Luck vs. Effort?

What you think ought to be done about inequality likely hinges on your view about whether financial success is determined more by luck or by effort. Progressives generally believe luck matters more, while conservatives say effort does.

This way of framing the question is wrongheaded. It suggests that the traits and behaviors conservatives emphasize — hard work, will, initiative, drive, focus, persistence, discipline — are largely independent of luck. And that encourages progressives to deny or minimize their importance in influencing success.

Thus Matthew Yglesias:

To get rich in the United States you pretty much have to work hard. But the idea that success is due to hard work ignores the fact that there are all these other people working hard and not succeeding. Hard work is much more common than success. And advantages of birth and dumb luck are making the difference — separating the hard-working partner at the corporate law firm from the hard-working guy who moved the furniture into the law firm’s office.

And Ezra Klein:

Since we justify income inequality by understanding success as an outcome of virtue, there’s a tendency to ascribe achievement to diligent effort rather than the market’s amoral decisions to attach high value to certain spheres of labor and low value to others. The important variable for success, however, does not seem to be hard work but profession. If you’re in a high-value profession, hard work can do you a lot of good. If you’re not, it may not do you much good at all.

Drive, diligence, and other virtuous qualities are themselves heavily influenced by luck. They are to a considerable extent a product of factors over which we have no control: our genes, what happens in utero, birth order, our parents’ traits, childhood nutrition and health, early social experiences with peers, stumbling into an occupation that suits our interests and abilities.

Conservatives tend to say the success and rewards that go to Michael Jordan, Warren Buffett, Bill Gates, and others like them are a result not only of their skills and of being in the right place at the right time, but also, perhaps mainly, of their effort. Even if true, this doesn’t diminish the role of luck. For their effort is itself largely attributable to good fortune.

21 thoughts on “Luck vs. Effort?

  1. Interesting post Lane. I found myself, though, trying to figure out how exactly it defines/imagines “luck.” The term has very different meanings, colloquially versus social-scientifically. The former has more of a connotation of “good fortune” or even “blessedness” (the extreme being “predestined”). The latter, a connotation of hidden correlations, themselves at root social and historical in nature.

    ps, foxy new pic.

  2. This discussion makes no mention of the role of national culture and infrastructure which have been bestowed upon all of us by the hard work and sacrifice of our ancestors. If this is taken into account it’s probably fair to say that a tax rate of 50% on profits above the expense of staying healthy and holding a job would be more than fair. How would Warren Buffet or Robert Rubin have fared if they were born and lived in Bangladesh?

  3. Of course there’s the classical objection that if you abstract all genetic and environmental factors as “luck” and then presume there’s some kind of mystical merit-producing quality in an individual uncaused by any of these factors and known as “hard work,” you have a pretty peculiar metaphysic. From another angle, that’s like saying that 4 is lucky to be evenly divisible by 2 just because it happens to be 4.

  4. You’re phrasing this as a moral question — i.e. if success is the consequence of luck then it is undeserved, and therefore it is moral to confiscate some portion of it to redistribute to others; if wealth is the consequence of virtue, then it is immoral to do so.

    However, if success is the consequence of virtue, then reducing the desirability of success, however defined, will reduce the incentive to exercise these virtues to its attainment. So even though you are correct that success is ultimately a matter of chance, there is a valid distinction to be made between the “luck” and the “virtue” case.

  5. Our school superintendent once told me the best correlation of academic achievement was the educational level of the mother. Doesn’t sound like luck or effort to me. It sounds like the best indicator of success is probably how one is encouraged and the examples that are set as you grow up.

  6. This whole product of your environment and/or genes thing I think is counterproductive to bring up. It can become an excuse not to improve, which is in everyone’s power, even those with very unfortunate genes and upbringings.

    Yes, self discipline is partly genetic and partly due to environment, but the fact is, for whatever reason, those who worked hard, or did things that weren’t their first choice, made a sacrifice, so it’s reasonable to think they should get greater rewards.

    With regard to Yglesias’ comment, “separating the hard-working partner at the corporate law firm from the hard-working guy who moved the furniture into the law firm’s office.”. That guy who’s moving the furniture didn’t make an effort in the classroom, where it really counted, and the guy in the lawfirm did. There we’re likely many many days in highschool when that law partner would have preferred to be outside playing baseball instead of in the library studying, but he studied, while the furniture mover played baseball.

    True, the furniture mover probably went to much worse schools, but if he had made the same effort as the law partner, he would still have earned a degree, and would have been making much more money.

    It’s very important that we not decrease peoples incentive to work on their educations, where work counts the most. I’m all for greatly increasing education spending and college aid and support, but people have to make an effort in the classroom, not just the shoproom.

  7. Of course, it is good to bring up unfortunate backgrounds and genes in deciding on aid. Those who are unfortunate certainly deserve generous help, but you have to be very careful to not let it be an excuse for not making an effort.

  8. Lane,

    As you know I am not a very academic person…but an old mentor of mine instilled two brief thoughts on this subject.

    (1) “I would rather be lucky than good”

    (2) “The harder I work the luckier I get”

    I miss you buddy………….chip

  9. You missed the most important element of luck – time and place. You could been born in Russia in the dark ages!

  10. I’m just not sure that everybody is suited to go through lots of formal education. Do we throw those non-academics on the scrapheap (and will they just passively lie there)? I think we need a society that has enough different roles to suit everybody as we came very close to acchieving in the sixties (but women might have another point of view).

  11. You missed the most important element of luck – time and place. You could been born in Russia in the dark ages!

    Another bizarre circumlocution. Who is this “you” who could have been born in Dark Age Russia? A certain combination of genes? A disembodied soul plucked out of the Bardo and planted in a body? A zero-differentiated game theory player? Whatever passes for a thought experiment in the more thoughtless science fiction?


  12. great comments. I have been working on a paper about the history of litigation surrounding casino games, and this issue of ‘luck v effort’ surfaces repeatedly. in many states, if a game is determined primarily by “luck,” it is illegal (the rationale dating back to the puritans and the idea that relying on chance leads to sloth). But if it entails ‘effort’, then it is more akin to ‘work’ and is thus legal (like researching sports statistics before placing a bet on a basketball game). i think a similar logic is at work in these much larger debates about individual success and who is worthy of material security.

  13. At some point the financial rewards for skills and creativity and entrepreneurialship crowdout the ability of future/smaller players from making an optimal contribution.
    For the above, Gates got lucky IBM didn’t care about the software system for personal computers. Buffett had a stockbroker father and got to start with two orders of magnitude capital more than he would’ve by not using his last name. I’m happy they got rich because I like the Gates Foundation, but they aren’t representative of how rich people spend their money. I can imagine them both at a $500M networth on effort being born into the USA socioeconomic median and with their minds and childhoods. But big difference between $500M and $50B and the diff is luck.
    If University student enter finance instead of being engineers or biomedical researchers because of money….if small businesses get crushed by bigger players because the latter have better lawyers, obviously corporatism is insidious.
    Financial success is a vague term. Is $10000/yr in savings a success, is there any difference between $500M and $50B? If everyone who was lucky enough to get from $500M to $50B saw most of that wealth stolen and exported to those that face obstacles of poverty and info dichotomy, the average life expectancy of us all would be over 100 soon and we’d all have an army of robotic whores.

  14. Hi Lane:

    Thanks for this. I’ve been banging my spoon on the highchair for some years trying to make the point that remarkably successful people (like me) owe much or most of their success to luck. I wrote it up here:

    I was born smart (50% heritable), reasonably well-to-do, in the U.S. in the last half of the twentieth century, and–as just one more example of dozens or hundreds–lacking the “I love alcohol” gene.

    I often think back to a phrase from Abe Lincoln’s speech to a temperance society in the 1840s (which phrase was not received with unalloyed enthusiasm by that quite Puritan crowd):

    “In my judgment such of us who have never fallen victims [to alcoholism] have been spared more by the absence of appetite than from any mental or moral superiority over those who have.”

    IOW, the lucky-sperm competition.

    The moral implications are important not so much to claim benefits for the lazy, but to counter the moral underpinnings of mutually destructive supply-side, trickle-down rhetoric: “I earned it, so I deserve to keep it. And by the way you’ll all be better off if I do.”

    “Luck” counters both of these statements. I worked hard to achieve my success, but so what? Many people work much harder and don’t achieve that success. So even if my hard work was “my own doing” (questionable), it doesn’t give me an inalienable right to whatever comes my way.

    More important, though, is undercutting the second statement. In an increasingly high-productivity economy that delivers our essential needs with ever-decreasing labor input, labor is inevitably devalued. So laborers–especially unskilled laborers–have less “claim” to output. (Let’s not forget that *by definition,* 50% of people are unlucky enough to have been born with an IQ below 100; how much claim do they have?)

    If productivity increases a thousandfold, so one producer replaces 1,000, the choice of that one person looks increasingly like pure luck. Yes, the other 999 can produce other things, but we know that the human utility curve flattens out at $15 or $20K a year, so if one person produces all of those high-utility goods, the other 999 are trying to stake a claim on goods by producing what are, ever-increasingly, relatively low-utility goods. Damn hard to make a claim based on that.

    The problem is that–putting aside all moral claims–we need those people to have good incomes to maintain consumer (hence, indirectly, aggregage) demand. Otherwise the hot producers don’t have anyone to sell to. The log stops rolling and you have one guy standing on a stationary log, with the rest drowning around him.

    Obviously we need to maintain incentive for high achievement or the log will also stop rolling, or get bloody sluggish. But guaranteeing a nice standard of living for everyone–even those with an IQ of 80–will actually allow that incentive to be greater, because there’s a strong, stable, steadily rolling economy like the one I was lucky enough to be born into.

    We need to increase taxes and redistribution so lucky people can succeed.

  15. The stats show that most people stay in their social/economic classes throughout their lifetime, being in the same group as their parents.

    Social capital is luck

  16. Malcolm Gladwell’s new book Outliers is about this. Great read, definitely worth checking out.

  17. Interesting thesis, I wonder if any room is left in it for free will?

    Also, might we perhaps run into self-fulfilling prophecies? If the lawyer was “lucky” enough as a child to have parents that instilled in him a great respect for education, and the furniture mover was “unlucky” enough to have parents that believed all success was due to luck, then perhaps the lawyer would have believed in the power of his agency, thus creating his good fortune, and the furniture mover would have doubted the power of his, thus abstaining from creating a similar fortune.

    Surely if I ever have kids, I will aim to instill the concept that we live the lives that we create for ourselves. What a poverty it would be to rely upon the whims and agency of others’ charity, either voluntary (private) or involuntary (government).

    Sure, we start with a genetic deck of cards and environmental one, but the value of agency is part of the elemental equation. A memory that has always stood out in my mind: my room mate and I were once in the same college class. I recall that on one evening, we were to leave home for class together. The setting: it was raining, and the Simpsons was just starting. I chose rain and class. He chose the Simpsons. The product of hundreds of similar choices was that I graduated in 7 semesters, whereas he is actually finishing up his final semester presently, 10 years after he started. He’s not been poor in the interim, but that’s solely due to the assistance of his wealthy parents – I don’t believe that he’s held a job more than a month or two in the past decade.

    What, if anything, made me choose rain and class over the Simpsons, and what made him choose otherwise? I believed then (as I do now) that I could punch my meal ticket if I put in the effort. For what it’s worth, my parents were of much more modest means than his.

    Whatever it is that encouraged me to choose rain and class is the thing that society must produce. Compassion dictates that we ought to grant my room mate a satisfactory existence should his willpower continue to fail him and his parents discontinue supporting him, but surely we have to acknowledge the moral hazard in doing so.

  18. Many, many wonderful points of view. Here is what I’ve learned from life. Hard work is not the key to success. The news is filled with successful people who never worked a day in there lives, and they live and are treated like royalty. I’ve know many people who kill themselves everyday to keep a roof over their families heads. Smart people who ponder the wisdom of the universe as they rake a lawn or drive a truck. I’ve worked for a man who came to this country without any education and no knowledge of English. I was one of the hardest working men I ever knew. He built a small empire and is very wealthy. He owes his success to a number of fortunate opportunities. Not doubt his hard work and relentless dedication made those opportunities pay off and work out. But, he was in the right place at the right time and lucky enough to fall into a golden chance. And the chances worked out.
    Here’s what I’ve learned, prepare all you can, work as hard as you can. Because for everything you try, there is a moment of truth, the roll of the dice. The flip of the coin. Because you have to take a risk in order to succeed. And that risk is the part of the effort you can’t prepare for or work hard enough for. It’s a delivery you were counting on and the truck went off the road in the snow.
    My father spent several summer visiting a camp ground. Very busy, very nice, the place made good money. One year he had the luck to buy the place. He scraped together the money and put everything he had into it. Three summers in a row it rained nearly every weekend. Tell me how much more hard work would have helped? My father’s whole life was that way. He didn’t always make the best choices, but then he never caught a break either.
    Bad luck is real, good luck is real. Hard work is only worth it if you’re lucky. There is no way to test or confirm this opinion of mine. A life time of bad luck has a way of pounding you down. It does not make you stronger or temper your mettle. It breaks you apart, grins, and crushes. But get up every morning, and keep trying, even though every chance that comes your way will fail to pan out, every hope will be smashed, suffer everyday the death of a thousand cuts. Then you will realize success is not a measure of wealth or education. Success ultimately has nothing to do with luck verses hard work. It has to do with continuing to try when you know you’ve never succeeded or just laying down and dying. Just like The Impossible Dream.

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