Once upon a time I considered myself a conservative
republican. Political views are like religious views in that you are more or
less born into them. Geography and
environment determine both. Ideas are
imprinted onto our minds before we’ve had a chance to develop strong critical
thinking skills. We hear things over and over again and believe them. We want to belong to our tribe, etc. It’s only natural. I was raised in East Texas
and my political views up until my mid-twenties reflected that.
My political change of heart happened for a combination of
reasons but I think the biggest factor was just spending enough time out in the
real world making a living and paying bills.
To be perfectly honest I just didn’t pay a lot of attention to this
stuff until my late twenties. Around that time I started getting a better
understanding of how the world actually works and started looking deeper into
politics and power and I shifted from right to left on the political
spectrum. There were beliefs I held that
just didn’t square with the reality I saw day to day and eventually I had to
admit it to myself and adjust accordingly.
There were a number of issues that I realized were just
plain wrong and maybe addressing each one individually is an idea for future
blog entries but the main one could be summarized like this:
“If you are rich,
poor, or somewhere in between, it’s your own fault.”
That’s really the big myth.
The rich deserve to be rich and the poor deserve to be poor because “the
market” and their own personal talent and hard work (or lack of) is what got
them there.
Lest this post be misconstrued as a product of
disappointment or jealousy resulting from personal failure, allow me to dispel
that now. I have exceeded my own
expectations of success – and my expectations were high. It was not a lack of personal achievement that
caused my change of heart. It’s been the opposite. My personal journey through the stages of
achieving reasonable economic success has been a large part of why I started
questioning the truth of the statement above.
To be sure, there is some truth to the claim that one’s
fortunes or lack of are their own doing.
I’d estimate that the claim is about 50% valid. When looking at the sum total of factors
involved with determining an individual’s socio-economic status, I would argue
that personal talent and determination account for maybe half of the
total. The other half can be summarized
in a single word: luck.
If you are uncomfortable with the word luck we can also call
refer to it as circumstances that are out
of one’s control.
If you happen to be born into a stable, loving, financially
secure family, your odds of success are immediately much higher than someone
who was not. If your parents happen to
be bright people and intelligence is in your genetic makeup even better. If your parents happen to be not just
financially secure but wealthy, even better. If your parents happen to be not just
wealthy but also well connected and powerful in the community, even
better. And so on. Warren Buffett refers to this as the “Ovarian
Lottery” and the role it plays cannot be overstated. As the second wealthiest person on Earth he
acknowledges that being born in the right place at the right time with the
right kind of mind was a tremendous factor in his success. He realizes that not being born to a crack
head mother or alcoholic, gambling-addicted father was not the result of good
decision making skills on his part. Being raised in a comfortable suburban
neighborhood in Omaha, Nebraska as opposed to a housing project in Compton, CA
was not based on any tenacity or talent that he possessed. It was chance, pure
and simple. The idea that we all get an
equal start is ludicrous but it’s a comfortable delusion for people born with
every possible advantage.
And luck goes far beyond the accident of birth. There are countless examples of people who
have followed all of the rules, worked hard, done everything you are supposed
to do and still struggle to get by. The
fact is that there are innumerable factors outside of one’s personal control
that shape their economic outcome. The
big recent example would be the millions of people in the United States and all
over the world who have had their financial lives shattered because a handful
of greedy con-men from Wall Street wrecked the whole system.
Thinking about my own case, yes there are certain things
I’ve done right but there are also situations that just happened to work out
for me that could have easily gone the other way and made a big
difference. I’ve been fortunate in ways
that went beyond anything accomplished by own individual efforts. Nobody is truly self-made. Even with rags to riches type stories
someone, somewhere gave someone else a chance.
Other people helped that person succeed.
Then there are the various features of society that make
success possible: public education and universities, transportation
infrastructure, law enforcement, fire departments, the judicial and legal
system, patent protection, safe drinking water and food standards (and the
means of enforcement), a national defense, and the list could go on. Providing all of this to three hundred
million people is not free. As wealthy
venture capitalist Nick Hanauer put it, if zero government, taxes, and
regulation were truly the ideal environment for thriving businesses, places
like Somalia or the Congo would be the home to the world’s most successful
companies.
I do think there is a realistic and reasonable path to a
comfortable life for almost anyone who has the capacity to learn, work hard,
and overcome the peer pressure to waste money on unneeded junk. Our decisions do go a long way towards
shaping our future but it’s too simplistic to think that personal effort and
ability are the only determinants of economic outcomes. A lot of people at the
very top would like us all to swallow that (especially those like David and
Charles Koch, the Walton heirs, and others who inherited dynastic wealth from
daddy) but I think that’s just so they can absolve themselves of any
responsibility to contribute and give back to the society that made their
opulent lifestyles possible.
(Note: Economic mobility can be measured by how closely a
son’s earnings are correlated to his father’s earnings. By this measure France, Germany, Sweden,
Canada, Finland, Norway, and Denmark are all more upwardly mobile than the
United States.)
