Inequality and the Pandemic, Part 1: Luck

by John Q on September 30, 2020

Here’s an extract from my contingent* book-in-progress, Economic Consequences of the Pandemic commissioned by Yale University Press. Comments and compliments appreciated, as always.

The Covid-19 pandemic has taught us several things about inequality, or rather, it has dramatically reinforced lessons we, as a society, have failed to learn. The first is the importance of luck in determining unequal outcomes.

Some of us will get Covid-19 and die or suffer lifelong health consequences. Others will lose their jobs and businesses. Many, however, will be unaffected or will even find themselves better off. Some of these differences may be traced to individual choices that are sensible or otherwise, such as deciding whether to wear a mask in public places. But mostly they are a matter of being in the wrong (or right) place at the wrong (or right time).

Moreover, this isn’t specific to the pandemic. From the moment we are born, luck plays a critical role in our life chances. Our families may or may not be in a position to help us succeed, and may or may not hold together through our childhood. A child born into the bottom 20 per cent of the US income distribution has only a 4 per cent chance of ending up in the top 20 per cent. The opposite is true at the other end of the distribution with the striking exception of Black children, especially boys.

These facts have been known to social scientists for decades. Yet until recently, in the face of glaringly unequal outcomes, most Americans comforted themselves with the idea that the United States was a land of opportunity where everyone who worked hard had a fair chance of doing well. This was true a century ago, but now there is more mobility between economic classes in European countries than in the US.

That’s not to say everything in Europe is rosy. Piketty examined the UK and France as well as the US and found growing inequality in all three. It seems likely that other European countare are on the path towards what Piketty calls a patrimonial society, where inherited wealth is the most important determinant of success.

Luck doesn’t end with the lottery of family background. Young people who enter the labour force during a recession will experience permanently reduced life chances compared to those who enter during a boom. And at an individual level, lucky or unlucky breaks of various kinds are much more important than many of us like to believe. Robert Frank provides detailed evidence in Success and Luck: Good Fortune and the Myth of Meritocracy.

The pandemic has reinforced this lesson in the most brutal way possible. As is usual, the poorest members of society have been most exposed both to the risk of death and disease and to economic hardship. But everyone is vulnerable, and it is a matter of chance whether any of us gets infected, and whether the consequences are harmless, severe or fatal. Similarly, exposure to economic damage is largely random, depending on the way in which the pandemic affects different industries and regions.

The randomness of economic success implies that concerns about the incentive effects of high taxes on those at the top of the income distribution are misplaced. If the lucky winners in the economic lottery are discouraged from working (something unlikely to happen on a significant scale until marginal tax rates exceed 70 per cent), there are plenty of unlucky runners-up who can replace them.

  • Contingent because I’m writing on the assumption that Biden wins the US election, and takes office. While a Trump win would be an object lesson in the importance of luck, it would render any commentary on responses to the pandemic pointless as far as the US is concerned and would have drastic consequences for the rest of the world for which I have no analysis to offer at the moment

{ 32 comments }

1

CHETAN R MURTHYJOhn 09.30.20 at 6:18 am

John: “If the lucky winners in the economic lottery are discouraged from working (something unlikely to happen on a significant scale until marginal tax rates exceed 70 per cent), there are plenty of unlucky runners-up who can replace them.”

This is one of the basic errors of Atlas Shrugged and all libertarians. They imagine that some genius invents some amazing gadget, and of course his inferiors should line up to worship him and accord him all manner of wealth. The argument, of course, is that without John Galt, Hank Reardon, et al, we would all be the poorer: we would not benefit from their inventions. But (as Andrew Odlyzko pointed out in The Decline of Unfettered Research) even if that were true a century ago, it’s no longer true today. With vanishingly rare exceptions, when someone invents a new gadget, they’re months ahead of their competition, and sometimes not even that. Odlyzko gives the example of high-temperature superconductivity (with groups all over the world racing, leapfrogging each other repeatedly) as compared to xerography or photography (where the inventor was able to patent all manner of neighboring inventions, b/c they were so far ahead of their competition).

Truly, as you say, if the John Galts of the world step back, there will be a crush of people to take their places, most of them just as good.

2

J-D 09.30.20 at 6:44 am

‘In this context, Robert Frank’s Success and Luck: Good Fortune and the Myth of Meritocracy’ is a sentence missing a predicate.

3

John Quiggin 09.30.20 at 7:03 am

@2 Hit Save too soon on this one. Fixed now, I hope.

4

Matt 09.30.20 at 7:14 am

Trivial typ0: You have Covid-18 in the 3rd paragraph. At least, I hope it’s a typo, and there’s not another sort floating around I need to worry about!

Somewhat more substantive point: You say,
and it is a matter of chance whether any of us gets infected, and whether the consequences are harmless, severe or fatal.
Wouldn’t it be better – more accurate – to say it’s “largely” or “mostly” or “significantly” or something like that a matter of chance whether any of us get infected and what the consequences are? There are at least two ways in which it’s not completely a matter of chance. 1) I can take reasonable precautions – wear a mask, work at home if possible, not go to the bar, etc., and, more remotely, I can at least partially control whether I am higher or lower risk for bad medical outcomes, even if far from completely. 2) As a society, we can put in place different policies that impact both the likelihood of becoming infected and how bad the outcomes of infection will be for many people. But, if those things are true, then it’s not just a matter of chance, even if chance obviously still plays a big role. That seems worth being clear about to me.

5

John Quiggin 09.30.20 at 7:32 am

@4 Agree on both points. I’ve fixed the easy one, and will work on the other.

I apologise for the sloppiness of these drafts. But I hope that, considered as gifts, they have enough value to make it worthwhile for readers to act as unpaid editors for me.

6

nastywoman 09.30.20 at 7:44 am

@
”Some of these differences may be traced to individual choices that are sensible or otherwise, such as deciding whether to wear a mask in public places. But mostly they are a matter of being in the wrong (or right) place at the wrong (or right time)”.

How true? –
as I got locked down -(by ”sheer chance”) in Germany -(and NOT in CA) –
and so, when I read this blog from Germany –
(or Italy) – like a few weeks ago – I always wonder:
Why wasn’t – and why isn’t – there so little mentioning of ”Lucky Places” OUTSIDE
the Anglo-Saxon World?
Especially concerning the Virus – and about ”A Woman” -”A Scientist” – who protected ”her people” in a way NO ”Trump” -(the German Word for: STUPID) or NO ”Bojo” -(the German Word for ”CLOWN”) – EVER did?

So much about ”being in the wrong (or right) place at the wrong (or right time)”

7

Moz in Oz 09.30.20 at 7:54 am

the idea that the United States was a land of opportunity where everyone who worked hard had a fair chance of doing well. This was true a century ago

When did they stop slavery again? My knowledge of US history isn’t great but I vaguely recall that their equal rights amendment is a recent thing that’s still being litigated (voting, forced labour, forced pregnancy and hysterectomy). They still have a “buyer beware” approach to consumer protection, corporate fraud etc. Which means at best you could say “land of opportunity for rich white men”.

8

nastywoman 09.30.20 at 7:59 am

But this seems to make the contrast between Germany and the vigorous Anglophone economies a simple left-right matter: free markets vs. the heavy hand of the government. And while there is something to this, anyone who has spent time talking to German economists and officials knows that in some ways they are more conservative–that is, more opposed to activist government–than Americans. Perhaps they don’t believe in letting grocers stay open whatever hours they want to, but they do believe in sound money and sound budgets and abhor the idea that the government should lower interest rates or–horrors–devalue the currency to fight unemployment.

Well, here’s my theory: The real divide between currently successful economies, like the U.S., and currently troubled ones, like Germany, is not political but philosophical; it’s not Karl Marx vs. Adam Smith, it’s Immanuel Kant’s categorical imperative vs. William James’ pragmatism. What the Germans really want is a clear set of principles: rules that specify the nature of truth, the basis of morality, when shops will be open, and what a Deutsche mark is worth. Americans, by contrast, are philosophically and personally sloppy: They go with whatever seems more or less to work. If people want to go shopping at 11 P.M., that’s okay; if a dollar is sometimes worth 80 yen, sometimes 150, that’s also okay.

Now, the American way doesn’t always work better. Even today, Detroit can’t or won’t make luxury cars to German standards; Amtrak can’t or won’t provide the precision scheduling that Germans take for granted. America remains remarkably bad at exporting; the sheer quality of some German products, the virtuosity of German engineering, have allowed the country to remain a powerful exporter despite having the world’s highest labor costs. And Germany did a better job of resisting the inflationary pressures of the ’70s and ’80s than we did.

AND as CT – somehow seems to have something to do with a German Dude called ”Kant”- somehow this post reminds me on a old post from Paul Krugman where he wrote:

”Well, here’s my theory: The real divide between currently successful economies, like the U.S., and currently troubled ones, like Germany, is not political but philosophical; it’s not Karl Marx vs. Adam Smith, it’s Immanuel Kant’s categorical imperative vs. William James’ pragmatism. What the Germans really want is a clear set of principles: rules that specify the nature of truth, the basis of morality, when shops will be open, and what a Deutsche mark is worth. Americans, by contrast, are philosophically and personally sloppy: They go with whatever seems more or less to work. If people want to go shopping at 11 P.M., that’s okay; if a dollar is sometimes worth 80 yen, sometimes 150, that’s also okay.

Now, the American way doesn’t always work better. Even today, Detroit can’t or won’t make luxury cars to German standards; Amtrak can’t or won’t provide the precision scheduling that Germans take for granted. America remains remarkably bad at exporting; the sheer quality of some German products, the virtuosity of German engineering, have allowed the country to remain a powerful exporter despite having the world’s highest labor costs. And Germany did a better job of resisting the inflationary pressures of the ’70s and ’80s than we did.

”But the world has changed in a way that seems to favor flexibility over discipline. With technology and markets in flux, not everything worth doing is worth doing well…”
AND MY question:
Does everything ”worth doing is worth doing well…” have anything to do with… LUCK?

OR
What Kant said?!

9

Matt 09.30.20 at 8:13 am

I’m glad to get to read bits, and am sure others are, too, so it’s a pleasure to make any small contribution.

10

Gavin Miller 09.30.20 at 8:16 am

Hi JQ
I wonder how the Covid-19 pandemic and inequality will ultimately play out intergenerationally?

What might the uneven impact on the poorest and potentially, through the influence of epigenetics, be the impact on future grandchildren of grandmothers unlucky enough to have suffered most during this pandemic?

Best of luck with the book.

Where do you get the time?

cheers

gavin

11

faustusnotes 09.30.20 at 8:39 am

It’s important to avoid conflating luck with the efforts of all of society. You don’t get measles because you were unlucky, but because some other people didn’t vaccinate their children. You get covid-19 not just because you’re unlucky, but because other people are not collaborating in a major society-wide effort. This is particularly true if you are an “essential worker” (i.e. lowly-paid with no rights). You have to struggle in to your essential job every day, and your infection risk is dependent entirely on whether non-essential workers contributed properly to society. In particular journalists, policy-makers, scientists, politicians, public servants and supply chain managers are far more important to your fate than luck.

For a simple example of this consider the two week or so period that Johnson and the other non-essential workers in his govt were faffing around about what to do. Johnson was running around shaking hands with anyone he could spit on, the government was refusing to close major public events, and the scientific advisors had built a model of the impact of the virus on the health system which assumed it was normal pneumonia, which they only updated once Italians started dying in droves. Meanwhile over here in Asia the Chinese were screaming from the rooftops about the unfolding disaster, and we were all listening. That lethal combination of incompetence, unseriousness, laziness and racism is the reason that essential workers in Britain were hammered by this disease, not luck.

There has been a consistent story throughout the western response to this disease that personal choices matter. This is part of the story behind “luck” – that you could be “unlucky” to have failed to have “avoided” this thing. It’s not luck – this is an infectious disease and you get an infectious disease because of policy and health system failings, not because of your personal actions or because of other people’s individual behaviors. Now governments across Europe are mandating masks but the cases sky-rocket anyway, because even now they think your personal behavior is the reason you got it – the deserving and the undeserving afflicted. See how Johnson is trying to pretend he can keep pubs open and saying people aren’t behaving “responsibly”. Personal behavior and luck are rhetorical devices used by non-essential workers to let themselves off the hook for the decisions they made that are killing others.

12

John Quiggin 09.30.20 at 10:35 am

@Moz “land of opportunity for rich white men”. Not quite right. Relative to Europe at the time, it was a land of opportunity for white men whatever their starting point to become rich(er). And even for white women, there were a lot more chances. For example, the US Married Women’s Property Acts preceded the UK by about 50 years,

But I will certainly correct it to say “white”.

13

Matt 09.30.20 at 12:01 pm

They still have a “buyer beware” approach to consumer protection,

This isn’t actually so. You can debate whether consumer protections are good enough in the US or not, but this isn’t the rule and hasn’t been for a long time. It’s useful to actually know things before talking sometimes.

14

Tom 09.30.20 at 1:26 pm

“From the moment we are born, luck plays a critical role in our life chances.”

Just a note: there is evidence that inequalities start even earlier than birth. Janet Currie had a nice paper on this:

Currie, Janet. 2011. “Inequality at Birth: Some Causes and Consequences.” American Economic Review, 101(3):1-22.

15

bianca steele 09.30.20 at 2:03 pm

faustusnotes illustrates a disconnect presumably, between public health and medicine. The identification of personal risk factors so they can be minimized is, as anyone who’s seen a doctor throughout their life knows, a main component of medical care. At least for conditions seen as sufficiently rare to be individualized — for pandemics, and such, responsibility for protecting oneself (and others) from the public danger would substitute.

I’ve already read one story where a “COVID-19 long-hauler” reports being told by his doctor that he’s young and had better conquer his illness and start acting like a young man again, rather than keep coming in and complaining that he still feels bad.

16

Murray Reiss 09.30.20 at 4:35 pm

Given that, as you acknowledge, this was written in a world in which it is at least possible that Donald Trump will be re-elected, it makes me wonder how much we really know of such a world. Seems to me the great task for sociologists, political scientists, et al going forward is to explain just how it is that tens of millions of Americans will still vote for him.

17

Orange Watch 09.30.20 at 6:00 pm

This observation is probably in large part fueled by having just read/commented on the anti-abortion post, but I think it might be useful to consider metaethics when looking at the psychology behind “luck vs. merit” debates. Specifically, I think virtue ethics is far more prevalent in the Anglophonic west than we tend to give it credit for; it’s not all deonologists and consequentialists. If we assume the world (and our socioeconomic systems) are founded on just principles, good people will be rewarded and bad people will suffer; if goodness is a quality rather than a behavior, there can’t be (unlucky) runners-up waiting to replace (lucky) winners, because if they could replace them they’d already be winners. There’s no luck involved; the outcome just proves whether or not you were a good person to begin with. Hard work by a maker will inevitably lead to wild success; hard work by a taker will be wasted in fruitless, dead-end pursuits. If it doesn’t, it’s not because of luck; the virtuous hard worker failed because the takers conspired to steal the fruits of their labor and pervert the naturally-just system.

18

r 09.30.20 at 6:19 pm

The last paragraph strikes me as involving a non-sequitor. That the difference in economic status between two people arose as a consequence of pure luck does not imply that, once they have actually assumed those statuses, the unlucky remains available to be substituted into the lucky one’s place without issue.

For a pandemic example: suppose that two young people are both on the track to success, and equally hardworking, intelligent, well-trained, etc. Then, as a pure matter of bad luck, one of them gets COVID and it causes a stroke. So while the lucky one goes on to his job as a master of the universe, the unlucky one never rejoins the workforce (common in stroke victims, even young ones). Although the difference in outcome is a matter of luck rather than being attributable to effort or skill, that clearly does not imply that the unlucky stroke victim is effectively waiting in the wings as an possible replacement for the lucky master of the universe.

19

Omega Centauri 09.30.20 at 8:58 pm

faustus at 11
Started well. An individuals exposure to COVID risk is strongly mediated to what other groups of people are doing. Its also strongly mediated by what the group of people you frequently mediated do. Thirdly its mediated by your own actions, and diligence. Your personal odds are the product of these three things. If you don’t do best practices at whatever you are required to do, your risk goes up. Many wear masks, but don’t use them correctly. How many do you see cheating at mask wearing by sticking their nose out? How many are wearing less than N95 masks, because the standard of compliance seems to be “is attempting to comply” rather than is diligent about best practices.

And its noticed that per capita case levels between countries can differ by orders of magnitude, and at first glance this country risk seems uncorrelated to national per capita income. A partial list of some of the countries with well below average case rates: China, Japan, Nigeria, Kenya, S Korea, Madagasgar, Cuba, Hong Cong, Thailand, New Zealand, Taiwan, Vietnam. So at least at the level of whole countries, it has little to do with income levels.

20

John Quiggin 09.30.20 at 9:21 pm

r@17 Thanks for raising this point, which I was concerned about I attempted to address it with “runners-up” . These are people with similar abilities to those who make it to the top, but with slightly worse luck. In a world with high rates of taxation, and lower effort from the winners, these would be the workers who would partially replace them.

21

Moz in Oz 09.30.20 at 9:54 pm

I realise that in a world where a 40% marginal rate is considered ample justification for widespread tax evasion, it seems vaguely plausible that a 70% marginal rate is sufficient to stop everyone from working… but, really? I’m not sure there’s a number you could slot in there that won’t cause half your readers to boggle. Randians will go wild at anything over 1%, historians will note that 98% didn’t stop the ultrawealthy staying that way in the past.

Complete side issue, but perhaps reword to avoid the number or add a cite?

22

Moz in Oz 09.30.20 at 10:09 pm

Faustnotes remarks also apply to Anglonesia – those lucky enough to be on the right side of the Tasman are a lot safer than those experiencing the half-hearted attempt to emulate the UK on the other. Aotearoa has the “team of five million”, Australia probably has more than that who are explicitly “Team Virus” (or “Team Herd Immunity”, except that many of them don’t care whether herd immunity actually happens).

I think you should be really clear about the distinction between “economic luck” and “health luck”, even though they are deeply intertwined. I read r’s point as being that you can generally recover from bad economic luck, and at the top end you can swap the recipients without changing the bigger picture. With health not so much. We need studies to see the difference a few years of poverty makes, but a few years of death or major disability is obvious to anyone.

23

Life is a Drama 09.30.20 at 11:10 pm

It is evident that you are a careful thinker in the many matters before us but there is missing here a far more important element: Personal Responsibility.
It is not luck if you catch Covid-19 from your friends in a bar. There was a known risk … and you chose to take the risk. It follows that the person primarily responsible for the unfortunate outcome is not someone else … but you. You made a decision somewhere along the way and you now endure the consequence.
It’s far too easy to blame others for the outcomes that direct our lives.
As a people, we take it further … our behaviors show that we believe that we have “the right” to ignore wisdom in exchange for personal freedom (there are many better words for this.) The end is that we are the recipient of both chance and the outcomes of our decisions.
Furthermore, we are badly influenced by propaganda from all sides that drag us around with a ring in our nose according to the most fashionable “cause” of the day.
I had a friend some years ago who was then in political exile from Czechoslovakia who said to me, “The geatest thing my father taught me was how to form an opinion. You Americans! You can’t make a decision about anything until you’ve see it on TV three times.”
Was she right?
I invite you to consider writing another book for all of us titled “How to Form an Opinion”. We are in need.

24

John Quiggin 10.01.20 at 1:05 am

@OrangeWatch This will be the main topic of the next instalment.

25

faustusnotes 10.01.20 at 1:44 am

When you’re talking about luck as applying to membership of populations of 5 million (or 1.4 billion even – China has done very well to contain the virus) then it’s meaningless to talk about luck at all – as well talk about the luck of being born at all (or not being born as a food animal). What really determines our outcomes is policy, not luck. If you’re born poor you’re not “unlucky” – you’re a victim of a system that worked to make sure a large number of people would be and remain poor, at the service of their betters.

This is very nicely shown by the British experience. Almost everything about the pandemic would be better if Jeremy Corbyn were in charge, but British voters decided not to “risk” his “radical” ideas last year, and now they’re feeling the pinch. Remember when he proposed free broadband for all and the Very Serious People laughed at the govt subsidizing such “luxuries”? All the Very Serious People are working from home now, because they can afford those “luxuries”. If you’re poor in Britain chances are you voted Corbyn, and now the people around you are dying like flies of a disease that you wouldn’t be facing at all if your betters hadn’t decided that the kind of policies that prevent pandemics are not right for the UK. That’s not luck: it’s a suicidal system.

Similarly you can’t “mediate” your personal risks for this virus as suggested by Omega Centauri if you have to commute to work because your bosses won’t let you work from home and there are weeks of accreted filth in your trains (which also aren’t ventilated) because your boss’s class decided not to “waste” money on public services. Wearing a mask doesn’t protect you from your boss’s greed. What Omega Centauri is saying is like if you were conscripted to WW1 and some well-meaning so-and-so tells you well you can mediate your risk by keeping your head below the trenches. Sure, and when my psychotic commander tells me to go over the top, what then? Oh yeah, don’t forget your helmet.

Public trust, public services, cohesive society and organized government working for the good of all are a million times more important than luck. But in the face of a suicidal drive to wipe our civilization away, some people are still talking about how our personal behavioral choices can save us. They can’t, and luck has nothing to do with it.

26

Alan White 10.01.20 at 4:15 am

My late-intellectual-life was transformed by the philosopher Neil Levy’s book Hard Luck–a very deep dive into all matters of luck and personal responsibility as relates to the so-called free will problem. It transformed me from a kind of standard compatibilist into a full-fledged pragmatist about moral responsibility. It seems to me that this post and some comments can translate into larger contexts of dialogue about luck and the human condition–there is luck and even meta-luck that infuses distinct realms of discourse. I’d say that C19 is a form of meta-luck that completely transforms conversations about luck in more “typical” discussions about socio-economic matters–which is another way (I’d say) that the OP makes its point. Luck has not just one level of influence on life–and maybe now we need to talk about luck, meta-luck, and even higher forms of luck as informing our understanding. Maybe this is just redundant to John’s point–but it seems to me that the meta-luck involved in genetic mutation just made it to the front page of The Wall Street Journal in terms of the luck of markets.

27

Tapen 10.01.20 at 8:19 am

The winner takes all culture accentuates the inequality.
I once met a man who had exactly the same result as
Carl Lewis at 100m running when it was measured
to the first decimal place. He lost out to Lewis,
lost the college scholarship that went to Lewis.
This is not to take anything away from Lewis
but when I met this guy, he was working as
a janitor in the Business School Building at
the Georgia State University in Atlanta.

28

Kyle John Staude 10.01.20 at 1:37 pm

In general I think the idea of a pandemic book linked to more general concerns is a great idea. I also found it to be an easy read. A couple of thoughts.

Bankruptcy stats might be a good inclusion in the social mobility stats. These are really shocking as a huge proportion of American families go bankrupt. It really indicates how the US economy is cruel system that screws everybody.

Oddly enough the financial crisis did not benefit the credibility of left ideas whereas it seems the pandemic may be different. Progressives seem to have responded to losing control of the debate about the GFC with more long term effort to affect ideological change. At least I feel that is what has happened.

29

Richard W. Rohde 10.01.20 at 6:19 pm

Though I finished the article, you kind of lost me when you used only the data point of 4% jumping from the bottom 20% to the top 20% (and vice-versa). That’s data-picking at it’s worst. That 57% (out of an ideal 80?) move up to a higher class [Pew, 2012] the inequality figures don’t look nearly as bad. I’m curious what nations score ‘better’ on all this.

30

oldster 10.01.20 at 11:56 pm

Hyper-trivial typo:
“But mostly they are a matter of being in the wrong (or right) place at the wrong (or right time).”

Move the final close-parenthesis to the left of the word “time”, to give:

“…the wrong (or right) place at the wrong (or right) time.

31

mpowell 10.03.20 at 2:23 pm

I find this idea of luck to be rather under developed. One concept of luck is that you bought a lottery ticket and won. Another concept of luck is that you were born into a wealthy family with strong ethics of personal responsibility, delayed gratification and hard work, you absorbed those ethics and by practicing them joined your parents in the upper 20% of earners. Is this person lucky? Absolutely. At the same time, it is obvious that the first example does not involve any type of behavior that needs to be incentivized and the second does. But maybe the third example more typically relies on genetic inheritance or the provision of opportunities from family wealth that only lead to better outcomes but not greater social contributions. It would be very helpful in identifying policy remedies which are the dominant mechanisms and it cannot be derived by simply looking at inter-generational quintile movement.

At the same time, whether high earners are ‘lucky’ to be where they are has very little bearing on the question of whether we should be worried about taxes disincentivizing their work. The vast majority of these people work very hard over extended periods of time to achieve their incomes. They are much less likely to do it at high marginal rates and will either choose different pursuits or structure their earnings differently (capital gains, for instance). And you can obviously structure policy to encourage different behavior depending on your opinion on these issue. You do have to ask whether their social contribution actually corresponds to their monetary reward to a sufficient degree that encouraging the pursuit of wealth makes sense. And I know your other posts address this topic. But the question of the degree to which luck plays a role, with the vagueness and broadness with which you define it, is almost completely irrelevant to the discussion.

32

J-D 10.04.20 at 12:23 am

… Another concept of luck is that you were born into a wealthy family with strong ethics of personal responsibility, delayed gratification and hard work, you absorbed those ethics and by practicing them joined your parents in the upper 20% of earners. …

I joined my parents and grandparents in the upper 20% by inheriting assets from them. Whether I absorbed strong ethics from them is more difficult for me to judge. For people to get rich by inheriting wealth from their parents is such an obvious mechanism that it requires strong evidence to show that people benefiting financially from absorbing the ethics of their parents is a more important mechanism, or an equally important mechanism, or an important mechanism at all. (My grandparents did not inherit assets from their parents. If their personal ethics contributed to their becoming rich, and if they absorbed those ethics from their parents, then obviously those personal ethics were inadequate to make my great-grandparents rich. On the other hand, if their personal ethics contributed to their becoming rich, and if they developed those ethics without absorbing them from their parents, what does that suggest about the importance of absorbing valuable personal ethics from your parents?)

The vast majority of these people [high earners] work very hard over extended periods of time to achieve their incomes.

On the face of it, that assertion strikes me as implausible. No good reason to accept it occurs to me, and I don’t think anybody should accept it without strong evidence, which you have not so far produced.

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