Book Review: Success and Luck: Good Fortune and the Myth of Meritocracy by Robert H. Frank
Stuart Varney and many others insist that people who amass great fortunes are invariably talented, hardworking, and socially productive. That’s a bit of an overstatement—think of lip-synching boy bands, or derivatives traders who got spectacularly rich who got spectacularly rich before bringing the world economy to its knees. Yet it’s clear that most of the biggest winners in the marketplace are both extremely talented and hardworking. On this point, Varney is largely correct.
But what about the many talented and hardworking people who never achieve much material success? (7)
The point of Frank’s book is not that successful people are simply lucky, but that luck is often the deciding factor amongst a group of talented and hardworking people. To argue this hypothesis, Frank uses a mixture of psychological studies and anecdotal evidence from his own life, much of it dealing with athletics and music, clearly Frank’s two most hobbies, having wanted to be a professional baseball player and having professional gigs as a hotel pianist.
Frank says that their may be a “perversely adaptive” advantage to believing that talent and hard work are the only deciding factors, because more realistic beliefs might discourage effort, while unrealistic beliefs may make the necessary effort easier (7). When these false notions are applied on a grand scale, it gets worse. He likens it to the superwealthy driving Ferraris on potholes rather than driving less expensive Porsches on smooth asphalt, even though the latter is clearly the less expensive option.
This distortion occurs because what happens when any one person spends less on a car is very different from what happens when everyone spends less. In the former case, the buyer feels deprived. But when everyone spends less, the relevant frame of reference shifts, leaving drivers just as satisfied as before. (16)
This is why it is important to raise taxes on the rich, because they would all be curbing their luxuries relative to one another, and would not notice significant lifestyle differences of the sort that affect those at the low end of the pay scale. “If you alone experience an income decline, you are less able to buy what you want. But when everyone’s income declines simultaneously, relative purchasing power is unaffected. And it’s relative purchasing power that determines who gets the things that are in short supply” (92). Frank, an author of widely adopted economics textbooks and professor at Cornell University, totally rejects the libertarian view that taxation is theft. “A country without taxes couldn’t field an army, after all, and would soon be overrun by a country that had one. Its residents would then have to pay taxes to that country. A country without mandatory taxation is the political analog of a highly unstable isotope in chemistry” (97). I for one would love to see the 1% move to their own little island with no taxes and get overrun and have all their money taken away and redistributed. It would be a good lesson for them. Bruce Bartlett, senior economic advisor to Reagan and H.W. Bush says that the W. Bush tax cuts created an incredibly large budget shortfall, one that could eliminate the backlog of U.S. infrastructure, but people’s failure to appreciate that being born into the right environment is so lucky that they become reluctant to pay the taxes to support the investments necessary to maintain a good environment (90). His conclusion is that income tax should be replaced with a progressive consumption tax, an idea so modest that even a far-right think tank, Americans for Prosperity, has proposed it, as did Milton Friedman during World War II, who personally sent Frank a copy of his 1943 article on the subject calling for it as the best way to pay war expenses (126). This tax would encourage people to save their money, because it would be based on income minus savings minus a set number deemed adequate to a family’s expenses, say the first $30,000, would go untaxed. Frank cites Donald Boudreaux as claiming that such a tax would encourage envy, believing the reality to be that “many important rewards in life depend on relative position” (122). Frank cautions that the country would need to be at full employment to implement the tax (125), but never mentions that business interests lobby to prevent full employment as a strategy to keep themselves in power. He does believe, however, that announcing its gradual phase-in would accelerate consumption in the upper classes trying to avoid such a tax and stimulate the economy, but that accelerating infrastructure spending would work even better (162).
Hindsight bias is a major factor that makes successful people often think that they got far without luck, or created their own—the retelling of the narrative from a sense of the inevitable. Paul Lazarfield showed scientifically the insidiousness of hindsight bias. In a study, he told people that a study showed that rural soldiers adapted better to the privations of World War II than did their urban counterparts. The test subjects came up with all sorts of reasons why this was “obviously” true, then Lazarfield revealed that the study was a fabrication and that the actual study showed that soldiers of urban origins had adapted better. The point being that once you know what happened, it is easy to come up with explanations why (21).
Duncan Watts, who recommends the book on the back cover, notes the example of Da Vinci’s Mona Lisa achieving its fame over other paintings by Leonardo da Vinci of similar quality is lderived from it having been stolen by Vincenzo Peruggia, an Italian who tried to repatriate it to his own country by hiding it under his coat, which led to its global reproduction in newspapers after a long period of obscurity (22). I have never seen the painting in person, but I’ve been told that it’s very small. If it’s as small as Salvador Dalí’s The Persistence of Memory, it’s very easy to imagine why Peruggia stole it over other Da Vincis. After all, Da Vinci’s next most famous painting, The Last Supper, is a mural, and thus very implausible for theft. It’s not hard for me to imagine someone hiding The Persistence of Memory under their clothes and getting past security of 1911 quality with it. Further examples include the unlikeliness of success of Al Pacino and Bryan Cranston, both of which occurred because a creative director got his way in unlikely circumstances and with studio opposition (Frank erroneously says that The Godfather was Francis Ford Coppola’s first film to emphasize his point, but that ignores Finian’s Rainbow, The Rain People, and others.) Both are extremely talented, but Cranston was mid-career before he got a break, and had John Cusack or Matthew Broderick accepted the role of Walter White, Cranston would still be a relatively unknown working actor (24).
Citing findings by MusicLab (31), Frank says that while works of unambiguously high quality can sometimes succeed even in the face of early negative commentary, but that most successes come because the earliest reviewers happen to like them. “Many artistic endeavors owe their success, at least in part, to pure dumb luck” (31). I think Rocky is an excellent example of this. It got its share of negative reviews that I consider more astute, as I attempted to put on Wikipedia but got truncated, but many of the highest profile reviewers gave it at least mildly positive reviews, and it now has seven sequels. I have had cyberbullies insist that film industry professionals have read my scripts and found them wanting, but this is a completely false statement, since no one has gotten more than a query letter from me, to which they responded with form query letters. The fact that my work has never been given an opportunity means neither that it is of poor quality nor that I am lazy, but strangers continue to assume so based personal biases. He cites a similar issue in classical music, a market bigger than ever but with fewer performers than ever thanks to high definition recording technology. “Once the master recording of a tenor’s performance has been made, it’s essentially costless to make additional copies of it. That’s also why only a small handful of artists land seven-figure recording contracts, even as thousands of others—many of them nearly as talented—struggle to get by as elementary school music teachers” (47). Having performed in amateur and semiprofessional opera, I know how true this is. Nicholas Tamagna is easily the best countertenor I have ever heard, easily surpassing any I have heard on a commercial recording. Others who have heard him also say so, and he’s getting a steady stream of work in smaller opera companies across the country, but he appears to still be a long way from stardom, even if he appears to be closer to it than many of the rest of us. In both college and graduate school, studying film, I was assigned to read Walter Benjamin’s essay “The Work of Art in the Age of Mechanical Reproduction,” but Benjamin was writing about the intrinsic value of the unique art work, such as a painting, whereas few would want to watch a film negative in its entirely, nor would destroying a print result in the same level of punishment (or loss to the art world) as that of destroying a painting. The tone of the essay suggests Benjamin would find an argument about jobs banal, in spite of dealing with similar ideas.
Frank wants to believe the hypothesis of Chris Anderson’s The Long Tail, but the evidence appears to be going in the opposite direction. The proportion of titles selling fewer than 100 copies a year, was 91% in 2007 and 94% in 2011 during a period in which overall sales nearly doubled (48). Anderson believes that sales for such materials will increase when the hype for larger-selling titles dissipates, but the evidence does not show this. Frank wants to believe that the hypothesis is true, his sons having a band ironically called The Nepotist. Technology has made this even worse, as shown by Barry Schwartz in The Paradox of Choice, with most people disliking searching through a wide variety of options (hence the success of Blockbuster in the 1980s and 1990s, which I despised for its poor selection), and digging online takes a lot more patience than a browse through a store. Based on these studies, being a “Johnny-come-lately” in reviewing isn’t much help, even on a grander scale. I recall a published film guide that gave the maximum rating to Moron Movies and More Moron Movies, video collections that spoof how-to videos by having a guy use common household products in unusual ways, but it was not in consensus with other film guides, which gave them average reviews, and in terms of distribution, I rarely saw them on video store shelves let alone watched them for their contents. James Rolfe’s The Angry Video Game Nerd became a success reviewing old products, but except for a few specials, his reviews are all comedically negative. A fan of Rolfe created a fictional cousin called The Happy Video Game Nerd, who reviews underrated gems, but he doesn’t have anywhere near Rolfe’s hit count.
Conversely, the explosive growth in CEO pay was unheard of until recently, and has little to do with talent or ability—think of all the golden parachutes that have been given out to CEOs that have made their companies worse off than when they started. In decades past, a new CEO was groomed from within a company—someone who knew the specific business was desired, thus CEO pay was a negation between board and successor and not comparable to the pay of a CEO in a completely different field the way it has become, to the detriment of most (50).
I have a master’s degree and live in a homeless shelter. They tell us with those with college degrees make more than those without, but Frank shows this is a manipulation of misleading data:
Yes, the earnings differential between college graduates and others is now wider than it was thirty years ago. Yet if we look only at the distribution of earnings among college graduates, we see the same pattern for society. For most college graduates, wage increases have been either small or nonexistent in recent decades. The premium for college graduates exists because a relatively small number of the most successful graduates have enjoyed spectacular earnings growth during the same period. (53-54)
Chance events are more likely to be decisive in any competition as the number of contestants increases. That’s because winning a competition with a large number of contestants requires that almost everything go right. And that, in turn, means that even when luck counts for only a trivial part of overall performance, there’s rarely a winner who wasn’t also very lucky.
He illustrates this with the record holders of four track events (63-64), all of whom set their records with measurable tailwinds with the exception of Florence Griffith Joyner, while none set records with headwinds. Frank takes the analogy further with his friend, Tom Gilovich, with whom he was playing tennis when he would have died had it not been for an ambulance being closer than it normally would have been, tailwinds feel great, but they are easy to forget, while headwinds are arduous and require struggle. People are more inclined to remember their struggles than things that went easily for them, and hence, to discount the importance of luck (80-81).
If luck has only a very small effect on performance, why is it so hard to win a large contest unless you’re very lucky? Two factors are involved. One is that the inherent randomness of luck means that the most skilled contestant is no more likely to be lucky than anyone else. The second factor is that with a large number of contents, there are bound to be many with those close to the maximum skill level, and among those at least some will also happen to be very lucky. With very large contestant pools, then, there will almost always be someone who is almost as skillful as the most talented contestant, but is also significantly luckier. So even when luck counts for only a tiny fraction of total performance, the winner of a large contest will seldom be the most skillful contestant, but will usually be one of the luckiest.
[The expected performance level of the most skillful of 1,000 contestants in any contest is P=0.95 x 99.99 + 0.05 x 50 = 97.4, which is only 2.6 points below the maximum value. But with 999 other contestants, that score usually won’t be good enough to win. (155)]
The situations described in appendix 1 also help us understand both the strengths and weaknesses of the human capital approach discussed earlier. People who achieve material success on a grand scale will almost always be both highly talented and extremely hardworking, just as the human capital approach suggests. But the simulations also make clear, in a way the human capital approach does not, why so many extremely talented and hardworking people fail to achieve any significant measure of material success. Many of them are simply less lucky than the winners.
If the simulations challenge our intuitions about the importance of chance events, it’s at least in part because we sense, correctly, that performance depends far more strongly on ability and effort than on small random occurrences. Our intuitions often fail because even things that are highly improbable in any specific instance become likely if there are enough opportunities for them to occur. (66)
To me, this feels like a vindication. So many people who have never met me, plus my conservative family, believe that I am lazy or untalented. My mother had a tendency to yell, “Gifted and talented—ha!” because I was in the gifted and talented program in school, but my gifts and talents were not manifesting in the ways she would have liked—obedience, doing routine chores, and doing better in math (I was good in everything else except for physical education and industrial arts). I can show people job postings to which I have applied, with absolutely nothing posted on them that I do not have, but either never heard back or was turned down without an interview. This cannot correctly be described as lack of ability or effort on my part, but can be described as bad luck (although the will of others would be more accurate), particularly when CareerBuilder shows over 1,500 applicants for a single opening. It is likely that no human being actually saw my resume, which cannot reasonably be considered my fault. If the computer is rejecting people whose resumes do not mention an associate’s degree, it could be because I worked too hard and got into a baccalaureate program immediately on entering college and never earned an associate’s degree per se and thus don’t falsely put one on my resume. A human reading my resume would know that I exceed that requirement, while a computer would not unless it were programmed with all the right variables. As Bryan Cranston says, “without luck you will not have a successful career (68)”.
Our understanding of human cognition suggests additional reasons for the tendency to underestimate luck’s role in success. One of the rules of thumb people often use when making judgments is the so-called availability heuristic. Suppose you’re asked, “Which are more frequent: English words that start with the letter ‘R,’ or those that have ‘R’ as their third letter?” Using the availability heuristic, most people would react by trying to think of examples in each category. That approach usually works well, since examples of things that occur more frequently are generally easier to summon from memory. And since most people find it easier to think of examples of words starting with “R,” the availability heuristic leads them to the answer that such words occur more frequently. Yet English words with “R” in the third slot are actually far more numerous.
The availability heuristic fails here because frequency isn’t the only thing that governs ease of recall. We store words in our memories in multiple ways—by their meanings, by the sounds they make and the images they evoke, by their first letters, and by numerous other features. But virtually no one stores words in memory by the identity of their third letter.
The availability heuristic suggests that when we construct narratives about how the world works, we rely more heavily on information that happens to be more accessible from memory. But that almost guarantees that our accounts will be biased, since some types of information are far more readily accessible than others. Information about things we’ve experienced repeatedly for example, is far more salient than information about things we’ve only heard or read about infrequently. Information in the latter category has a much harder time breaking through. (79)
Thus, as with the tailwind example, intelligent, hardworking people who strike it rich have a tendency to dismiss luck. They also know that they probably would not have had that sort of success had they been born in Zimbabwe, but lack the day-to-day experience to remind them of that (80). “We tend to overestimate our own responsibility for whatever successes we’ve enjoyed in life” Frank says, but also says that that overestimation is a good motivating force (82). Bill Gates seems to have this awareness. He said that he would be stunned if there were 50 people in the world who had the same opportunities that he had (34). He was born to wealthy attorneys who worked for the government, and thus was well-connected through accident of birth, which also put him in a private school that was equipped to give programming students instant feedback on their errors. Frank himself describes having to drop punch cards of to a building on a hill and not get feedback in the next day. Compare this with my parents. My family was rather well to do in the 1970s. They didn’t want my brother and me in private schools, but they could afford to live in the neighborhood that had the best public schools in the state with my father’s job as a biochemist for Eli Lilly. My father lost that job in 1981, and I the younger child, thus had far fewer benefits than my brother. Frank discusses the importance of birth order at length, but it had a different effect in my family than in most. If my brother didn’t work out in something, such as Little League, they didn’t even try it for me. My mother having a large sense of shame played a huge role in this. She pulled my brother from Little League because he would miss the ball if a fire engine came by, because he was more interested in fire engines than baseball. Recognizing individual interest was neither my mother’s strong suit nor that of my cyberbullies. I was repeatedly denied participating in any kind of music outside of school programs (I recall multiple times requesting lessons for piano, cello, and to join the Indianapolis Children’s Choir). I have had others recognize my talents for music, but they did not involve teaching myself to use any instrument other than my voice with anything beyond the most rudimentary ability to find notes and chords, albeit not in rhythm. I seriously think I would have been better off in life in a multitude of ways if I had had them (studies show that music trains an immature brain to be better at math, for example), but my mother insisted that I wouldn’t practice on the grounds that I didn’t practice things that I did NOT enjoy, though the ulterior might have been to hide just how little money we actually had without my dad’s Lilly job. Frank stresses that being born into the right environment is one of the luckiest things that an individual can accomplish. Even so, Gates did not do most of the work that made him a success, Gary Kildall and Tim Patterson did, and it was abetted by the poor negotiating skills of Jack Sams compared to those of Gates’s business partner, Paul Allen (34-35). Over the next few pages, Frank discusses various unlikelihoods in his own road to success.
On page 114, Frank graphs the toil index, his own calculation of the monthly number of hours a median earner must work to rent a house in the median school district. He shows it as stable from 1950 to 1940 at a bit above 40 hours per month, or a little above one standard work week. That rose steadily between 1970 and 200, going up to about 70, then skyrocket to 100 by 2005. As with widely distributed graphs showing wages stagnating compared to increasing productivity (which Frank indirectly denies on page 162), this should show to reasonable people how hard work and talent very rarely leads to material success, and it’s due to the choice of people in power. They’re more content to spend tax money on wasteful arms races. Frank compares the arms race to elks growing longer antlers. It helps them attract mates and have more reproductive success, but the added weight leaves them more inclined to be eaten by wolves. It’s good for the species overall, but bad for the father elks, being more likely to meet a premature death, while male elks that live to a ripe old age are less likely to have reproductive success. The extent that antlers can grow is limited by how much elks can reasonably carry on their heads and be able to graze or actually compete for mates, just as the arms race is limited by making sure the country doesn’t starve. Self-limitations do not mean lack of wastefulness, and a full scaleback of weapons at equal rates makes sense, something we can do, while elks can’t (116-117). Similarly, most income gains have been going to top earners, but larger houses and larger weddings have not made the rich any happier, in fact show the opposite, but the larger houses at the top shape the demands of those below them, on down the income ladder, making things more difficult on the middle and lower classes (119-120). He notes that everything is on a curve, and the very wealthy in New York City have apartments half the size of mansions in places with more land area, even though they are still twenty times larger than an average person’s apartment (121).
“Dead weight of an intolerant tradition prevents anyone’s properly understanding the most enlightened intentions,” Frank cites from Italo Calvino’s Mr. Palomar (129). He spends the next chapter arguing that gratitude for one’s own luck adds trust to a teammate, which is just as important as being talented and hardworking.
Character assessment makes little sense in the models of human behavior favored by many economists. Those models assume that people are both rational and self-interested (in the narrow sense of the latter term). In this portrayal, Homo economicus would cheat only if he stood to benefit enough and if the odds of being caught were sufficiently low. So the mere fact he does not have a reputation for being a cheat tells us only that he’s been prudent. It doesn’t tell us that he would cheat when no one is looking. (129-130)
“Because chance events figure prominently along virtually every career trajectory, people who claim complete responsibility for their own success are almost surely claiming more credit than they actually deserve, and that is unlikely to make them more attractive to others” (132) When coming from Twitter trolls, it makes me personally downright hostile towards them. He notes that less educated people are less likely to acknowledge luck as an important factor in success (139), which seems to explain it. He also conducts a study in which a fictitious biography of a business man named Harold Johnson. People who got a different last paragraph in which he acknowledged his lucky breaks were more inclined to want to work, be neighbors, be friends with Harold Johnson than if the summation paragraph acknowledged only his abilities and hard work.
Again Frank brings in his own life’s dream of becoming a professional baseball player. He was on course, having been a bat boy for the Brooklyn Dodgers, then transferred to a different school district and was out of the pipeline to be on his school’s team. From studying economics, he learned the likelihood of being drafted by a professional team was slim, and even if he had, being a minor leaguer for ten years was the most likely outcome.
“Contrary to popular belief, private waste is not only far more pervasive than government waste, but also far easier to curtail.” If we raised taxes on the rich, “At least some useful public goods would be purchased with the additional revenue, after all, unless someone is prepared to argue that another tripling of the amounts spent on weddings would make people happier, virtually nothing of value would be sacrificed.” (144) Frank repeatedly mentions studies that more expensive weddings are more likely to result in divorce, and people with bigger mansions are not any happier. I would certainly be a lot happier if I could afford to live outside the shelter system, however.
Citing Robert Putnam’s Our Kids, children from low-income families with eighth grade math scores in the top quartile are less likely to earn a bachelor’s degree than children of high-income families with bottom-quartile math scores (145). (I do not know how my math scores were in this relativity; however, they were in the seventies, whereas my scores were in the upper nineties for all other subjects.) The skyrocketing cost of tuition keeps those from low income families from success, even when their scores show that they deserve it. Putnam argues that the American Dream of working hard and playing by the rules gets people ahead irrespective of family backgrounds has been shredded. Frank’s book shows us not only why but an easy way to correct the problem.