores all the (extremely numerous) boundary conditions.
The problem is exactly that, there are people who think that it is an absolute statement so poor people, unhealthy people, people in bad life conditions, etc are so just because they didn't work hard so they do not deserve any help.
Same reason that a phd isn't really a path to being a tenured professor.
Yes, it is the only way to get a tenured position, but the vast majority of people trying don't get one. And not because they didn't work hard or even because they aren't qualified.
Whatever rules in life get laid out, whether it's scoring soccer goals or everyone gets X amount of food per month, someone always becomes good at "optimizing" those rules.
We are humans born with different abilities with different tastes and strive for different things. Equalizing the outcomes of all by artificially holding some back suppresses the very creative life force in each one of us, ends in misery and progress is hampered.
Talking about the extremes, I agree.
Talking about defining sensible rules to allow a wider range of people to be successful than only those being a member of the local Golf Club, I disagree.
There should be no question that we need rules, and at the same time there should be intense discussions - if not intellectual fights - about which rules we need and how to implement and enforce them.
>allow a wider range of people to be successful
But what does "successful" mean in practice?
E.g. If there are 100 software security companies, 50% of those are below average in performance (and will probably get chosen less).
Do we no longer choose let the consumers choose? All of these software companies should now receive a percentage of business, regardless of performance/trust/expertise?
Or should the top performing companies be disallowed the following year to market or do sales in order to give the underperforming companies a chance to catch up?
What is "sensible" and who decides?
For me, this is about ensuring that all 100 companies play along the same rules. If, while following the same rule book, 10 are significantly more successful than the others, fine. If another 20 are significantly less successful, also fine.
What is no fine, is having some companies be exceptionally successful by breaking some rules. Think insider trading, it's a highly profitable business for those risking it, but has a long term negative impact on the market. Therefore we, as a society, via our proxy, the government, decided to enforce rules forbidding insider trading.
The above answers who. This leaves the question of sensibility, I am afraid there will hardly every be consensus on what is sensible or not within a diverse enough group of people. If you'd ask a bunch of investment bankers about sensible rules for banking regulation, I'd assume you'd get quite a different answer than by asking a bunch of consumer rights activists. Our current solution to this problem of finally arriving at a single "sensible" rule is the democratic process / parliament. I guess most would agree this process seems to be sub-optimal, but it seems there are not too many other options on the table.
> Contrast this with a poor society that is growing rapidly where you see islands of wealths with certain individuals, at least people over there do not harbor illusions of meritocracy.
Actually(speaking from experience) these islands of wealth only reinforce such illusions in poor countries.
The logic is as following: apparently that person is exceptional and the fact that they've managed to get wealthy within one generation is proof.
Isn't it the striving, the need to move from one circumstance to the next, is what propels us forward?
People don't make progress in spite of their struggle, progress is made because of the struggle.
This is a very good point. Regardless of talent or luck, the person who is willing to keep trying dramatically increases their chances of success. Someone who only applies for one job and stops if they don't get it, is much less likely to get a job than someone who is willing to apply for 100 jobs until they get hired.
>what are the basic needs of a human that a society should provide
Earning a living should not be a problem in the modern world with basically any kind of job. One of the big problems is people want the latest iphone, the best car, the most luxurious home, holidays, etc.
The expectation of life had been set too high to make it happen even for a small part of the population. What is actually needed is way, way different from what is being promoted by media and society.
> Earning a living should not be a problem in the modern world with basically any kind of job. One of the big problems is people want the latest iphone, the best car, the most luxurious home, holidays, etc.
Hmm.. I don't believe that the countless Walmart and Amazon warehouse employees on food stamps are at the edge of poverty because they bought the latest iphone, best car and most luxurious home.
What do you base this on? I know plenty of people working multiple jobs and saving every dollar they can who still barely get by.
You see many people in the United States who are working hard and avoiding foolish decisions that cannot seem to provide for their needs and set money aside for the future?
Plenty. Some have kids. Others are in grad school. Some are even dealing with both.
> Plenty. Some have kids. Others are in grad school. Some are even dealing with both.
Yes people who go out and have kids without thinking through how they will provide for them usually have to work pretty hard at first. Still most of the people I've seen in this situation aren't really as bad off as they think. If you didn't plan for having kids, you likely aren't in very good control of your budget either and a small investment of time in learning how to manage and budget your finances can take off most of the financial strain.
(That isn't to say there aren't some people who are in really bad situations due to random events, but I still find it rare to see people who are struggling from things that are/were completely outside of their control.)
Then you're just not looking hard enough, or your moving your goalposts of what you count. You're also falling into the trap of believing that all children are planned. Pregnancy happens even if you take precautions to have safe sex, and in many parts of the country, a person's options for dealing with that are extremely limited.
So you think the majority of the people you are referring to, were using condoms and most of them failed? I think that is unlikely. If it is unlikely then it means the fact they have kids are a reflection of their decision making, self-control, etc.
I don't believe all children are planned. Is it harder to get started in life with kids? Of course. When you choose a hard path life is harder. Not impossible, but harder. As I said, I know families with a whole lot of kids and not much education that do just fine through hard work and very careful budgeting.
"So you think the majority of the people you are referring to, were using condoms and most of them failed? I think that is unlikely. If it is unlikely then it means the fact they have kids are a reflection of their decision making, self-control, etc."
Which is what you want to believe. You want to believe that it is these people's fault; that they did things wrong, and not that it was an accident that could easily have happened to you. That makes it much easier for you to sit in judgement over them, and for you to justify to yourself that you're better than them, and to deny assistance to them. After all, it was their own fault; they were the ones with poor self control. Why should they get any help?
"Earning a living should not be a problem in the modern world"
But it is.
15% of the population have an IQ of less than 85, that's about 48 million people in the US alone.
Not even the military thinks they can do anything reasonable with them (if you under 83 they don't want you so it's probably 1 in 10 people, I guess) and they try to get as many people as they can.
That is just not true. While there may be people out there with a pathological obsession with having the "best", it isn't the norm. Unless your sample consists entirely of urban teenagers :P
Most people I meet (across all classes mind you) are scrappy and pretty selective about what they buy.
> Earning a living should not be a problem in the modern world with basically any kind of job.
It would be interesting to see the thought process and methodology that brought you to this conclusion.
I mean, I personally do agree with that. If you have a full time job, you should be earning enough to where you can provide for yourself and your family without having to resort to food stamps or welfare or anything like that. Unfortunately, Amazon, Walmart, et al disagree.
One of the biggest issues that discussions of inequality ignore is generational issues. People view wealth as an individual thing. However, if you look at American society, probably the majority has been generational. Each generation worked and saved to better their children's lives.
An example of this is probably in immigrants. Many people came with practically nothing but he clothes on their back. They took whatever job they could find and worked like crazy and saved like crazy and pushed their children like crazy. Their children in turn started out better than their parents and worked and saved and pushed their children and their children did even better. After a few generations, the descendants of immigrants have entered the highest ranks of society.
What drives the "myth" of the American dream is not necessarily that I who started out with nothing will be well off. It's that through my hard work and their hard work my children will be better than me and my grandchildren and their children will be well off even though I started with nothing.
That version of the American dream has worked far more reliably than the individualistic model. Even once persecuted and discriminated against immigrant communities in the US have succeeded in this version of the American dream.
I'm not sure the Y-generation would agree it worked for them.
The student loads have never been such a burden. The cost of housing skyrocketed. If they want to eat for the same price as their grand parents they need to eat junk food.
I mean: my grand parent could buy their own house while only one was working, and a job that didn't require any diploma.
But the flat screen prices are very cheap so they got that going for them.
There is truth to this, however there has also been major changes to how we live and the expectations.
"my grand parent could buy their own house while only one was working, and a job that didn't require any diploma"
Yes, but they probably couldn't buy a house anywhere in the world they wanted. The house size was probably much smaller than the sizes of today's suburban houses. I would argue that one could by a small, economical home in the midwest.
"If they want to eat for the same price as their grand parents they need to eat junk food."
Again, look at the diet lifestyle choices of Gen Y versus their grandparents. My grandparent (I'm a Gen Xer) told me stories of eating onions for a month because his parents were migrant workers and they worked picking onions when they were in season.
Even today, it is possible to eat simply (rice, beans, in-season vegetables and fruits) for a low-price. You won't be eating much meat, and you won't be eating "luxury" items. But that is very similar to how people ate in the 30's, 40's and early 50's.
He was selling shoes. Their house has 4 bedrooms, 3 living rooms, 2 offices, a garden, a court, a garage, a basement, a 2 cellars, an attic, and 2 bathrooms.
And yes, not in a big city. But his job paying the house was not in a big city either.
While housing prices in is little town are indeed way lower than in most parts of the country, so are the wages.
I agree for the food though. If you have somebody to do the shopping to several shops and cook, you can get something similar. But today, both spouses work quite often.
Now I'm just back from the US, and the only decent provider of vegetables that match what I'm used to eat in France and group everything was wholefood. $4 for a salad is very expensive to me. Granted I'm not native to the country and only passing by so you have options that are cheaper I don't know about. Still. I never seen that price on a salad anywhere except Japan. And I travel a lot.
>$4 for a salad is very expensive to me
i would be extremely happy to eat a meal at $4. these days i end up spending >10$ on a meal, and I am not even living in a big city in US.
Not the meal. The vegetable itself.
I think most people have no idea of what it was like living back in those time periods.
Yes, you could get a job back then without a diploma. You might be digging ditches or loading hay in 100-degree weather. I really haven't run across someone willing to work hard like that today who can't get a job somewhere.
No, grandpa was selling shoes.
I had relatives that worked at a grocery store, but they did stuff like deliver 50-pound blocks of ice all around town.
I'm pretty confident that agriculture, mining, and other work similar to what I described represented a much larger portion of the workforce than shoe salesmen did.
The American dream is about climbing from the bottom to the top, the idea that the 'real' American dream is working your ass off your entire life on the bottom rung so you can put your kid on the second rung and he can work his ass off his entire life to put his kid on the third rung and so on, always with the risk that one generation will slip and fall back down is total crap. It is antithetical to the idea of meritocracy.
Keep in mind that many of those immigrants were still doing a lot better in the US than they were where they came from. So they may "well off" in significant ways even if not compared to someone who was born here. And for some people, living past 35 is well off compared to their homeland.
I'm not entirely sure that this is correct. As an example, this recent article from the NYTimes looks at the economic status of black Americans and their children vs. white Americans and their children: [1]
[1] https://www.nytimes.com/interactive/2018/03/19/upshot/race-c...
Is talent not just a form of luck? It doesn't matter how hard you work at your low post game, you'll never learn to be seven feet tall. Those who are of that height are extremely lucky, giving them a huge advantage over other contenders for that NBA center position.
Other forms of athletic talent are less visible than height but I see no reason not to attribute them to luck (genetics, access to nutrition, coaching etc.)
We can apply this reasoning to anything where success can be measured. A great deal of business success comes down to connections which provide access to capital and access to markets. All of these things accrue to the well-connected.
All the things you mention are forms of luck, yes. And there's no way to control for them outside of some nightmarish eugenics scenario. It's a fact of life that people are different, and will excel in different facets of their lives to different degrees.
In a free market system there will always be winners, losers, and a lot of us in the middle. That's a result of the system BEING an equal playing field, talent and money are correlated. It'll never be the case that we all go into the workforce on equal footing, because we all start out in different places, with different genetics, and different upbringings. That doesn't mean someone from a poor upbringing can't work hard and raise their market value (thus making more), but it means that not everyone is going to be a millionaire.
I think you're going to have to make an argument that there actually is a level playing field. I think most of us here would hotly dispute that.
Free markets are as close to egalitarian as is possible with markets. Supply and demand set prices while skill set and productivity set wages. It's not perfect, but it's better than anything else we've tried.
Interested in why you think the playing field isn't level, outside of the "luck" aspects I mentioned earlier (since there's nothing to be done about that, life doesn't care about fairness unfortunately). I'm open to new info :)
I think you're going to have to prove that, for one, Free Markets actually do lead to those things, and for two, that our current situation is one that could reasonably be called a Free Market.
"Interested in why you think the playing field isn't level"
I think all one has to do is look at places like the inner city, where poverty is common, and where the opportunities are simply not there. And I feel it is extremely defeatist to say "We can't do anything about unfairness". I believe we absolutely can. We just don't seem to want to.
> In a free market system there will always be winners, losers, and a lot of us in the middle.
Yeah, well I'm seeing a lot of "winner takes all" lately.
If you go deep enough everything is luck. Your intelligence, height, and even your work ethic are just a product of your genetics and your environment.
It seems to me that if someone who was literally identical to me was put into an identical situation they would act the exact same way which means our actions are deterministic and only depend on the boundary conditions. Anyway, this is all a little off topic but it's interesting that even if you got where you are by working hard you are still lucky to be a person who was in the right conditions (genetically and environmentally) to be someone who works hard.
His conculsion also rests on the premise that talent is something you can measure and put a number on. In professional sports, for the most part, you can do that: your "talent" is (indirectly) measured by the number of goals you score. The more goals you score, the more talented you are. I suspect that's one of the reasons that professional athletes are a) so rare and b) so highly compensated: it's near-trivial to compare one to another; you just assign each one a number and sort the numbers. In most fields, it's a lot harder to measure talent (actually it's probably harder in professional sports, too, but the "workers" agree to it, so it stands). While it would be unreasonable, and a logical fallacy, to lay claim to the principal and state the talent drives success and therefore if you're not successful you're not talented, the author here is doing pretty much the opposite by saying that luck drives success and if you're not successful you're not lucky (therefore we need wealth redistribution). He backs it up with a lot of equations, but unless we can all agree that talent is something you can measure objectively (which we can't even do with intelligence), the equations are fairly meaningless.
Agreed.
I don't love the misappropriation of randomness in some social sciences (in this case "luck"). Outside of maybe quantum effects, there is probably no randomness in the world. Maybe those quantum effects can compound in some way to make it truly unknowable to figure out if I'll get hit by a bus today or not, but I doubt it. There're just properties of a system that are unknowable at this point because of our lack access to resources/technology to observe the system.
Nothing about the conclusions relies on talent being measurable. It's basically going, "say talent was distributed like X, and it had effects Y on the world, what would things look like?" This doesn't imply or suggest or require that talent is measurable or knowable by anyone.
> Since the talent follows a normal distribution, technically it can be negative or larger than 1, but for convenience we assume T~[0, 1]
Part of the answer to the original question is in this line. Normal distribution implies outliers - i.e. some are radically competent. In meritocratic conditions, you expect some to be radically successful, therefore creating a huge wealth asymmetry.
I’m not saying we do live in a pure meritocracy, far from it. Only that normal distribution of talent doesn’t imply wealth should naturally become normally distributed.
Everyone in this thread directly supports inequality through their buying decisions and I'm callin' them out.
Anytime you use Netflix, Google, HackerNews is supporting inequality. Every time you bought a Harry Potter book as a kid you supported inequality. You're giving more money to the winners.
If you want to reduce inequality, then buy books from unpopular authors. Use unpopular OSes like TempleOS instead of giving even more market share to Google/Apple/Microsoft. Drive cars made by less popular manufacturers. Don't read the New York Times, Fox News, or Washington Post - only blogs or magazines with a small subscribership. And don't watch anything Disney.
I really hate arguments like this. I saw this concept mocked in a book once. Among other things, it had pretty women intentionally making themselves less attractive.
We need to find ways to make smaller organizations more robust and less vulnerable to having their lunch eaten by large organizations. But this advice to not buy anything popular and only go with that which is unpopular is not the right way to do this.
Was that book Harrison Bergeron?
I don't recall. It may have been a short story rather than a book. I read it a long time ago.
I don't think your definition of inequality, which basically equals popularity, is a useful one. The article is about income inequality. While it is true that people always making the unpopular choice would reduce winner-takes-all effects, it's not worth it: it requires great personal sacrifice, and as an individual there is almost no gain: society is hardly going to benefit when you intentionally hamstring yourself by running TempleOS, or when you choose to eat at a bad restaurant instead of a good one.
Surely creating laws that try to limit income inequality makes much more sense, especially when looking at cost/benefit?
> I don't think your definition of inequality, which basically equals popularity, is a useful one. The article is about income inequality.
My definition is perfect. High popularity -> high income -> inequality. If you bandwagon onto a popular author like J.K. Rowling, then you are further enriching her and causing inequality.
If you want to legislate away inequality for say, Twitch streamers, then pass a law that no Twitch streamer can have more than 500 views. Or authors who have sold >100,000 books can no longer sell books.
It doesn't have to be the case that high popularity -> high income. That's how we structure it in our society currently but there's no reason it has to be that way.
We could still have popular things, and even reward their creators with a lot of money, but less than we currently do.
how?
On the far left, there's a saying "there is no ethical consumption under capatalism". The idea is that 'voting with your wallet' comes from a position of privilege that by it's very nature can't receive the critical mass necessary to create change in inequality. The vast amount of people won't have the spare capital to spend on simply fighting inequality, so instead what you'll see is boutique industries that make upper middle class, center left consumers feel better, but don't create any actual change. See Toms.
"And don't watch anything Disney." It's difficult since Star Wars now is Disney. But you made a really good point.
I'm not going to respond to most of your comment, but this suggestion is pretty weird:
> Use unpopular OSes like TempleOS instead of giving even more market share to Google/Apple/Microsoft
...Why? You could also just use Linux or BSD. TempleOS seems like a very odd suggestion for people looking to cut out non-free operating systems cold turkey.
Edit: In case this isn't clear, I'm responding to the commenter's commercialism thesis. I mean free as in beer, not as in speech.
You're still giving market share to the "open source winners". Linus and RedHat have both made piles of money.
The GP is about popularity not freedom.
No it isn't, it's clearly about commercialism. The commenter makes specific examples and includes the phrase "buying decisions".
How can it be inequality if you are not comparing someone who delivers the exact same service or product?
It isn't the quality of the service or product that is being compared. It is the fact that when you buy from companies with really good/popular products you are doing so with a bunch of other people and that puts more money in the pockets of the people who made quality products. If you don't like them having lots of money, spend your money elsewhere.
Is that inequality though? I believe inequality is when differences are unjust or someone or something is being discriminated against based on other things than merit or quality.
I'm not defending their position. Just clarifying what they meant. :) If someone has a better service, many people in the US feel it is just fine for them to capture a lot of the market and this isn't an inequality issue. Others think that if someone makes more money than someone else, it is inequality and should be "fixed."
Luck = Skill + Opportunity. That is, you must have the skill set to become successful, but also be in the right place at the right time to apply these skills.
Fortunately, you can increase your skill through training, reading, etc. You can increase your opportunity just by trying when you fail. Someone who only applies to a single job is less likely to be employed than someone who keeps on applying until they are hired.
But then that would mean that luck is greatly a matter of how hard you are willing to work and that doesn't seem to be a popular opinion these days.
Because it's not. Donald Trump has not worked hard a day in his life; nor have his offspring. Yet they have quite a privileged position.
Typically if someone has a lot of money, they or someone worked hard for it at some point. But yes, people do win the lottery so there are people who haven't worked for it. But the fact that there are some people who didn't have to work hard doesn't change anything I said.
America is a great place for people who want opportunities to succeed. It is a horrible place for people who are mainly focused on whether or not anyone else has more than them because the land is full of people taking advantage of those opportunities.
In a meritocratic society, there is positive correlation between talent and success. But how steep should this relationship be? If the talent-success slope is very steep (i.e., a small talent difference causes a large capital gap), you might end up having a wide distribution of wealth (severe economic inequality). On the other hand, if the slope is quite flat (i.e., a big talent difference makes little difference in capital), the society has weak meritocracy, which may disincentivize people from achievements. The right degree of steepness depends on how one defines fairness and how much inequality a society can handle.
This discussion misses one important element of returns to talent: more capital in the hands of more capable people should result in better allocation of resources, and consequently better outcomes for society as a whole. Too little inequality would, according to this view, result in destruction of capital over time, and in consequence impoverish the society.
You assume the ability to gain capital has anything to do with the ability to invest well. A quick check of sports stars shows this is very far from the case.
Talent is not universal, being a great Doctor has little to do with being a great painter or investor.
> Talent is not universal, being a great Doctor has little to do with being a great painter or investor.
You might like to think so, but g says otherwise.
Correlation != a 1:1 relationship. Top Hollywood actors might do better than the average person on average, but plenty of high income people live in vast amounts of debt.
It just has to be better on average, though, for the broader social implication to hold: allocating capital to able people isn’t just about rewarding them, it’s about what they go on to do with that capital.
That would only be relevant if their was absolutely no other way to allocate capital and maximizing ROI was the only relevant metric. Building, a X$ Yat may count to GDP as X$ worth of healthcare, but society does not care about them equally.
What's important is the outputs of society, not the accounting that occurs between effort and consumption.
All people engage in consumption, though — less able people as well as more able people. The issue is, when they aren’t, what are they doing with that capital? This relates not only to how people run a business but also how they engage with civic projects, charities and institutions like schools and universities.
There are marked differences in styles of consumption. Some of the things the Romans did, for example, are simply too destructive and wasteful for our tastes today.
If you’re saying, we can allocate capital not to more or less able people, but in some other way — to institutions or something — well, that’s true; but there still will be capital managed by individuals. When talented, constructive people rise to the top of the heap and run laundromats, computer companies, and other businesses, we are ultimately all better off for it, because those services are (a) available and (b) good. But to run such businesses people do need to accumulate capital.
My point is there is no reason to use indirect means. If you care about efficient use of capital then add a capital tax of say 1%. Now, people who get a higher ROI accumulate wealth faster rather than those who simply conserve wealth.
When accumulation of wealth is more tightly coupled with the ability to invest rather than the ability to let compound safe investments create wealth you increase efficiency.
Beyond that I don't think capital accumulation needs any incentives. People don't invest more because of changes to the tax code they simply get more money from the same investments.
“Talent” in the article seems to be specifically ability to improve one’s store of cash independently.
Some athletes may have that talent, and some not — enterprising and disciplined people are broadly effective in life while the merely gifted struggle to tie their own shoes in the morning.
Allocating capital to these latter people often does result in its destruction, as you point out. There is a social cost when capital ends up in the hands of people who can’t grow it.
There are plenty of "soft factors" at work in being successful or not. Confidence adds a lot of perceived value to an individual; their ability to work smart instead of just hard; their ability to prove they can do well in the specific context of their job rather than just be generally intelligent but not practical; their ability to make others look good or feel confident in their ability will make them get promotions sooner.
There are obviously lots of practical conditions outside of our control such as local conditions, state of the job market, being willing to relocate etc. There is also the understanding that you need to look better than the other applicants rather than just look good in isolation.
Another major issue that is rarely covered is personality types and the fact that insecurity, paranoia or other physical conditions that are obvious to the interviewer will cause you to look bad, regardless of whether they actually measure your ability to do a job.
And then there's luck!
> The new term, wT is the amount of one’s paycheck. w represents the importance of the paycheck. The higher it is, the more pay you get. w is multiplied by the talent parameter T to implement a meritocratic idea: the more talented you are, the fatter the paycheck you get.
Perhaps I misunderstand the situation, but it seems like the author is baking meritocracy directly into the model: if you have high talent then you automatically get a higher paycheck. By increasing the paycheck importance or simply reducing the event probability towards 0, this model will always produce a perfect meritocracy.
So on the one hand we have random events that have a chance to double or halve capital, but somehow a persons paycheck is a constant over their life, nobody is ever between jobs, and paycheck is entirely deterministic. I think the author really missed the opportunity to link paychecks to the random events (but paychecks would otherwise persist between events).
Perhaps talent in this case refers to ones talent at salary negotiation?
One model I don't see here is "success requiring a certain amount of capitol to obtain". If you don't have the, say, 6 capital to invest in an opportunity, you can't get the rewards for that opportunity. This applies even if you provide debt, since going into debt typically requires having existing assets in excess of the debt amount.
My hypothesis is that the starting capital will impact the distribution of capital more than talent.
Another potential model: Vary the chance to participate in opportunities. Not everyone has equal chance to take advantage of opportunities; someone living in NY will have more opportunities they can leverage than someone living in Iowa (and being able to move to NY is an opportunity in itself).
My hypothesis here is that the chance for being able to take advantage of opportunities will play as big of a role in the final capital distribution as talent.
I don't even know where to begin to critique this. It entirely leaves out factors like race and gender that are known to have an impact.
I've spent a lot of years trying to understand the details of exactly how my gender is a factor and trying to find solutions to those details. I don't believe it has to be a problem, but we know it currently is a problem, and these cleaned up models seem to never include the idea that if you are female or a person of color or gay etc, you will tend to have "demerits" or be handicapped (in the horse racing sense of carrying an extra burden).
If talent, work and luck were everything, then we shouldn't have such consistent outcomes that certain groups overall do better than others.
About a year ago, I asked similar questions about the 80-20 rule and income distributions. It seems that the simple explanation works surprisingly well. Simulate the following system and it matches real world distributions surprisingly well.
r1) Actors have normally distributed abilities r2) Actors are chosen randomly based on current winnings, the more you have won, the more you compete. r3) Winner of competition wins one point from the loser
You can find what I wrote about this at
http://www.cs.toronto.edu/~arnold/research/80-20/
including the code. It's interesting!
“Things worthwhile generally don’t just happen. Luck is a fact, but should not be a factor. Good luck is what is left over after intelligence and effort have combined at their best. Negligence or indifference are usually reviewed from an unlucky seat. The law of cause and effect and causality both work the same with inexorable exactitude. Luck is the residue of design.” -- Branch Rickey
I'd like to see a model which separates talent into many constants:
* job/income talent
* exploiting luck talent
* avoiding unlucky event talent
* mitigating unlucky event talent
If you don't even have the ability to quantitatively differentiate luck and talent, what is the point in developing an economic model completely dependent on those two things?
This is a good point. You can't actually measure any of these things, thus you can't prove them. What's the point in debating them then?
I disagree. Unprovable things can and often should be a part of a dialogue. I don't know what that has to do with unquantifiable things being left out of quantitative economic models, though.
Appealing to luck is absolutely unscientific.
luck is a loose term used in place of 'probability' eg. probability that the company having an open java developer position at this years career fair seems high because of x,y and z reasons.
eg. i got lucky, they gave me an offer letter right after the interview for a developer position!