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Wednesday, April 13, 2016

Why Luck Matters More Than You Might Think

Robert Frank:

Why Luck Matters More Than You Might Think: ...chance plays a far larger role in life outcomes than most people realize. And yet,... Wealthy people overwhelmingly attribute their own success to hard work rather than to factors like luck or being in the right place at the right time.
That’s troubling, because a growing body of evidence suggests that seeing ourselves as self-made—rather than as talented, hardworking, and lucky—leads us to be less generous and public-spirited. It may even make the lucky less likely to support the conditions (such as high-quality public infrastructure and education) that made their own success possible. ...
The one dimension of personal luck that transcends all others is to have been born in a highly developed country. ... Being born in a favorable environment is an enormous stroke of luck. But maintaining such an environment requires high levels of public investment in everything from infrastructure to education—something Americans have lately been unwilling to support. Many factors have contributed to this reticence, but one in particular stands out: budget deficits resulting from a long-term decline in the United States’ top marginal tax rate. ...
A recent study by the political scientists Benjamin Page, Larry Bartels, and Jason Seawright found that the top 1 percent of U.S. wealth-holders are “extremely active politically” and are much more likely than the rest of the American public to resist taxation, regulation, and government spending. ... Surely it’s a short hop from overlooking luck’s role in success to feeling entitled to keep the lion’s share of your income—and to being reluctant to sustain the public investments that let you succeed in the first place.
And yet this state of affairs does not appear to be inevitable: Recent research suggests that being prompted to recognize luck can encourage generosity. ...

    Posted by on Wednesday, April 13, 2016 at 08:46 AM in Economics | Permalink  Comments (38)


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