Talent, luck and success: simulating meritocracy and inequality

https://medium.com/@hongsupshin/talent-luck-and-success-simulating-meritocracy-and-inequality-with-stochasticity-501e0c1b4969

by wwalker3 • 8 years ago

156 187 8 years ago

medium.com

newyankee2• 8 years ago

One 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.

rb8082• 8 years ago

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.

rb8082• 8 years ago

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...

ZeroGravitas• 8 years ago

See also, the "Just-World Hypothesis", which investigates why people feel this need to blame victims:

https://en.wikipedia.org/wiki/Just-world_hypothesis

k__5• 8 years ago

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.

mapcars• 8 years ago

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.

rainbowmverse• 8 years ago

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.

0xFACEFEED• 8 years ago

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.

denzil_correa• 8 years ago

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.

k__5• 8 years ago

"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.

decebalus1• 8 years ago

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.

kaolti6• 8 years ago

Why is it a lie? Do you disagree that hard work leads to success, within limits?

rectang7• 8 years ago

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.

mistermann2• 8 years ago

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.

WalterSear2• 8 years ago

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.

castlecrasher2• 8 years ago

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.

falcolas4• 8 years ago

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.

fullshark• 8 years ago

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.

frgtpsswrdlame4• 8 years ago

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.

Cthulhu_2• 8 years ago

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.

ABCLAW3• 8 years ago

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.

newyankee2• 8 years ago

basic necessities of life, healthcare, and no worry with emergency destroying you completely

FranzFerdiNaN3• 8 years ago

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.

hliyan• 8 years ago

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?

rectang7• 8 years ago

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.

WalterSear2• 8 years ago

The meritoriously choosing the right parents?

aantix4• 8 years ago

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.

troupe11• 8 years ago

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.

pygy_• 8 years ago

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.

simonebrunozzi• 8 years ago

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.

Tade0• 8 years ago

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.

aantix4• 8 years ago

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.

pintxo4• 8 years ago

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.

toasterlovin• 8 years ago

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.

chmln• 8 years ago

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.

stcredzero• 8 years ago

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]

There was already a Declaration of Universal Human Rights from a commission headed by Eleanor Roosevelt.

namenotrequired• 8 years ago

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.

chongli• 8 years ago

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.

SheepSlapper2• 8 years ago

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.

amelius• 8 years ago

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.

s73v3r_14• 8 years ago

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.

tdb7893• 8 years ago

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.

commandlinefan• 8 years ago

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.

kolbe3• 8 years ago

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.

jsweojtj• 8 years ago

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.

zappo2938• 8 years ago

“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

Thiez2• 8 years ago

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).

dalore• 8 years ago

Perhaps talent in this case refers to ones talent at salary negotiation?

interlocutor2• 8 years ago

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

RcouF1uZ4gsC• 8 years ago

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.

sametmax4• 8 years ago

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.

new_hackers• 8 years ago

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.

frgtpsswrdlame4• 8 years ago

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.

troupe11• 8 years ago

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.

notspelledright• 8 years ago

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...

kolbe3• 8 years ago

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?

refurb4• 8 years ago

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?

kolbe3• 8 years ago

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.

falcolas4• 8 years ago

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.

lbriner• 8 years ago

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!

sol_remmy3• 8 years ago

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.

dsacco3• 8 years ago

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.

sol_remmy3• 8 years ago

You're still giving market share to the "open source winners". Linus and RedHat have both made piles of money.

dasil0032• 8 years ago

The GP is about popularity not freedom.

lmcarreiro• 8 years ago

"And don't watch anything Disney." It's difficult since Star Wars now is Disney. But you made a really good point.

runeb2• 8 years ago

How can it be inequality if you are not comparing someone who delivers the exact same service or product?

troupe11• 8 years ago

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.

monocasa2• 8 years ago

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.

Thiez2• 8 years 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?

sol_remmy3• 8 years ago

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.

DoreenMichele3• 8 years ago

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.

lanius• 8 years ago

Was that book Harrison Bergeron?

joshuaheard• 8 years ago

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.

troupe11• 8 years ago

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.

s73v3r_14• 8 years ago

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.

solidsnack90004• 8 years ago

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.

Retric5• 8 years ago

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.

quotemstr• 8 years ago

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.

solidsnack90004• 8 years ago

“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.

all_seeing_eye• 8 years ago

Appealing to luck is absolutely unscientific.

garyfirestorm2• 8 years ago

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!

DoreenMichele3• 8 years ago

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.

arnold8020• 8 years ago

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!

Talent, luck and success: simulating meritocracy and inequality

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