Good luck or good management by Susan Grimsdell

I always find it strange that people who are incredibly lucky and end up with a disproportionate share of the nation’s total wealth, hardly ever attribute any part of their success to luck.  In fact, if you tell successful people they have been lucky it makes them angry and defensive. They believe their success is entirely the result of their own talent and hard work. 

Luck breeds success

However, there’s a body of research that shows the opposite, that there is a strict correlation between luck and success and in fact the luckier you are, the more successful you end up being, with almost no correlation with talent or hard work. 

For example, in NZ many people’s financial wealth has come from property.  As it happens, house prices have rocketed in recent years producing windfall untaxed profits for owners.  This wealth has absolutely nothing to do with the hard work or talent of the property owners.  It’s largely due to government policies, or lack thereof, including opening our borders to tens of thousands of immigrants. 

Bad luck brings hardship

In England a century or more ago, there was a class of incredibly wealthy landowners.  The oldest son of any of these rich noblemen (this is not sexist language – women and girls counted for nothing) inherited the vast estates and even if this son was a lazy no-hoper, he became wealthy nevertheless. 

Then along came inheritance taxes, and all those stately homes had to be sold or opened to the public, the sons had to get off their bums and go and earn a living, and the world changed forever.  The timing of the introduction of tax was, from the sons’ point of view, bad luck.  That contrasts with their fathers and grandfathers who not for a moment considered their wealth to be due to good luck.  Bad luck is a whole lot easier to acknowledge than good.

Sharing is key

If our culture recognised that luck is the most important factor in whether people end up poor or rich, and in particular if successful people understood that, research shows they are much more likely to want to contribute so that others can share in their fortune. 

But that’s not our culture, not at all.  The result is that the lucky ones have been accumulating a bigger and bigger share while those on the other end are falling still further behind.  And those on the winning side feel completely entitled, and get very angry at the thought that they should pay more tax, or give up any of their wealth in any way.

Elizabeth Warren, US Senator, spoke truth to power in 2012, reminding successful people that their goods went to market on roads the rest of us paid for, their workers were educated at taxpayer expense, and they were kept safe by police and firefighters paid for by the community.  They are not self-made in any sense of the term. 

Her words went viral and caused outrage. 

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