Thursday, November 12, 2009

Luck Begets Luck

If you have ever reflected on the role of chance in life, I recommend this provocative post by James Kwak over at Baseline Scenario.  I do think a longer discussion of variance around the mean - including the role of  effort - is warranted (to be fair to Kwak, he agrees that incentives matter). This excerpt should whet your appetite:

But there are still two implications of realizing that everything — even your initial endowments — is a matter of chance, not something you deserve.
The first is that you shouldn’t look down on other people (1) because their parents weren’t as rich as yours, or (2) because they aren’t as smart as you, or even (3) because they don’t work as hard as you. I think most people agree with (1); I think you should agree with (2) and (3), too.
...I have little patience for the idea that rich people deserve what they have because they worked for it. It’s just a question of how far back you are willing to acknowledge that chance enters the equation.